Principal Financial Group 2014 Annual Report Download - page 5

Strong growth of our fee-based businesses allows
us to generate increasing amounts of free cash flow,
which provides the opportunity to return greater
amounts of our net income to shareholders. We
increased our 2014 common stock dividend by
31 percent over 2013. In 2014, we continued to use our
free cash flow to fund acquisitions that further grow
the business. For example, in 2014, we announced
our intent to acquire AXA’s Mandatory Provident
Fund (MPF) and Occupational Retirement Schemes
Ordinance (ORSO) pension business in Hong Kong.
The deal includes a 15-year exclusive distribution
agreement to sell pension products through AXA’s
agency network of 4,400 agents in Hong Kong. This
bold strategic move will more than double the assets
under management of our Hong Kong pension busi-
ness to more than U.S. $6 billion, making us the fifth
largest MPF provider in that market.
Behind the numbers, we’re wired differently than
many companies:
• An integrated business model with diversified
revenue streams: One business or diversified
businesses? Tension always exists when it comes
to this question. We lean toward a mix of
businesses for these reasons:
— We can meet all of a client’s long-term financial
security needs across life stages—save, invest,
protect and manage income when it’s time to
reap the benefits. Our deep global investment
management expertise enables us to meet the
needs of retail investors and retirement investors
as well as the needs of large institutions like
central banks, sovereign wealth funds and large
pension funds.
— Diversification helps us manage through difficult
times—Economic volatility, regulatory changes,
Dan Houston
President and COO
Larry Zimpleman
Chairman and CEO
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