Principal Financial Group Inc · NASDAQ:PFG

Principal Financial — Investor Day (December 2008)

90 slides from Principal Financial's investor day presentation, Dec 10, 2008

  1. Slide 1: Principal Financial Group, Inc. Investor Conference

    Principal Financial Group, Inc. Investor Conference December 10, 2008

  2. Slide 2: Introduction

    Introduction Overview Growth Risk Management Outlook Senior Vice President & Investor Relations Officer Tom Graf

  3. Slide 3: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial Measures Anon-GAAP financial measure is a numerical measure of performance, financial position, or cash flows that includes adjustments from a comparable financial measure presented in accordance with U.S. GAAP. The company uses a number of non-GAAP financial measures that

  4. Slide 4: Forward Looking Statements

    Forward Looking Statements Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to sales targets, sales and eamings trends, and management's beliefs, expectations, goals and opinions. The comp

  5. Slide 5: Agenda

    Agenda 8:00 am Welcome Tom Graf 8:05 am Strategy, Execution and Results Larry Zimpleman 8:35 am U.S. Asset Accumulation Dan Houston/Tim Minard 8:55 am Global Asset Management Jim McCaughan 9:05 am Principal International Norman Sorensen 9:15 am Q&A PANEL 9:40 am BREAK 9:50 am Asset Management Overvi

  6. Slide 6: Larry Zimpleman, President & CEO

    Introduction Growth Risk Management Outlook Larry Zimpleman President & Chief Executive Officer

  7. Slide 7: Why Invest in The Principal?

    Why Invest in The Principal®? ° Competitive advantages and market leadership in high growth, high return businesses Strong Growth Profile ° Strong recurring deposits ° Proven ability to execute ¢ Substantial and increasing free cash flow re. Group

  8. Slide 8: Why Invest in The Principal? Disciplined Risk Management

    Overview Why Invest in The Principal®? ° Business and asset diversification * Strong financial strength ratings Disciplined Risk * Limited exposure to embedded guarantees in VA Management * No General Account securities lending program * Limited exposure to subprime residential mortgages and below i

  9. Slide 9: Overview — Long-term Strategy: Core Trends Remain Intact

    Overview — Long-term Strategy Core Trends Remain Intact... Retiring Baby Boomers Personal Responsibility Globalization of Retirement Systems Opportunities: >To meet demands of defined contribution participants To manage assets appropriate for retirement and other long- term investment strategies DTo

  10. Slide 10: Fueling Our Key Growth Engines

    Overview — Long-term Strategy ...Fueling Our Key Growth Engines Long-term operating earnings growth expectations NEI U.S. Accumulation Businesses** 11 to 14% Principal Global Investors 14 to 17% Principal International 14 to 17% PFG Overall 10 to 12% “Operating earnings compounded annual growth rate

  11. Slide 11: Diversified Business Model Provides Stability

    Overview — Long-term Strategy Diversified Business Model Provides Stability in Uncertain Times % of Operating Earnings 9 months ‘08* Latin America & Asia 13% Global Asset Mgmt 8% U.S. Guaranteed 15% U.S. Accumulation 37% “Excludes Corporate and Other segment

  12. Slide 12: Risk Businesses Deliver Earnings Diversification

    Overview — Long-term Strategy Risk Businesses Deliver Earnings Diversification and Continuing Growth Life and Health segment earnings up 23% YTD $220M Growth Opportunities: $179M — * * Increasing opportunities for non-qualified benefits Voluntary benefits * Consumer-driven healthcare 9 months ‘07 9

  13. Slide 13: Strong Results in the Face of Headwinds

    Overview — Current Environment Strong Results in the Face of Headwinds* Revenue $11.1 billion Sea operating revenues Strong Asset $121 billion Gathering: deposits*™ Strong Net $16.7 billion Strong Net si67 bitin Cash Flow: net cash flow** Some asset ree CU peers Reflects Principal Financial Group le

  14. Slide 14: And Above-Market Returns

    Overview — Current Environment ...And Above-Market Returns Q9months 9 months 07 08 Operating Earnings* ($M) $562 $1,053 $825 $764 E—EPs* $1.55 $3.93 $3.06 $2.92 Average S&P 1,148 1,443 1,472 1,316 Note: data in tables throughout presentation have generally been rounded. Calculations based on un- ee

  15. Slide 15: Effects of the Financial Crisis

    Overview — Current Environment Effects of the Financial Crisis ° Increased consumer need for savings and protection ¢ Re-pricing of risk * Higher cost of capital

  16. Slide 16: Dynamic Management

    |Overview — The Principal in Action| Dynamic Management Business portfolio management — Review of capital allocations to current businesses — Managing growth of capital intensive businesses Expense management Investment portfolio management — Vigilant monitoring and analysis — Maintain broad diversi

  17. Slide 17: Delivering Long-Term Shareholder Value

    |Overview — The Principal in Action| Delivering Long-Term Shareholder Value Continued Substantial and outstanding EPS increasing free growth cash flow P/E multiple ROE expansion improvement Financial Group

  18. Slide 18: Strong Growth Profile

    Introduction Overview Risk Management Outlook Strong Growth Profile Accumulation Dan Houston President, Retirement & Investor Services (RIS) Tim Minard Senior Vice President, RIS Distribution Global Asset Management Jim McCaughan Chief Executive Officer Principal Global Investors International Asset

  19. Slide 19: Dan Houston and Tim Minard

    Introduction Overview Growth - U.S. AA Risk Management Outlook Dan Houston Tim Minard President Senior Vice President U.S. Asset Accumulation

  20. Slide 20: Overview of Recent Performance — U.S. Asset Accumulation

    P Growth=US.AA | Overview of Recent Performance Financial Metrics Q9months 9 months 07 08 Operating Earnings ($M) $286 $488 $375* $305 Account values ($B) $85 $153 $154 $138 Sales** ($B) $10.1 $21.7 $16.1 $16.6 Netcnsh few = gs $86 $5.0 $6.6 $(B)* *3Q07 included $30 million benefit for refinement of

  21. Slide 21: Retirement Leader Delivers Complete Accumulation and Payout Solutions

    Growth - U.S. AA Retirement Leader Delivers Complete Accumulation and Payout Solutions Strong sales of 3 key retirement products — full service accumulation, mutual funds and individual annuities* Total Retirement Suite $22 2 bi l l i on plus expanding distribution drive 13% sales growth $19.6 billi

  22. Slide 22: Uniquely Qualified to Solve Client Needs

    Growth Uniquely Qualified to Solve Client Needs AA Organization Type Service Model Product Profit; Not-For-Profit; Bundled or Registered or Taft-Hartley Unbundled Unregistered Defined Contribution Defined Benefit Nonqualified I 401k) Traditional Leveraged Contribution Non- Defined 403(b) Cash Balanc

  23. Slide 23: Total Retirement Suite — Best in Class Solutions

    P crown =us.0a | Uniquely Qualified to Solve Client Needs Total Retirement Suite — Best in Class, Proprietary Solutions Defined Contribution (DC) Defined Benefit (DB) © $87 B in DC assets, including $4.4 B in ° DB services to 1,500 full service 403(b) assets? retirement clients? ESOP Non Qualified (

  24. Slide 24: Total Retirement Suite — A Winning Proposition

    Total Retirement Suite — A Winning Proposition For Plan Sponsors, For Employees, For Advisors For Plan Sponsors For Participants » Administrative ease Integrated communications and education to help achieve desired income replacement ratio ° —Streamlined data submission —Coordinated approach to inve

  25. Slide 25: A Winning Proposition for The Principal

    f crown Us. AA | A Winning Proposition for The Principal Total Retirement Suite Gets Results 9 months 08 2004 2005 2006 2007 Total Retirement Suite Sales ($B) As % of TotalSales 25% 34% 54% 59% 56% $1.3 $2.1 $3.9 $5.6 $3.5 Avg. ‘ Contract level lapses 2004-2007 9 months ‘08 Total Retirement Suite 4.

  26. Slide 26: Resources to Meet Client Needs

    [cronies aoa Uniquely Qualified to Solve Client Needs Resources to meet the needs of Plan Sponsors, their Employees and Financial Advisors “Worksite benefits counselors; education specialists, Total Retirement Suite, ESOP P ial and actuarial consultants; and retention and income management speci

  27. Slide 27: Alliance Management Group

    Growth - U.S. AA Alliance Management Group Access provided to almost 50,000 new intermediaries since 2001 % of FSA* Business 13% 33% 33% 35% 38% 27% 40% Sold More than 10 primary 30% of FSA : Alliance jeiationsties ‘Added business:sald ae — Expansion Expand our ii Management Directors of through int

  28. Slide 28: Product Breadth and Depth

    Product Breadth and Depth Multiple Products cfti smith barney P| Morgan Stanley = Foyer Gee ‘Shick Single Product VY Northwestern Mutual FINANCIAL NETWORK* SS Potential Opportunities Ameripprive Financial

  29. Slide 29: Strategy & Execution

    Strategy & Execution Alliance Management | Directors of Business Broad Wholesaler Group Development (DBD) Resources * Firm level resource * Advisor level resource * National coverage * Business and market 20 DBD covering U.S. ° Product specific plan development wholesalers * Educate advisor on ° Fos

  30. Slide 30: Alliance Management Drives Results

    Growth — U.S. AA Alliance Management Drives Results 2001 2007 CAGR = 9 months ‘08 $04B $3.8B 45% Alliance Sales Total Sales $33B $9.5B 19% re. Group

  31. Slide 31: Jim McCaughan

    Introduction Overview Growth - GAM Risk Management Outiook Jim McCaughan Chief Executive Officer — Principal Global Investors

  32. Slide 32: Overview of Recent Performance — Global Asset Management

    Overview of Recent Performance Financial Metrics 9months 9 months 07 08 $38 Operating Earnings ($M) $103 Feeearnings $28 $95 Spreadearnings $10 $8 Fee Revenues* $289 $537 Non-Affiliated Affiliated AUM ($B) Net cash flow $(B) PGI returned $100 million of capital to Corporate in 2007 and 2008 after fu

  33. Slide 33: Strong Net Cash Flow

    Growth - GAM Strong Net Cash Flow 2 g 6 Net cash flow in $1 o 2004 2005 2006 2007 YTD 2008 Annualized" lH Net cash flow —®=As % of BOY AUM *As of September 30, 2008 NCF as percent of beginning of year assets under management N

  34. Slide 34: Strong Net Cash Flow Softens Impact of Equity Market Declines

    Strong Net Cash Flow Softens Impact of Significant Equity Market Declines Net cash flow for 9 months ended Change in AUM from 9/30/08 as % of beginning of year 9/30/07 to 9/30/08 assets under management 0% TROW PGI 5% 10% + 15% -20% -25% -30% DATA SOURCE: Research of public releases from T. Rowe Pri

  35. Slide 35: Global Opportunities

    Growth - GAM Global Opportunities Pension Funds: * Manage assets for 12 of the top 25 U.S. pension funds* * Increasing success in UK/Europe ° DC is an increasing opportunity, in addition to DB — collective investment trusts Sovereign Wealth Funds/Central Banks: ° Expected to be our largest area of o

  36. Slide 36: Global Reach

    Global Reach Asset Management Locations @Singapore @Sydney @Tokyo Hong Kong “Beijing «Kuala Lumpur Mumbai © Des Moines © New York Stamford eLos Angeles eChicago Kansas City Seattle Portland LATIN AMERICA Mexico City a - “Monterrey Principal Global Investors Regional eSantiage Headquarters <Sao Paulo

  37. Slide 37: Global Distribution

    Growth - GAM Global Distribution ° Global distribution model: — Clients in 55 countries — Distribution teams focused on U.S., Europe, Japan, Australia, Asia ex-Japan and Latin America ¢ Well resourced distribution team: — 75 sales, relationship management & client service staff ° Strong track record

  38. Slide 38: Diverse, High Value Added Capabilities

    Growth —- GAM Diverse, High Value Added Capabilities Principal Global Investors Assets Under Management by Asset Class (U.S. billions) As of September 30, 2008 Other $1.9 Equities: * Global & World ex-U.S. + United States Fixed Income: + Specialty Credit * Core/Core Plus * Structured Real Estate: »

  39. Slide 39: Top Tier Investment Expertise

    Growth - GAM Top Tier Investment Expertise Principal Global Investors Retirement Plan Separate Accounts Third Party AUM Managed by Principal Global Investors in Top Two Morningstar Performance Quartiles (as of 9/30/08) $87.4B $82.98 1yr 40% $59.2B 3yr 63% a 3B Syr 75% = © b © S 3 Ss s g g R g Financ

  40. Slide 40: YTD Sales

    Growth - GAM YTD Sales* ¢ $6.4 billion in non affiliated sales YTD, diversified across regions, client types and strategies, including: — $500M global equities for an Asian sovereign wealth fund — $325M high yield for a U.S. insurance company — $1.2B international/global equities for a U.S. manager

  41. Slide 41: Norman Sorensen

    Introduction Overview Norman Sorensen Chief Executive Officer — Principal International Risk Management Outlook

  42. Slide 42: Overview of Recent Performance — Principal International

    P crown tama] Overview of Recent Performance Financial Metrics Q9months 9 months 07 08 Operating $44.8 $110.7 $85.3 $107.9 Earnings ($M) AUM ($B) $10.2 $28.7 $26.9 $28.6 ROE™ 5.4% 10.7% 9.9% 11.7% Net cash flow $(B) $1.5 $2.1 $2.3 $0.7 °2008 normalized operating earnings growth in the range of 15-20

  43. Slide 43: Capitalizing on Emerging Global Growth

    Capitalizing on Emerging Global Growth in Asset Management and Accumulation ° Retirement-centric — Focused on the most attractive defined contribution pension and Business strategy retirement countries over the next generation ° Long-term mutual funds ° Large emerging markets — global shifts in popu

  44. Slide 44: We are in the Right Markets: Growing Middle Class

    We are in the Right Markets: Growing Middle Class Largest middle class populations in 2025 * Mexico umm 43 (taly mm 45 France sume 50 UK sm 54 Russia mmm 64 Germany mmm 64 Brazil mmm 74 Jap@) oo 402 {n¢i2 74. USA TS 30 CO, TT 3° (Pop. in millions) * China, India, Brazil, Mexico to be among 11 larges

  45. Slide 45: The Right Approach

    The Right Approach Leverage Principal Financial Projected CAGR of Global Asset Group expertise in: Management Industry - ; ; 2007-2012E — Bundled Pension Solutions 7o% 24% 25% 23% 20% — Asset Management y 19% : : | 18% 7% — Enterprise Risk 14% 11% 13% Management a% 8% Leverage strong local i managem

  46. Slide 46: Leveraging Strong Local Partners

    Leveraging Strong Local Partners Distribution Joint Ventures Partner’s Industry Faith * Ranking Distribution Reach Country Partner 4,000 branches; 1.8 million Brazil Barica ido Rargest bankcinsLatin business accounts; 27 million Brasil America ae individual customers China 3" largest 13,400 branches

  47. Slide 47: Brasilprev

    Brasilprev Banco do Brasil Deposit Growth of Private Pension Plans* ° #1 in Latin America by assets, Change YTD Aug ‘07 vs. YTD Aug ‘08 deposits, and customers 28.6% (29 million) * Largest footprint (11,360 points 21.3% of contact; 4,000 branches; 18.1% 84,300 employees) ze Brasilprev 10.8% 8% * 17.

  48. Slide 48: CCB Principal Asset Management

    CCB Principal Asset Management China Construction Bank (CCB) — 13,400 branches — personal financial centers up 112% to 1,570 in 2008 China Mutual Fund AUM ’ — Financial Advisory Service — grew 165% in 2008 500 CCB Principal Asset Management ¢ 400 — CAGR for AUM of 71% E *AUM as of 9/30/08: $4.0 B (6

  49. Slide 49: Summary

    Summary Focused on the retirement and savings needs of growing middle classes in large Asian and Latin American emerging markets Major regulatory pension reform shift toward employer-based defined contribution retirement systems Strong local joint venture distribution partnerships complement establi

  50. Slide 50: Q&A Panel

    Principal Financial Group, Inc. Investor Conference Q&A Panel December 10, 2008 i Financial Group

  51. Slide 51: Break

    Principal Financial Group, Inc. Investor Conference 10 min. Break December 10, 2008

  52. Slide 52: Disciplined Risk Management

    Introduction Overview Growth Risk Management Outlook Disciplined Risk Management Risk ReTuRN Investment Portfolio Management Asset Management Overview Jim McCaughan Chief Executive Officer Principal Global Investors Julia Lawler Chief Investment Officer Capital, Liquidity & Risk Management Terry Lil

  53. Slide 53: Jim McCaughan

    Introduction Outlook Jim McCaughan Chief Executive Officer — Principal Global Investors

  54. Slide 54: Asset Management Overview

    Asset Management Overview ° How Principal Global Investors serves clients ° Market commentary * Team approach to managing General Account re. Group

  55. Slide 55: How Principal Global Investors Serves Clients

    Risk Management — Overview How Principal Global Investors Serves Clients Trusted advisor providing flexible and tailored servicing models Focus on retirement plans and other institutional investors World-class expertise across diverse investment capabilities Disciplined investment strategies, deep a

  56. Slide 56: Market Commentary

    Market Commentary Global credit crisis/liquidity crunch Disconnect between fundamentals and technicals Growing concern around stability of economy, including deflationary fears Governments increasing money supply/pumping liquidity into system Some thawing of short-term lending markets, some improvem

  57. Slide 57: Current State of Commercial Mortgage Market

    Current State of Commercial Mortgage Market Commercial Banks — Selective, relationship based — Terms up to 5 years: high origination fees — Mostly 65% LTV + recourse — Limited access for hotels, retail — Preference for deals up to $20 million: regional banks Life Companies — Limited as companies con

  58. Slide 58: Option Adjusted Spreads — CMBS Spreads

    Option Adjusted Spreads CMBS Spreads 4000 3500 —Investment Grade CMBS —CMBS Investment Grade: Aaa 3000 —CMBS Investment Grade: A —CMBS Investment Grade: Bbb £2500 é $2000 1500 SEEESESESEP PELE LESS “...spreads have been pushed to levels that are completely disconnected from fundamentals, realistic d

  59. Slide 59: CMBS vs. ABS Subprime

    CMBS vs. ABS Subprime Option Adjusted Spreads vs Delinquencies January 2007 — September 2008 1200 — Investment Grade CMBS Spread a peg ABS Subprime Spread saat 00," * *CMBS Delinquencies a = © = ABS Subprime Delinquencies am 600 Option Adjusted Spreads Basis Points ab 3 8 ee ee eee ee 200 c . r 25%

  60. Slide 60: Valuation and Trading in the CMBS Market

    ° Valuation and Trading in the CMBS Market Limited cash transactions — forced sellers and few buyers CMBxX quite liquid for momentum trades “Inactive market” — so how to determine fair value? Very low delinquency rates even after recently publicized defaults Market spreads reflect lack of liquidity

  61. Slide 61: Corporate Credit Spreads

    Corporate Credit Spreads ° What drives them? — Risk of default — Liquidity premium e From the early stages of a recession — Expect higher default rates in below investment grade ° But liquidity preferences and deleveraging have been key drivers of spread Financial Group

  62. Slide 62: U.S. Corporate Credit Spreads

    U.S. Corporate Credit Spreads 2000 a 8 Option Adjusted Spreads Basis Points a 3 8 8 re ee ee —US. Corporate Investment Grade —U.S. Corporate High Yield ° te “by, re. Group SOURCE: LehmanLive.com as of November 28, 2008.

  63. Slide 63: Moody's Global Issuer Default Rate

    Risk Management — Overview Moody’s Global Issuer Default Rate 2 10 Issuer - Weighted Rate, % at at ee Dd § 2 Pd 6 & SL HS So 9 $ PPP Pre Be Be oh AP er co wr or ee ot oP ew? — high Yield —— Investment Grade —— Combined (Issuer Weighted) SOURCE: Moody's Investors Service through October, 2008.

  64. Slide 64: Team Approach to Managing General Account

    Risk Management — Overview Team Approach to Managing General Account Investment strategy developed by Chief Investment Officer and approved by Investment Committee Investments managed by portfolio managers in Principal Global Investors — Extensive research Quality, diversification, exposure limits F

  65. Slide 65: Julia Lawler

    Introduction Overview Growth RiSK Julia Lawler Chief Investment Officer RetuRN Outlook

  66. Slide 66: Investment Philosophy and Strategy

    Investment Philosophy and Strategy _. 1. Maintain Quality, Well Maximize after-tax Diversified Portfolio Pee and | 2. Active Asset/Liability with acceptable risk Management and Strategy PUES | 2 optimize Risk Adjusted Yields and Returns Financial Group

  67. Slide 67: Corporate Fixed Maturity Portfolio — Financial Sector Exposure

    Risk Management — Investments Corporate Fixed Maturity Portfolio Financial Sector Exposure by Barclays Classification as of September 30, 2008 (in millions) Amortized Carrying % of Total Cost Amount Corporate Bonds* Total Banks $4,239.7 $3,479.4 12% Non U.S. Banks 2,642.0 2,170.6 71% Large U.S. Bank

  68. Slide 68: Corporate Fixed Maturity Portfolio — Next Largest Sectors

    Risk Management — Investments, Corporate Fixed Maturity Portfolio Next Largest Sectors by Barclays Classification as of September 30, 2008 (in millions) Utilities $3,827.1 $3,706.5 12% Consumer Non-Cyclical 3,120.7 3,001.4 10% Communications 2999.5 2 838.3 10% Total Sectors $9,947.3 $9,546.2 32% *Fo

  69. Slide 69: Limited Exposure to Sectors at Greater Risk During a Recession

    Risk Management — Investments Corporate Fixed Maturity Portfolio Limited Exposure to Sectors at Greater Risk During a Recession by Barclays Classification as of September 30, 2008 (in millions) Amortized Carrying Amount % of Total Cost Corporate Bonds* Building Materials $826.8 $787.9 3% Automotive

  70. Slide 70: Corporate Bond Portfolio — Applying S&P Historical Worst Defaults

    Corporate Bond Portfolio Applying S&P Historical Worst Defaults Welsee 3 year Cumulative Default Rating Category* consecutive years Rate** for defaults** AAA 1992-1994 0.57% AA 1985-1987 0.30% A 2000-2002 0.85% BBB 2001-2003 3.63% BB 2000-2002 11.84% *No meaningful exposure to B and CCC. - “Based on

  71. Slide 71: CMBS by Rating & Vintage

    Risk Management — Investments U.S. Invested Assets CMBS by Rating & Vintage including typical subordination Exposures as of September 30, 2008 (in millions) ; - Total Vintage AAA % Bp and % Amortized I ees Cost $81.5 4% $1,941.4 $203.1 10% 116.4 19% a Total | $3,648.4 63 $670.9 12% $81.5 1% $5,774.3

  72. Slide 72: Stress Scenarios — CMBS and CMBS CDO Portfolio

    Risk Management — Investments Stress Scenarios CMBS and CMBS CDO Portfolio (Cumulative losses, in millions, after-tax) Fitch moderate 2006 & later vintages Fitch severe 2006 & later vintages PFG moderate 2005 & before vintages 2006 & later vintages $2 $5 $80 PFG severe 2005 & before vintages 3.0% $0

  73. Slide 73: CMBS Loan and Bond Rollover Exposure in 2009

    CMBS Loan and Bond Rollover Exposure in 2009 ° $4.0B or 68% of our CMBS bonds have no exposure to loans maturing in 2009 ° $1.5B or 32% of our CMBS bonds have some exposure to loans maturing in 2009 — These bonds have a weighted average subordination of 31% (average rating of AAA) — $400M of these b

  74. Slide 74: Commercial Mortgage Portfolio

    "Risk Management — investments Commercial Mortgage Portfolio as of November 30, 2008 Portfolio Size (Amortized cost): $10.4 Billion* Current Loan-to-value: 62% Current Debt Service Coverage: 1.8x Current Occupancy: 89% Loans under Breakeven Debt $117 Million Service Coverage: (22 different loans w/a

  75. Slide 75: Commercial Mortgage Loans Maturing Over Next Years

    Commercial Mortgage Loans Maturing Over Next 5 Years Loan Balance ($B) $1.14 $1.34 $1.19 $1.26 $1.35 Current Current Debt Occupancy Service Coverage 59% 89% 2.1x Current LTV 2009 Loan Detail 2009 loans by property type 2009 loans by region i <a = Industrial = Apartments = Office * Retail ae Paes = W

  76. Slide 76: Summary

    Summary Unrealized loss positions driven by extreme fear and illiquidity Strong asseti/liability management supports ability and intent to hold until maturity Applying stressed scenarios, potential losses manageable given capital base and capital management levers Continue proactive monitoring of po

  77. Slide 77: Q&A Panel

    Principal Financial Group, Inc. Investor Conference Q&A Panel December 10, 2008 Principal, Financial Group

  78. Slide 78: Break

    Principal Financial Group, Inc. Investor Conference 10 min. Break December 10, 2008

  79. Slide 79: Terry Lillis, Chief Financial Officer

    Introduction Overview Growth Risk Management — Capital Mgmt Terry Lillis Chief Financial Officer Outlook

  80. Slide 80: Capital and Liquidity Management

    Risk Management — Capital Mgmt Capital and Liquidity Management ° Disciplined capital and liquidity management e Insurer financial strength ratings affirmed e Increasing shareholder value — Substantial and increasing “free capital” over long-term from strong earnings growth and changing business mix

  81. Slide 81: Disciplined Capital and Liquidity Management

  82. Slide 82: Liquidity Management

  83. Slide 83: Capital and Liquidity Management in Action

  84. Slide 84: Reducing the Investment Only Block

  85. Slide 85: Aligning Expenses

  86. Slide 86: Ratings Affirmed, Outlook Stable

  87. Slide 87: Larry Zimpleman, President & Chief Executive Officer

  88. Slide 88: Why Invest in The Principal?

  89. Slide 89: Q&A Panel

  90. Slide 90: Non-GAAP Financial Measures

Principal Financial Group — Investor Day (December 2008) on 6ix