Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Investor Day (December 2010)
142 slides from Principal Financial's investor day presentation, Dec 9, 2010
Slide 1: Investor Day | December 9, 2010
Exhibit 99 THE PRINCIPAL FINANCIAL GROUP® INVESTOR DAY | DECEMBER 9, 2010 THINK AGAIN. Financial j Group
Slide 2: Introduction
INTRODUCTION JOHN EGAN Vice President Investor Relations
Slide 3: Use of Non-GAAP Financial Measures
USE OF NON-GAAP FINANCIAL MEASURES A non-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 tha
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 earnings trends, and management's beliefs, expectations, goals and opinions. The com
Slide 5: Agenda
AGENDA Time Topic Presenter 12:00 pm Welcome John Egan 12:05 pm Strategy Overview Larry Zimpleman 12:25 pm Retirement & Investor Services Dan Houston U.S. Insurance Solutions Q&A with Houston 1:05 pm Principal Global Investors Jim McCaughan Q&A with McCaughan 1:40 pm Principal International Norman S
Slide 6: Company Overview
COMPANY OVERVIEW SIMPLIFIED REPORTING STRUCTURE Full Service Accumulation [FSA [— Principal Funds [— Individual Annuities Bank & Trust Services |__ Full Service Payout (FSP) — Investment Only (10) Individual Life Insurance [__ Specialty Benefits Insurance [SBD] *Announced exit of business 09/30/10 F
Slide 7: PFG Opportunity Video
PFG Opportunity Video ¢ Compilation of bullet points from other slides within slide show re. Group
Slide 8: Strategy Overview
STRATEGY OVERVIEW LARRY ZIMPLEMAN Chairman, President & CEO re. Group
Slide 9: Strategy Overview: Opportunity
STRATEGY OVERVIEW OPPORTUNITY CORE TRENDS REMAIN EMPLOYER-BASED BENEFITS UNDER PRESSURE BOOMERS AT RETIREMENT PRIVATIZATION OF GLOBAL ECHOs AT RETIREMENT PEAK SAVINGS. SYSTEMS Financial Group
Slide 10: Strategy Overview
STRATEGY OVERVIEW The Principal® helps growing businesses, individuals and institutional clients in select markets worldwide achieve financial security and success. U.S. EMPLOYEE BENEFITS FOR GROWING BUSINESSES GLOBAL ASSET MANAGEMENT Build on The Principal Capitalize on the Build upon our globat Ex
Slide 11: U.S. Employee Benefits for Growing Businesses
STRATEGY OVERVIEW PILLAR OF GROWTH U.S. EMPLOYEE BENEFITS FOR GROWING BUSINESSES Build on The Principal leadership, expertise and track record to meet the retirement and employee benefit needs of growing businesses and their employees. r. 11 Group
Slide 12: Pillar of Growth: U.S. Employee Benefits
STRATEGY OVERVIEW PILLAR OF GROWTH oo ee Build on The Principal teadership, expertise and track record to meet the retirement and employee benefit needs of growing businesses and their employees. 6.16 million Total U.S. Businesses <0.2% Large Businesses 2/3 of job 6.15 million growth comes SMBs from
Slide 13: Pillar of Growth: Strategy and Track Record
STRATEGY OVERVIEW PILLAR OF GROWTH STRATEGY TRACK RECORD - Local sales and services - 70 years SMB experience — Unique products and — Nearly 90,000 clients solutions — More than 150,000 advisors — Principal Total Retirement Suite™ - eBenefits Edge re. Ag Group
Slide 14: U.S. Financial Services for Executives, Employees and Individuals
STRATEGY OVERVIEW PILLAR OF GROWTH U.S. FINANCIAL SERVICES FOR EXECUTIVES, EMPLOYEES AND INDIVIDUALS Pe Financial 14 =
Slide 15: Biggest Fear: Outliving Our Savings
STRATEGY OVERVIEW LAR OF GROV Capitalize on the unprecedented demand for financial services - retirement, savings and protection solutions - among Baby and Echo Boomers at and beyond the workplace. Biggest Fear: Outliving Our Savings 85, Female life expectancy — Female retirement age We're living 80
Slide 16: Pillar of Growth: Strategy and Track Record
STRATEGY OVERVIEW PILLAR OF GROWTH STRATEGY TRACK RECORD — Focus on worksite — More than 50% of retirement solutions and asset assets retained retention — 19 million individual customers — Full suite of products - hire through retire — Advisor-focused model il Group
Slide 17: Global Asset Management
STRATEGY OVERVIEW GLOBAL ASSET MANAGEMENT a 7 Fz
Slide 18: Global AUM Growth
18 STRATEGY OVERVIEW. sa 10% ANNUAL RATE 2009 2012 Global AUM in $ trillions Source: “Capturing the Next Wave of Concentrated Growth”; 2010 McKinsey/US Institute Asset Management Economic Benchmarking Survey Results (June 2010} (AUM represents professionally managed long-only assets) ; Institutional
Slide 19: Global Asset Management Strategy and Track Record
STRATEGY OVERVIEW Build upon our globat research and distribution platform to grow our proven, global, multi-boutique asset ‘management model for institutional markets and clients of the Principal Financial Group. STRATEGY TRACK RECORD — Multi-boutique strategy - ivan and affiliated — Extensive glob
Slide 20: Global Funds & Retirement
STRATEGY OVERVIEW PILLAR OF GROWTH GLOBAL FUNDS & RETIREMENT Pm Financial 20 aoe
Slide 21: Global Funds & Retirement: Retirement Savings Need
STRATEGY OVERVIEW OF GRO GLOBAL FUNDS & RETIREMENT Extend our retirement and long-term asset accumulation expertise in key emerging markets with fast ‘growing middle classes and retirement assets. only 1in5 are saving INDIA CHINA 1.2 billion 1.3 billion GLOBAL TREMENDOUS POPULATION SS RETIREMENT EXP
Slide 22: Pillar of Growth: Strategy and Track Record
STRATEGY OVERVIEW PILLAR OF GROWTH STRATEGY TRACK RECORD - Export retirement andasset | ~ Strong foothold in key management to key emerging markets — more emerging markets then IG years M loeal part — High demand for our ~ Marquee local partners retirement and savings — Organic growth & expertise ac
Slide 23: Purposeful Diversification
STRATEGY OVERVIEW GROWTH DRIVER OUR STRATEGY Purposeful diversification d ri: e HIGH HIGH HIGH FREE GROWTH ROE CASH FLOW Financial 23 Group
Slide 24: Purposeful Diversification: Operating Earnings
STRATEGY OVERVIEW PURPOSEFUL DIVERSIFICATION 9/30/10 TTM Operating Earnings $953.6M** U.S. Insurance Solution: oS Suarantecd 2%, PGI 6% 2001 Operating Earnings $467.6M* U.S. Insurance tutions 27% eee a PGI 5% Accumulation >t ) 49% PI 1% : RIS Accumulation \42% of 36% OE 2001 9/30/10 TTM ling Twelve
Slide 25: More Valuable Than Sum of the Parts
STRATEGY OVERVIEW GROWTH DRIVER MORE VALUABLE THAN SUM OF THE PARTS HIGHER MARGINS HIGHER MULTIPLES PRINCIPAL INTERNATIONAL, yr. Group 25
Slide 26: Strong Capital Position
STRONG CAPITAL POSITION PROVIDES FLEXIBILITY Financial flexibility Disciplined capital deployment Free cash flow increasing e Enterprise-wide risk management re. 26 Group
Slide 27: Share Price Does Not Reflect Value Built Since IPO
STRATEGY OVERVIEW SHARE PRICE DOES NOT REFLECT VALUE BUILT SINCE IPO 12/31/01 9/30/10 Customers [M) 13.0 19.1 Operating Earnings ($M) $452 $835* AUM ($B) $98 $306 Annual dividend to $0.25 $0.55 common stockholders Share price $24.00 $25.92 al 27 “Ater-tax Treling Twelve Months Group
Slide 28: Think Again: Execution of Our Strategies
STRATEGY OVERVIEW THINK AGAIN OPPORTUNITIES 7" EXECUTION OF OUR STRATEGIES = GROWTH
Slide 29: Retirement & Investor Services | U.S. Insurance Solutions
RETIREMENT & INVESTOR SERVICES U.S. INSURANCE SOLUTIONS DAN HOUSTON President U.S. Insurance Solutions Retirement & Investor Services;
Slide 30: The Principal Helps Growing Businesses, Individuals and Institutions
The Principal helps growing businesses, individuals and institutional clients in select markets worldwide to achieve financial security and success. U.S. FINANCIAL SERVICES GLOBAL ASSET FOR EXECUTIVES, MANAGEMENT EMPLOYEES AND INDIVIDUALS Build upon our global Build on The Principal Capitalize on th
Slide 31: Grow Share of Large Underpenetrated SMB Market
TIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROW SHARE OF LARGE UNDERPENETRATED SMB MARKET 95.0% 84.6% 73.3% 35.9% 23.2% 3.4% = <10 10-99 100-499 500-999 1000-4999 5000+ NUMBER OF EMPLOYEES Percentage of companies with a 401(k) plan 31 Sources: Retirement Research Inc, 2009; LIMRA “A Sub
Slide 32: Meet Growing Individual Demand for Financial Services
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS OPPORTUNITY MEET GROWING INDIVIDUAL DEMAND FOR FINANCIAL SERVICES e200+ million in U.S. with broad investment and protection needs” °80 million Baby Boomers followed by 80 million Echo Boomers ¢30 million pre-retirees with $2.6 trillion in re
Slide 33: Employee Benefits to Attract and Retain Employees
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER EMPLOYEE BENEFITS TO ATTRACT AND RETAIN EMPLOYEES RETIREMENT & INVESTOR SERVICES U.S. INSURANCE SOLUTIONS Accumulation businesses Specialty Benefits Full Service Accumulation (FSA) ¢ Group dental and vision insurance - Defined C
Slide 34: Delivering Individual Solutions
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER DELIVERING INDIVIDUAL SOLUTIONS - INVESTMENTS, RETIREMENT INCOME & PROTECTION RETIREMENT & INVESTOR SERVICES U.S. INSURANCE SOLUTIONS « Principal Funds Individual Life - Asset allocation * Solutions include business FRSA GREETS
Slide 35: Differentiate Through Product, Distribution and Focus
35 DIFFERENTIATE THROUGH PRODUCT, DISTRIBUTION AND FOCUS ON GROWING BUSINESSES Product peccceat En novetion Breadth of p Leader: r. Group
Slide 36: Product Leadership: Principal Total Retirement Suites
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER PRODUCT LEADERSHIP: PRINCIPAL TOTAL RETIREMENT SUITES BUILD UPON LEADERHIP, BEST-IN-CLASS PROPRIETARY SOLUTIONS + #1 in fully bundled 401[k]! #1 in fully bundled TRO plans® * #1 provider of ESOP plans? —* #2 in new TRO clients i
Slide 37: Platform Strength
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER PLATFORM STRENGTH FINANCIAL ADVISOR/BROKER PLAN SPONSOR SOLUTIONS INDIVIDUAL INVESTOR SOLUTIONS (PRINCIPAL TOTAL RETIREMENT SUITE”) (PRINCIPAL RETIREMENT INCOME EDGE”) GUIDANCE PLAN SPONSOR EDUCATION, GUIDANCE, AND PRE-RETIREE A
Slide 38: Unique Approach to Income Solutions
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER UNIQUE APPROACH TO INCOME SOLUTIONS FINANCIAL ADVISOR/BROKER INDIVIDUAL INVESTOR SOLUTIONS {PRINCIPAL RETIREMENT INCOME EDGE”) GUIDANCE ‘AND PRE-RETIREE AND RETIREE EDUCATION, EDUCATION GUIDANCE AND TOOLS PRoDUCT SOLUTION
Slide 39: Product Innovation: Asset Allocation Leadership
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER PRODUCT INNOVATION: ASSET ALLOCATION LEADERSHIP WILL DRIVE FLOWS Asset allocation leadership Sti Asset Allocatit +#5 largest manager of lifecycle funds* r iertormances? More options for advisors and their clients 100% above medi
Slide 40: Product Innovation: New Solutions Increase AUM
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER PRODUCT INNOVATION: NEW SOLUTIONS INCREASE AUM PFI Global Diversified Income Fund (PGDIX) + Solving for a need...high income while managing risk - Diversification - High cash generation/yield alpha - Exposure to fundamental grow
Slide 41: Specialty Benefits Leadership
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER SPECIALTY BENEFITS LEADERSHIP: DRIVES ABOVE MARKET GROWTH SMB-focused solutions Speciatt Indust pancrel ” 4 pecialty Industry | Jyieys\ a Heh anes dentalneswotse Benefit 5 Year 5 Year Industry » eBenefitsitdge Product CAGR Rank*
Slide 42: Individual Life Leadership
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER INDIVIDUAL LIFE LEADERSHIP: FOCUS ON THE BUSINESS MARKET SOLUTIONS FOR BUSINESS, BUSINESS OWNERS AND KEY EXECUTIVES Business owners’ financial challenges «Exiting the business «Business transition * Retaining key employees Indiv
Slide 43: SMB Leadership: Deep Market Penetration
RETIREMENT & INVESTOR SERVI INSURANCE SOLUTIONS GROWTH DRIVER SMB LEADERSHIP DEEP MARKET PENETRATION 16 % OF TOTAL EMPLOYERS SERVED BY THE PRINCIPAL. 20-49 50-99 100-249 250-499 500-999 1000+ EMPLOYER SIZE BY NUMBER OF EMPLOYEES Pl 43 Data as of 9/30/2010
Slide 44: Leverage Independent Distribution Through Local Network
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER LEVERAGE INDEPENDENT DISTRIBUTION THROUGH UNPARALLELED LOCAL NETWORK MEETING THE NEEDS OF BUSINESS OWNERS, THEIR EMPLOYEES AND FINANCIAL ADVISORS Retirement readiness focus — Auto Enroll/Auto Escalate SALES 355 * Point of sale e
Slide 45: Build Third Party Distribution
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER BUILD THIRD PARTY DISTRIBUTION Representative list: n 2001 to 2003 Raymond James NFP 15 ¢Morgan Stanley 2004 to 2006 10 °UBS *Bank of America *NRP. 5 *Smith Barney 2007 to 2009 0 eLPL ‘01 ‘03 ‘05 ‘07 ‘09 ©Merrill Lynch «Ameripri
Slide 46: Multi-Product Strategy: More Ways to Win
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS GROWTH DRIVER MULTI-PRODUCT STRATEGY = MORE WAYS TO WIN Alliance Partners Alliance Partners THEN Now 9/30/10 AUM Regional Broker-Dealer (2001) FSA, Retail Funds, @Full Service Accumulation Annuities, Life - NODC $1.58 Insurance Producer (2002
Slide 47: Text of Morgan Stanley Smith Barney Testimonial Video
Text of Morgan Stanley Smith Barney Testimonial Video e Hil’m Ed O’Connor. And | run the retirement group at Morgan Stanley Smith Barney. // When we think about The Principal we think of them as a true partner. Other firms who are providers are in the retirement business mainly to find a means to ga
Slide 48: Alliance Sales Traction Across Products
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD ALLIANCE SALES TRACTION ACROSS PRODUCTS 2001 2003 2005 2007 2009 2010E 2013E # of Alliances ON RD MAlliances with $100-$249M in sales Il Alliances with $250-$499M in sales MAlliances with $500-999M in sales fi Alliances with $1B+
Slide 49: Increase Traction with Third Party Administrators
49 RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD INCREASE TRACTION WITH THIRD PARTY ADMINISTRATORS (TPA) 600 68% INCREASE 400 IN ASSETS SOLD OR RETAINED 200 INTO AN UNBUNDLED 0 SOLUTION 3009YTD 3Q10YTD Assets in $Millions |_| TPA Sales oO Retained into Unbundled
Slide 50: Multiple Channels Drive Strong Fund Sales Growth
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD MULTIPLE CHANNELS DRIVE STRONG FUND SALES GROWTH* Improving brand recognition Leveraging retirement leadership and 6 asset allocation expertise into retail funds space 4 National channel 3-year CAGR 2 an of 19% from '07-"10E 0 Ad
Slide 51: FSA: Industry Leading Profit Margins and Growth
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD FULL SERVICE ACCUMULATION (FSA) INDUSTRY LEADING PROFIT MARGINS AND GROWTH* TOP DECILE PROFIT MARGIN OUTPACING DEFINED CONTRIBUTION INDUSTRY GROWTH IN ASSETS, Profit Margin PARTICIPANTS AND PROFIT Industry Avg vs. The Principal C
Slide 52: Maintaining FSA Margins
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD FULL SERVICE ACCUMULATION (FSA) MAINTAINING FSA MARGINS 1.40% 1.22% 1.24% 1.20% 1.06% 1.05% 1.02% 1.00% 0.84% 0.83% 0.75% 0.80% wie 0.65% 0.60% 9 0.37% 0.20% 0.00% + 2006 2007 2008 2009 Annualized 2010+ —@ Net Revenue / AV* <M Op
Slide 53: FSA Net Cash Flow
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS TRACK RECORD FSA NET CASH FLOW STRONG HISTORY, RECENT CASH FLOWS UNDER PRESSURE 100 + $21.6 billion in FSA NCF from 2004 to 2008 - averaging 5.5% of beginning of year account value (BOY AV) - ranging 4.8-6.8% over same period But 2009 NCF was
Slide 54: FSA Net Cash Flow: Plan Levers Will Drive Rebound
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS LOOKING AHEAD FSA NET CASH FLOW [NCF] PLAN LEVERS WILL DRIVE REBOUND IN FLOWS LONG-TERM TARGET OF 4-6% UNCHANGED, NEAR-TERM PRESSURES REMAIN ACTIONS TO INFLUENCE FLOWS Recurring deposits elncrease participation and deferral rates through: -“A
Slide 55: 5-Year Vision: RIS
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS LOOKING AHEAD 5-YEAR VISION: RIS STRATEGIC MILESTONES To be a leader in meeting the retirement, savings and income management needs of growing businesses, their employees and other individuals. 55 — -FSAnet cash flow as a percent of beginning
Slide 56: 5-Year Vision: U.S. Insurance Solutions
RETIREMENT & INVESTOR SERVICES | U.S. INSURANCE SOLUTIONS LOOKING AHEAD 5-YEAR VISION: U.S. INSURANCE SOLUTIONS STRATEGIC MILESTONES To be a leader in helping businesses and individuals protect against the risks that can derail financial security.
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Slide 58: Principal Global Investors
PRINCIPAL GLOBAL INVESTORS JIM McCAUGHAN President Principal Global Investors
Slide 59: The Pillars of Growth
PRINCIPAL GLOBAL INVESTORS. THE 4 PILLARS OF GROWTH The Principal helps growing businesses, individuals and institutional clients in select markets worldwide achieve financial security and success. U.S. EMPLOYEE BENEFITS U.S. FINANCIAL SERVICES GLOBAL ASSET GLOBAL FUNDS & FOR GROWING FOR EXECUTIVES,
Slide 60: Compelling Opportunities for Global Asset Managers
COMPELLING OPPORTUNITIES FOR GLOBAL ASSET MANAGERS e Asset management industry global AUM of $51 trillion by 2012° e Fastest growth rates in emerging markets ° Sovereign wealth funds reach $5 trillion in AUM by 2013 e U.S. defined contribution (DC) plan assets grow at least 35% to $5.6 trillion by 2
Slide 61: Strategy Overview
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER STRATEGY OVERVIEW e Deliver competitive investment performance e Bea manager suitable for retirement assets e Serve all business of The Principal with suitable investment capabilities e Grow non-affiliated institutional assets under management e Continue to e
Slide 62: Where We Stand
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER WHERE WE STAND © $215.6 billion in AUM (PGI has another $46 billion in AUM outside the U.S., including China, shown as PI] e Ranked #29 on //-300 for 2009, up from #32 in 2008* and from #46 in 2003 e More than 1,100 employees including over 410 investment pro
Slide 63: Our Current Boutiques
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER OUR CURRENT BOUTIQUES (AUM as of 9/30/10) BUILT BOUTIQUES PURCHASED BOUTIQUES Columbus Circte Investors $16.08 Macro Currency Group Mortey Financial Services $4.1B $14.18 Edge Asset Management $9.98 Post Advisory Group Spectrum Asset Mgmt $10.58 $11.08 JOINT
Slide 64: Our Global Reach
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER OUR GLOBAL REACH ¢ Investment professionals in major global money centers © ~13% of AUM, 17% of revenues from non-U.S. clients* * ~15% of total AUM is invested outside the U.S.* * Manage ~ $4.0B in Sovereign Fund assets e International offices handle ~30% of
Slide 65: Recent Growth Investments
RECENT GROWTH INVESTMENTS e Enhanced quantitative and risk modeling e New investment capabilities — Address shifts in client needs and expectations ° Strengthened global presence — Tap into new pools of assets [e.g., sovereign funds and wirehouses} — Capitalize on international interest in real esta
Slide 66: Growth Drivers
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER GROWTH DRIVERS ¢ Broad range of high added-value investment capabilities ¢ Global, multi-channel distribution presence Ability to leverage Principal Financial Group leadership in global retirement markets e Proven ability to execute our multi-boutique operati
Slide 67: New Value-Added Investment Capabilities
PRINCIPAL GLOBAL INVESTORS GROWTH DRIVER NEW VALUE-ADDED INVESTMENT CAPABILITIES e Equities: higher alpha; non-benchmark oriented strategies e Fixed Income: global high yield; global/emerging market bonds; muni bonds e RealEstate: custom portfolios for sovereign funds e Columbus Circle Investors (CC
Slide 68: Competitive Investment Performance
PRINCIPAL GLOBAL INVESTORS TRACK RECORD COMPETITIVE INVESTMENT PERFORMANCE «Institutional - recent finalist for mandates in range of strategies, including: — Balanced/asset allocation — High quality short term fixed income = Currency/global macro hedge fund — Preferred securities — Emerging markets
Slide 69: Global, Multi-Channel Distribution
PRINCIPAL GLOBAL INVESTORS GLOBAL, MULTI-CHANNEL DISTRIBUTION * Institutional distribution = WS: — International * Consultant relations * Affiliate distribution (supports RIS distribution} ¢ Third party distribution — Separately Managed Account {SMA} } ai — Dublin Funds > + Se eer oes 3 FA et ¢ Mana
Slide 70: PGI & RIS Synergies
PRINCIPAL GLOBAL INVESTORS TRACK RECORD LEVERAGING PRINCIPAL FINANCIAL GROUP LEADERSHIP PGI & RIS SYNERGIES Principal Global Investors manages a high percentage of RIS assets re. 70
Slide 71: PGI & PI Synergies
PRINCIPAL GLOBAL INVESTORS TRACK RECORD LEVERAGING PRINCIPAL FINANCIAL GROUP LEADERSHIP PGI & PI SYNERGIES Principal Global Investors is the global/international investment manager for clients of Principal International 71 Fz
Slide 72: Proven Multi-Boutique Approach
PRINCIPAL GLOBAL INVESTORS PROVEN MULTI-BOUTIQUE APPROACH ° Strong leadership team and oversight in place e Independent investment processes © Ongoing strategic alignment of products across built and purchased boutiques ° Ability to leverage Principal Financial Group global distribution ° Consistent
Slide 73: Strong Track Record
PRINCIPAL GLOBAL INVESTORS TRACK RECORD STRONG TRACK RECORD (AUM in billions as of 9/30/10) 33% AUM CAGR. GR yh AM cAGR 71% BUM CRS on 02 9 . ae wes iW silill a . | | lil il 201 ous ane Tao 9 SPECTRUM Columbus Ciret ‘Asset Management Rost il olumbus Circle 3% AUM CAGR om va MORLEY FINANCIAL SENS su
Slide 74: Looking Ahead: Advancing Our Acquisition Strategy
JOKING AHEAD ADVANCING OUR ACQUISITION STRATEGY
Slide 75: 5-Year Vision: PGI
PRINCI LOBAL INVESTORS LOOKING AHEAD 5-YEAR VISION: PGI STRATEGIC MILESTONES Offering world-class investment management services to institutional investors and their advisors worldwide N TE}
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Slide 77: Principal International
PRINCIPAL INTERNATIONAL NORMAN SORENSEN President Principal International “a
Slide 78: The Principal Helps Growing Businesses, Individuals and Institutions
The Principal helps growing businesses, individuals and institutional clients in select markets worldwide achieve financial security and success. U.S. EMPLOYEE BENEFITS U.S. FINANCIAL SERVICES GLOBAL ASSET FOR GROWING FOR EXECUTIVES, MANAGEMENT BUSINESSES EMPLOYEES AND INDIVIDUALS Extend our retirem
Slide 79: Emerging Market Middle Class Growth
PRINCIPAL INTERNATIO OPPORTUNITY EMERGING MARKET MIDDLE CLASS GROWTH MIDDLE CLASS POPULATION IN MILLIONS 2015 MEXICO 51 +2. INDONESIA 4 MALAYSIA _ & 19 } THAILAND " / eg 79 Pacific Markets
Slide 80: Emerging Market Near-Term Potential
PRINCIPAL INTERNATIONAL OPPORTUNITY EMERGING MARKET NEAR-TERM POTENTIAL MIDDLE CLASS POPULATION IN MILLIONS 2015 SOURCE: Assoc, World Bank, Economist Intelligence Unit, internal estimates; Euromonitor, World Bank, CLSA Asia- 80 Pacific Markets
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Principal Financial Group — Investor Day (December 2010) on 6ix