*These situations are representational and do not depict any actual customers or events
Great things happen when you connect people with confidence, aspirations with experience. As a leading global investment manager, the Principal Financial Group is uniquely positioned to make these connections…to connect the hopes and dreams of millions of people around the world with expertise, ideas and guidance…to secure a better tomorrow.
This is the noble work that we do. At the Principal Financial Group. Every day.
We do it by bringing together an integrated portfolio of businesses that weathers economic volatility, but continues to deliver year after year, as evidenced by outstanding 2014 results. In doing this work, we grow. But growth alone is not our preoccupation. Our preoccupation is to help millions of people achieve financial security. This has been our focus since 1879.
I encourage you to examine 2014 results as but one chapter in a long story—another outstanding year, despite ongoing economic headwinds, in a series of strong years—that illustrates an enduring strategy, excellent execution, and long-term vision. A few highlights from the year:
*Represents the percentage of Principal mutual funds, separate accounts and collective investment trusts in the top two Morningstar quartiles as of 12/31/14
Throughout this report, you'll learn more about ways we're working to meet retirement and long-term savings needs by bringing our expertise to bear in the most attractive retirement and long-term savings markets in the world. In 2014, we further strengthened our presence in markets where aging populations and the number of middle-class workers continue to grow…making the need for what we do more relevant every day in Latin America, Asia, and the United States.
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% over 2013. We also continue 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 business 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:
As we look ahead, here are our growth and capital deployment plans:
In closing, 2014 was an outstanding year, but our best days are ahead. We remain singularly focused on meeting the needs of customers around the world, and, in doing so, providing superior value to long-term investors.
I urge you to vote your shares before the annual meeting on May 19. What you have to say matters to our Board, to our employees and to me.
Chairman and CEO