Non-GAAP Financial Measures

Principal Financial Group, Inc.

(in millions, except as indicated)

For the year ended Dec 31
2016 2015 2014 2013 2012
Net income available to common stockholders
Net income available to common stockholders $1,316.5 $1,209.3 $1,111.1 $879.7 $773.6
Net realized capital gains (losses)1 (37.4) 133.8 100.5 179.1 (39.0)
Other after-tax adjustments 52.0 (72.6) 106.3 1.1 74.2
Operating earnings $1,333.1 $1,270.5 $1,317.9 $1,059.9 $808.8
1This is a non-GAAP financial measure. See reconciliation below.
For the year ended Dec 31
2016 2015 2014 2013 2012
Net realized capital gains (losses)
Net realized capital gains (losses) $171.1 $(51.1) $14.7 $(225.2) $114.1
Recognition of front-end fee revenues 0.2 (0.1) (0.7) (0.9) (0.2)
Market value adjustments to fee revenues (2.5) (1.1) - - (0.3)
Net realized capital gains (losses) related to equity method investments 0.1 - - - -
Derivative and hedging-related adjustments (94.1) (111.7) (92.8) (93.9) (98.9)
Sponsored investment fund adjustments 6.1 1.3 - - -
Amortization of deferred acquisition costs (66.2) (12.2) (37.7) 32.3 28.8
Capital gains distributed - operating expenses 3.7 15.4 (10.6) (23.6) (11.6)
Amortization of other actuarial balances (11.2) (1.8) (11.6) 14.8 7.8
Market value adjustments of embedded derivatives 50.0 (0.2) 4.8 18.4 (0.6)
Capital gains distributed - cost of interest credited (10.9) (9.2) (10.6) (2.2) (0.6)
Net realized capital gains (losses) tax adjustments 6.6 45.6 43.6 101.4 8.6
Net realized capital gains (losses) attributable to noncontrolling interest, after-tax (15.5) (8.8) (1.0) (0.2) (8.3)
Net realized capital gains (losses) associated with exited group medical insurance business, after-tax - 0.1 - - 0.2
Total net realized capital gains (losses) $37.4 $(133.8) $(100.5) $(179.1) $39.0
For the year ended Dec 31
2016 2015 2014 2013 2012
Diluted earnings per common share
Net income $4.50 $4.06 $3.65 $2.95 $2.58
Net realized capital (gains) losses (0.13) 0.44 0.34 0.60 (0.14)
Other after-tax adjustments 0.18 (0.24) 0.36 - 0.25
Adjustment for redeemable noncontrolling interest - - 0.06 - -
Operating earnings $4.55 $4.26 $4.41 $3.55 $2.69
For the year ended Dec 31
2016 2015 2014 2013 2012
Stockholders' equity
Stockholders' equity $10,293.8 $9,377.4 $10,232.0 $9,777.0 $9,703.4
Noncontrolling interest (66.5) (65.8) (48.0) (92.8) (20.0)
Stockholders' equity attributable to Principal Financial Group, Inc. 10,227.3 9,311.6 10,184.0 9,684.2 9,683.4
Net unrealized capital (gains) losses (827.0) (715.9) (1,148.3) (700.6) (1,235.7)
Net unrecognized postretirement benefit obligation 408.4 450.2 411.1 155.9 488.5
Preferred stock, at par - - (0.1) (0.1) (0.1)
Paid-in capital - preferred stock - - (541.9) (541.9) (541.9)
Stockholders' equity, x-AOCI other than foreign currency translation adjustment, available to common stockholders $9,808.7 $9,045.9 $8,904.8 $8,597.5 $8,394.2
For the year ended Dec 31
2016 2015 2014 2013 2012
Net income ROE available to common stockholders (including AOCI)
Net income ROE available to common stockholders (including AOCI) 13.5% 12.8% 11.8% 9.6% 8.8%
Net unrealized capital gains (losses) 1.1% 1.3% 1.2% 1.2% 1.0%
Net unrecognized postretirement benefit obligation -0.6% -0.6% -0.3% -0.4% -0.4%
Net income ROE available to common stockholders
( x-AOCI, other than foreign currency translation adjustment)
14.0% 13.5% 12.7% 10.4% 9.4%
Net realized capital (gains) losses -0.5% 1.5% 1.2% 2.1% -0.5%
Other after-tax adjustments 0.6% -0.8% 1.2% 0.0% 0.9%
Operating earnings ROE
(x-AOCI, other than foreign currency translation adjustment)
14.1% 14.2% 15.1% 12.5% 9.8%