the principal financial group 101

The Principal Financial Group®

May 2014

Table of Contents 1. The Principal Financial Group Investor Presentation 2. Recent Investor Disclosures

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 that management believes are useful to investors because they illustrate the performance of the company’s normal, ongoing operations which is important in understanding and evaluating the company’s financial condition and results of operations. While such measures are also consistent with measures utilized by investors to evaluate performance, they are not, however, a substitute for U.S. GAAP financial measures. Therefore, at the end of the presentation, the company has provided reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. The company adjusts U.S. GAAP financial measures for items not directly related to ongoing operations. However, it is possible these adjusting items have occurred in the past and could recur in future reporting periods. Management also uses non-GAAP financial measures for goal setting, as a basis for determining employee and senior management awards and compensation, and evaluating performance on a basis comparable to that used by investors and securities analysts. The company also uses a variety of other operational measures that do not have U.S. GAAP counterparts, and therefore do not fit the definition of non-GAAP financial measures. Assets under management is an example of an operational measure that is not considered a non-GAAP financial measure.

3

Forward Looking Statements

4

Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec. 31, 2013, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions may significantly affect the company’s ability to meet liquidity needs, access to capital and cost of capital; conditions in the global capital markets and the economy generally; continued volatility or further declines in the equity, bond or real estate markets; changes in interest rates or credit spreads; the company’s investment portfolio is subject to several risks that may diminish the value of its invested assets and the investment returns credited to customers; the company’s valuation of securities may include methodologies, estimations and assumptions that are subject to differing interpretations; the determination of the amount of allowances and impairments taken on the company’s investments requires estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be realized or result in future impairments; competition from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the company’s financial strength or credit ratings; inability to attract and retain sales representatives and develop new distribution sources; international business risks; the company’s actual experience could differ significantly from its pricing and reserving assumptions; the company’s ability to pay stockholder dividends and meet its obligations may be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the pattern of amortizing the company’s DAC and other actuarial balances on its universal life-type insurance contracts, participating life insurance policies and certain investment contracts may change; the company may need to fund deficiencies in its “Closed Block” assets that support participating ordinary life insurance policies that had a dividend scale in force at the time of Principal Life’s 1998 conversion into a stock life insurance company; the company’s reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses; changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt the company’s business, and damage its reputation; results of litigation and regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be material; fluctuations in foreign currency exchange rates; and applicable laws and the company’s certificate of incorporation and by-laws may discourage takeovers and business combinations that some stockholders might consider in their best interests.

A Leading Financial Services Company •Fortune 500 company; 135 year history; 19.2 million customers •Offices in 18 countries; nearly 14,600 employees worldwide •Full range of retirement savings, investment and insurance solutions for small to

medium-sized businesses & their employees, individuals, and institutions

Assets Under Management by Source $495.5 billion

as of March 31, 2014

Retirement & Investor Services

Accumulation 47%

Corporate 1%

U.S. Insurance Solutions

4%

Principal International

22%

Principal Global

Investors 23%

Operating Earnings $1,288.3 million* March 31, 2014


Accumulation 49%


16% Principal

International 18% Principal

Global Investors 9%

*Trailing Twelve Months. After-tax. Results exclude Corporate.

5

COMPANY OVERVIEW

RIS Guaranteed

8%

RIS Guaranteed

3%

Organizational Structure

The Principal Financial Group Zimpleman CEO – 43/43 yrs*

Lillis CFO – 32/32 yrs


Houston - President

30/30 yrs

Principal Global Investors

McCaughan – President

40/12 yrs


Valdes – President

26/23 yrs


Houston – President

30/30 yrs

Corporate

Full Service Accumulation Principal Funds Individual Annuities Bank & Trust Full Service Payout Investment Only

Life Specialty Benefits

*Years of experience: Industry/The Principal as of year end 2014. 6

COMPANY OVERVIEW

PRINCIPAL FINANCIAL GROUP Headquarters Des Moines, Iowa

Mexico Principal AFORE Pensions

Principal Seguros Life Insurance

Principal Pensiones Annuities

Principal Fondos de Inversión, S.A. de C.V (PFI) Mutual Funds, IAM

Chile Principal Vida Annuities / Pensions

Principal Creditos Hipotecarios Residential Mortgages

Principal AGF Mutual Funds, IAM

Cuprum Pensions - Mandatory

Brazil BrasilPrev - JV with Banco do Brasil Pensions, Annuities, IAM

Claritas Mutual Funds

India Principal/AMC - JV with PNB/Vijaya Mutual Funds

Principal PNB Asset Management Co. Asset Management

Malaysia CIMB-Principal AMC - JV with CIMB Group Mutual Funds, Asset Management

CIMB Principal Islamic Asset Management (PGI JV with CIMB Group) Islamic Institutional Asset Management

Hong Kong Principal Insurance Company Pensions, Mutual Funds, IAM Principal Global Investors (Asia) Ltd. Asset Management

China CCB-Principal AMC – JV with CCB Mutual Funds, IAM

Representative Offices Pensions, Asset Management

The Principal Financial Group Global Presence

Germany Principal Global Investors (Europe) LTD Asset Management

Ireland Principal Global Investors (Ireland) Ltd Mutual Funds

UK Principal Global Investors(Europe) LTD Asset Management Japan

Principal Global Investors (Japan) LTD Asset Management

Australia Principal Global Investors (Australia) LTD Asset Management

Singapore CIMB-Principal AMC Principal Global Investors (Singapore) Asset Management

Thailand CIMB-Principal AMC Mutual Funds, Asset Management

Indonesia CIMB-Principal AMC Mutual Funds, Asset Management

Netherlands Principal Global Investors Representative Office Asset Management

UAE Principal Global Investors Representative Office Asset Management

7

COMPANY OVERVIEW

135 Years of Experience

1879 Life

Assoc

1911 Mutual Life Co

1936 Mortgage Banking/

Commercial Mortgage

1941 Group

Health & Pension

1968 Mutual Funds

1985 Principal Financial

Group

1998 Principal Bank;

Mutual Holding Co

2001 IPO;

Spectrum

1990 Principal

Intl

1970s Defined

Contribution

1999 Principal Global

Investors; BrasilPrev JV;

Principal Asset Mgmt Co (India)

2002 Benefit

Consultants Inc; Total

Retirement Suite SM

2006 Washington

Mutual Funds; WM Advisors

2008 CIMB-Principal

Islamic Asset Mgmt

2007 Morley

2011 HSBC Afore; Finisterre;

Origin

1995 Principal

Chile

1996 Principal

Hong Kong

1997 Principal Mexico

2003 Post

Advisory Group

2005 CCB

Principal; Columbus

Circle

JV – Joint Venture. IPO – Initial Public Offering.

2010 BrasilPrev

JV extension

2012 Claritas; Cuprum

2013 Liongate

8

COMPANY OVERVIEW

Name Age* Title (Industry/PFG)*

Larry D. Zimpleman 63 Chairman, President & CEO 43/43 Daniel J. Houston 53 President - Retirement, Insurance and Financial Svcs 30/30 James P. McCaughan 61 President - Global Asset Management 40/12 Luis E. Valdes 57 President - Principal International 26/23 Timothy M. Dunbar 57 Executive VP & Chief Investment Officer 33/28 Ralph C. Eucher 62 Executive VP 30/20 Terrance J. Lillis 62 Executive VP & Chief Financial Officer 32/32 Gary P. Scholten 57 Executive VP & Chief Information Officer 34/34 Karen E. Shaff 60 Executive VP, General Counsel & Secretary 32/32 Rex Auyeung 62 Senior VP & President, Principal Financial Group – Asia 37/20 David Blake 48 Senior Executive Director & Head of PGI Fixed Income 25/14 Ned A. Burmeister 55 Senior VP & COO – Principal International 35/35 Gregory J. Burrows 52 Senior VP - Retirement & Investor Svcs 28/28 Gregory B. Elming 54 Senior VP & Chief Risk Officer 32/32 Nora M. Everett 55 Senior VP - Retirement & Investor Svcs 23/23 Pat Halter 55 Senior Executive Director – Principal Real Estate Investors 30/30 Julia M. Lawler 54 Senior VP - Investment Services 32/30 Barbara McKenzie 54 Senior Executive Director & COO – Boutique Operations 30/30 Timothy J. Minard 51 Senior VP - Distribution 28/28 Mary A. O’Keefe 58 Senior VP & Chief Marketing Officer 24/24 Jerry Patterson 48 Senior VP - Retirement & Investor Svcs 26/13 Beth Raymond 48 Senior VP & Chief Human Resources Officer 23/14 Angela R. Sanders 51 Senior VP & Controller 25/25 Ellen Shumway 51 Senior Executive Director – Strategy & Boutique Operations 24/9 Deanna D. Strable 46 Senior VP - U.S. Insurance Solutions 25/25 Roberto Walker 49 Senior VP & President, Principal Financial Group – LatAm 25/18

*As of year end 2014 9

COMPANY OVERVIEW

Experienced Management Team

Retirement and Investor Services •A leading provider of DC plans1

•#1 provider of DB plans2

•#1 provider of ESOP plans3

•#4 manager of Target Date Funds4

Industry Leadership

Sources: 1 PLANSPONSOR Recordkeeeping Survey 6/13, 2 PLANSPONSOR, April 2013; 3 PLANSPONSOR 6/13; 4 In the United States. Strategic Insight Lifecycle fund data report 4Q2013; 5Pensions & Investments, “The Best Places to Work in Money Management among companies with our size category”, PFG recognition 12/09/2013. 6Managers ranked by total worldwide real estate assets (net of leverage), data as of 6/30/13, “Largest Real Estate Managers”, Pensions & Investments, October 28, 2013; 7Managers ranked by U.S. institutional, tax-exempt assets managed internally, as of 12/31/12, “Largest Money Managers”, Pensions & Investments, Online Research Center. 8Principal Global Investors Europe was awarded two 2013 Pension Fund Perception Programme awards by Investment & Pensions Europe (IPE) magazine. Results for Principal Global Investors Europe are based on input from participating pension funds with over €1trn in assets under management, and reporting on over 300 managers, who were asked to rank the criteria they considered most important in selecting asset managers they appoint to manage their portfolios. The Manager Recommended to Other Pension Funds by 100% of Clients category was awarded to 25 managers selected from a field of 180 managers. 9Quantum, 12/2012; 10SP (Superintendencia de Pensiones), 1/2013; 11Lipper. Percentage of market share as of 07/2013; 12Lipper. Based on AUM as of 03/2013; 13CONSAR & PROCESAR, May 2013; 14PLANSPONSOR Dec 12 (based on number of plans record-kept); 15LIMRA 2012 surveys: Non-medical based on fully insured employer contracts in force & Individual Disability Insurance (IDI) rank based on in-force policies.

Principal Global Investors •Best Place to Work in Money

Management 5 •Top 10 manager Real Estate 6 •Top 10 manager High Yield7 •Manager Recommended to Other

Pension Funds by 100% of Clients8

Principal International •#1 net deposits – Brazil (Brasilprev)9

•#1 APV – Chile10

•#2 asset management – Malaysia11

•Top ten MPF provider – Hong Kong12

•#5 AFORE – Mexico13

U.S. Insurance Solutions •#2 Non-qualified deferred

compensation14

•#5 Non-medical coverages15

•#5 IDI coverages15

10

COMPANY OVERVIEW

Financial Strength: Current Ratings

(as of April 2014)

• Moody's Investors Service 'A1', Good – fifth highest of 21 rating levels. Outlook: Stable Rating as of November 2013

• FitchRatings

'AA-‘, Very Strong - fourth highest of 21 rating levels. Outlook: Negative Rating as of October 2013

• Standard & Poor's ‘A+’, Strong - fifth highest of 21 rating levels. Outlook: Stable Ratings as of March 2014

• A.M. Best

'A+', Superior - second highest of 16 rating levels. Outlook: Stable Rating as of December 2013

Ratings related to Principal Life Insurance Company and Principal National Life Insurance Company. 11

COMPANY OVERVIEW

Meet retirement and employee benefit needs of growing businesses and their employees.

Capitalize on unprecedented demand for financial services among Baby and Echo Boomers.

Grow proven, global, multi-boutique asset management model for institutional markets and clients.

Extend retirement and long-term asset accumulation expertise in key emerging markets with fast growing middle classes and retirement assets.

Globally Competitive Employers

Aging Populations

Fiscally Constrained

Governments

Our Strategy is Well Suited for the Current Environment

12

COMPANY OVERVIEW

at a glance PRINCIPAL GLOBAL INVESTORS

• Serve clients in over 60 countries, including several major central banks and sovereign wealth funds

• Network of specialized investment boutiques manage assets for a broad range of investors around the world

• Manages: – 58% of Full Service Accumulation assets – 76% of Principal Funds assets – 100% of Principal Life general account assets

• Office locations in major financial markets worldwide

• Long-standing commitment to corporate stewardship

As of 3/31/14.

Principal Global Investors Assets Under Management

$298B By Asset Class

13

Fixed Income $121B

Equity $114B

Real Estate $50B

Alternatives $13B

OUR CURRENT

BOUTIQUES (AUM as of 3/31/14)

PRINCIPAL GLOBAL INVESTORS Principal Global

Equities $76.0B

Principal Global Fixed Income

$74.7B

Private Real Estate $32.6B

CMBS $6.3B

Origin Asset Management

$2.6B

Edge Asset Management1

$18.2B

Fixed Income Equities

REITs $6.7B

Principal Enterprise Capital

$4.9B

CIMB – Principal Islamic Asset

Mgmt. $573M3

Morley Financial Services $17.7B

Spectrum Asset Management

$15.9B

Macro Currency Group $9.1B

Post Advisory Group $12.0B

Multi-Asset Advisors $588M2

Real Estate Asset Allocation/ Alternatives

Finisterre Capital $1.8B

Columbus Circle Investors

$17.6B

Liongate Capital Management

$693M

14

1 Edge Asset Management advises on an additional $8.1B across multiple boutiques in the Strategic Asset Management (SAM) product. 2 Responsible for allocation decision-making and implementation across a range of products and client portfolios, and for providing macro economic perspectives to guide allocations. Multi-Asset Advisors advise on an additional $28B managed by multiple PGI boutiques. 3 Total CIMB AUM is $1.5B with $911M sub-advised to Principal Global Equities

ASSET MANAGEMENT

EXPERTISE WINS MANDATES

$78.7 $82.4

$98.2 $109.4 $111.8

2010 2011 2012 2013 1Q14

Principal Global Investors Unaffiliated AUM

(in billions)

• Best Global Real Estate Fund over the 5-year period (1)

• Principal Global Real Estate Securities Fund - Class I received a 2013 Lipper Fund Award for best performing global real estate fund over the 5-year period (2)

• Top 10 Manager of Real Estate(3) • Top 10 Manager of High Yield(4) • PFG ranked No.1 company among

the Best Places to Work in Money Management(5)

PRINCIPAL GLOBAL INVESTORS

Sources: (1) The Principal Real Estate Investors portfolio management team subadvises the Principal Global Real Estate Securities Fund-Class l, which received the award from Lipper, Inc. for the second year in a row, March 2014. (2) The Principal Real Estate Investors portfolio management team sub-advises the Principal Global Real Estate Securities Fund-Class I, which recently received a 2013 Lipper Fund Award for being the best performing global real estate fund over the 5-year period. (3) Managers ranked by total worldwide real estate assets (net of leverage), as of June 30, 2013, “Largest Real Estate Managers”, Pensions & Investments, October 28, 2013. (4) Managers ranked by U.S. institutional, tax-exempt assets managed internally, as of 12/31/12. “Largest Money Managers”, Pensions & Investments, Online Research Center. (5) Principal Financial Group recognized for firms with our size category. Pensions & Investments, December 09, 2013. (6) Managers ranked by total assets under management. America’s Top 300 Money Manager, Institutional Investor, July 2013, data as of 12/31/2012.

15

STRONG INVESTMENT

PERFORMANCE Represents $147 billion AUM of

which 75% managed by PGI boutiques

Morningstar Rankings Percentage of Principal Funds in the top two quartiles

82% 87%

71% 66%

78% 72% 70%

84% 83%

1-Year 3-Year 5-Year

Mar. 31, 2013 Dec. 31, 2013 Mar. 31, 2014

Principal Funds Class I 16

PRINCIPAL GLOBAL INVESTORS

STRATEGIC PLATFORM

FOR GROWTH

RETIREMENT & INVESTOR SERVICES

INDIVIDUAL

EMPLOYER

INVESTMENT MANAGEMENT

PLATFORM CONTINUUM Across markets | Across life stages

Full Service Accumulation

Principal Funds Investment

Only

Bank

Annuities Full

Service Payout

17

CUSTOMER CENTRIC

BUSINESS MODEL



18

PRINCIPAL TOTAL

RETIREMENT SUITESM

STILL A DIFFERENTIATOR

All rankings sourced from PLANSPONSOR magazine as follows – Defined Benefit: DB Administration Survey 04/13; Defined Contribution and ESOP: Recordkeeping Survey 06/13; Nonqualified: Deferred Compensation Buyer’s Guide 12/13.



Defined Benefit

#1 DB provider

(by # of clients)

Defined Contribution

#2 DC plan

recordkeeper

(by # of plans)

Employee Stock Ownership Plan

#1 ESOP plan recordkeeper

(by # of plans)

Nonqualified Plans

#2 Deferred Comp

provider

(by # of clients)

19

Execution of Strategy:

FSA* SALES



20 *Full-Service Accumulation

2.2 3.5 2.8 1.7 2.0

3.2 2.9 2.7

1.4 1.4

0.7 0.9

1.7

2.3 1.8

3.4 1.3

0.5 0.9

1.5

2.7 2.6

2.4 2.1

1.0 3.2

3.3

3.3 3.0

0

2

4

6

8

10

12

14

2007 2008 2009 2010 2011 2012 2013 2014

$ Bi

llion

s

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

9.4 8.3

5.0

6.7

8.5

11.5 10.3

2.7



21

5.1 7.0 6.0 6.0 5.0 6.5 6.8 7.4

4.2 4.5

3.6 4.1 5.0 5.7 5.8

5.8 4.4

3.6 3.8 4.3

5.6 6.3 5.5 4.5

3.8 5.8 6.0

6.5 6.3

0

5

10

15

20

25

30

2007 2008 2009 2010 2011 2012 2013 2014

$ B

illio

ns

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

20.6 20.4

17.0 18.5

20.3

24.3 25.2

RISING DEPOSITS &

THE POWER OF PAYROLL

DEDUCTION

People making a deferral +18%* Avg deferral per member +8%* People receiving a match +27%*

Employment rates have not fully recovered –

UPSIDE EXISTS

* 4Q10 compared to 4Q13.

7.4

FSA* ACCOUNT VALUE BY

MANAGER



22

60.4% 58.4% 58.3% 56.6% 55.8% 55.7% 53.0%

12.7% 12.8% 11.1% 10.0% 10.3% 10.1% 9.6%

20.1% 22.3% 23.3% 26.5% 26.9% 27.3% 27.8%

6.9% 6.6% 7.3% 6.9% 7.1% 7.2% 9.7%

0%

20%

40%

60%

80%

100%

2009

2010

2011

2012

2013

1Q14

1Q14

Dep

osits

PGI managed Sub-advised Non-proprietary ER Securities

*Full-Service Accumulation

OUR DISCIPLINED EXECUTION

DELIVERS POSITIVE RESULTS



23

Profit Margin* Industry Avg vs. The Principal

Principal Industry Avg

* Profit 2000 Benchmark Study, Sterling Resources, Inc. (2013)

Revenue sourced from FSA platform

FSA FSA

Other PFG businesses

Other PFG businesses

2013 2018E

MULTIPLE BUSINESSES

LEVERAGE FSA SUCCESS

Principal Funds, PGI, Bank & Trust, Individual Annuities, Individual Life and Full Service Payout are all beneficiaries

$500 MILLION

$350 MILLION

$0

$2B



24

4.6%

1.9%

4.5% 4.2%

6.0% 6.7%

18.1%

12.5%

2010 2011 2012 2013

Industry net flows Principal Funds net flows

0.8% 1.0% 0.8%

0.2% 0.6%

3.5%

6.3%

1.7%

2010 2011 2012 2013

401k Industry net flows Principal FSA net flows

Full Service Accumulation (FSA)

Net cash flows as % of beginning of year assets 2010-2013. Sources of industry data: 401(k) industry – Department of Labor & Cerulli Associates 2013 (for 2013, industry 401(k) is an estimate); Funds – Strategic Insight Mutual Fund Industry Review (long-term funds). Principal Funds net flows represent long-term funds only.

NET CASH FLOW

CONSISTENTLY OUTPACES INDUSTRY


Principal Funds

25

TOP SELLING FUNDS TTM 1Q14

MidCap $3.2B

Global Diversified Income $3.0B

High Yield $1.7B

Preferred Securities $1.7B

Strategic Asset Management $1.3B

TOTAL FOR TOP 5 $10.8B

ASSET ALLOCATION LEADERSHIP • #5 largest lifecycle fund manager* • Target date & target risk • Multi-manager solutions • Portfolio construction strategies:

*Based on $38.2B in assets Strategic Insight 12/31/13 Lifecycle Report

NEEDS-DRIVEN INVESTMENT SOLUTIONS Broad and unique asset allocation strategies

26

PRINCIPAL FUNDS

A DIVERSIFIED FAMILY OF

MUTUAL FUNDS

8% 4%

55% 45%

6% 3%

18% 54%

30%

TTM 1Q14 03/31/2014

Equity

Fixed Income

Index

AssetAllocation

Other

Net Cash Flow

Assets Under Management

27


Principal Funds

-23%

DRIVING INDUSTRY

RECOGNITION AND ADVISOR ENGAGEMENT

#5 for DC Investment Manager

Best Global Real Estate Fund Over the 5-Year Period

28


Principal Funds

READY TO RETIRE

INDIVIDUAL INVESTOR STRATEGY

• Portfolio allocation • Participant education

RETIREMENT INCOME

SOLUTIONS

• Education and guidance • Portfolio construction

strategies • Income annuities

ENROLLMENT OPTIMIZATION

• Simplify process • Improve experience • Maximize participation and

influence behavior


29

INDIVIDUAL INVESTOR STRATEGY CAPTURES

ADDITIONAL ASSETS


$0.8 $1.0

$1.2 $1.5

$1.7 $0.2

$0.2

$0.3

$0.3

$0.4

2010 2011 2012 2013 2014E

Asse

ts C

aptu

red

in B

illio

ns

Roll-ins into FSA plans Retail sales to participants

30

Innovative Solutions:

Solving Income Needs

ACCUMULATION

OUR APPROACH: • Education • Planning assistance

(RetireSecure®) • Full array of options • Innovative solutions

MULTI-PRODUCT SOLUTION SET

• “Through Retirement” Lifecycle Funds • Mutual Funds that: ‒ Generate income ‒ Preserve capital ‒ Protect against inflation ‒ Address market volatility

• Annuities to provide: ‒ Fixed returns ‒ Guaranteed income ‒ Protection against volatility

• Bank products • Full Service Payout ‒ Defined Benefit plan terminations

RETIREMENT INCOME

31


INDIVIDUAL LIFE • Non-Qualified Plans 12.4% #2

• Total Life New Sales Premium 1.4% #18

SPECIALTY BENEFITS

• Total Group In-Force Contracts 7.1% #5

- Life 8.6% #4

- Disability 6.4% #5

- Dental 6.3% #7

• Individual Disability In-force Premium 7.9% #5

• Individual Disability New Sales Premium 15.8% #4

U.S. INSURANCE SOLUTIONS

SUCCESS REFLECTS

EXPERTISE SERVING SMB

MARKET

2012 Industry

Rank

2012 Market Share

32 Nonqualified Plans ranking from PlanSponsor Deferred Compensation Buyer’s Guide Dec 13. All other rankings are from LIMRA 2013.

ER/NQ 21%

BOES 36%

Individual 43%

Individual Life Leadership:

FOCUS ON THE BUSINESS MARKET

Business owners’ financial challenges •Exiting the business •Business transition •Retaining key employees •Retirement planning Solutions for key employees •Retirement income •Survivor income •Business protection

2013 Sales

BOES = Business Owner/Executive Solutions ER/NQ = Employer/Non-qualified

SOLUTIONS FOR BUSINESS, BUSINESS OWNERS AND KEY EXECUTIVES

33

3.4% 3.2%

5.6%

2.0% 2.7% 2.8%

Group Dental Group Life Group Disability

The Principal Industry

Dental/ Vision 48% Group

Life 27%

BALANCED PORTFOLIO plus ABOVE INDUSTRY PREMIUM GROWTH

2013 Total Premium & Fees

2012 Premium Growth

Group Benefits

83% Individual Disability

17%

Group Disability 25%

U.S. INSURANCE SOLUTIONS

Specialty Benefits

34

U.S. DISTRIBUTION OVERVIEW

PRINCIPAL CONNECTION

• 70 counselors

with focus on education

CAREER

• 1,000 agents • Sell all products • Career places

80-85% of sales within The Principal family products

BANKS INSURANCE-ORIENTED

INVESTMENT-ORIENTED

• Wirehouses • Regional

Broker/Dealers • Planners

• Insurance Producers

• Banks • Broker/

Dealers • Marketers

THIRD PARTY PROPRIETARY

ALLIANCE MANAGEMENT GROUP (AMG) Select 3rd party distributors with dedicated support

STRENGTHENS RELATIONSHIPS AND FUELS SALES GROWTH

All supported by DEDICATED SERVICE TEAMS providing education, training, counseling and retention

11 WHOLESALE CHANNELS Group

Benefits Retirement Investment

Solutions Annuities NQDC Disability

Insurance Retail

Life AMG Worksite ESOP Wellness

35

NATIONAL PRESENCE WITH LOCAL EMPLOYEES

OUR VALUE TO ADVISORS:

● Solutions-based selling

● Point of sale support

● Ongoing service and education support

● Pipeline development

● Practice management

● Advisor education

121 Total Offices

NOTE: Approximate view as of March 2012. Check www.principal.com for actual locations. 36

Account Values – Then & Now

31%

44% 100%

25% AffiliatedDistribution

Third PartyBroker/Dealers

DCIO/RIA

15%

44% 100%

41% AffiliatedDistribution

Third PartyBroker/Dealers

DCIO/RIA

MULTIPLE DISTRIBUTION

CHANNELS

PRINCIPAL FUNDS

SALES – Then & Now

2006 $3.8B

TTM 1Q14 $19.1B

2006 $14.7B

1Q14 $66.6B

37 DCIO = Defined Contribution Investment Only. RIA = Registered Investment Advisor

EXPANDING DISTRIBUTION PARTNERSHIPS HAVE GENERATED STRONG SALES GROWTH

2.0 3.8 4.2 3.1 3.8 3.7 7.6 6.6

2.1 2.5 2.8 5.7 6.5

10.5 14.5

0.2

0.6 1.2 1.2

1.5 1.4

2.5

3.3

1.3

2.3 3.0

0.9

1.5 1.4

1.7

2.0

2006 2007 2008 2009 2010 2011 2012 2013

Individual Annuities

Separately Managed Accounts

Mutual Funds

Full Service Accum

$3.5B $8.0B Total: +34% $8.8B $10.9B CAGR:

$12.5B $13.0B $22.3B

38

$26.4B

BROAD AND DEEP DISTRIBUTION Proprietary provides foundation; 3rd party provides accelerated growth

Rankings and percentages as of 12/31/2013

Product Line New Sales 1st 2nd 3rd Top 3

represent

NQ Life 39%

Retail Life Career LifeMark 55%

Individual Disability Career Plus Group 38%

Group Benefits Gallagher 13%

Fixed Annuities Santander Securities 41%

Variable Annuities Career Principal Connection

KeyCorp Ins. Agency 96%

Mutual Funds Career 24%

FSA – New Sales Assets 30%

FSA – New Sales Case Counts

Career Edward D. Jones 33%

39

PRINCIPAL FINANCIAL

GROUP Mexico (1993) • Annuities, Mutual

Funds, Pensions, Asset Management

• AUM of $12.2B • Wholly owned

Chile (1995) • Annuities, Mutual Funds, Asset

Management, Mandatory Pensions, Voluntary Pensions

• AUM of $39.0B • Wholly owned • Cuprum – a 94.75% owned joint

venture AUM of $33.1B Transaction closed 2/4/2013

Brazil (1999) • Annuities, Pensions,

Mutual Funds, Asset Management

• Brasilprev – a 25% owned joint venture with Banco do Brasil

AUM of $39.9B • Claritas – 62.73%

indirectly owned mutual fund company

AUM of $1.5B

India (2000) • Asset Management,

Mutual Funds • AUM of $0.6B • 65% owned joint venture

with Punjab National and Vijaya Banks

Malaysia (2003) • Conventional & Islamic Asset

Management, Mutual Funds, Pensions

• AUM of $11.4B • CIMB-Principal – 40% owned

joint venture with CIMB Group

China (2005) • Asset Management, Mutual

Funds • AUM of $14.1B • CCB-Principal – a 25%

owned joint venture with China Construction Bank

Hong Kong (1996) • Asset Management, Mutual

Funds, Pensions • AUM of $3.3B • Wholly owned

Thailand (2010) • Asset Management, Mutual Funds • AUM of $0.9B • Wholly owned subsidiary of Malaysian JV

Indonesia (2007) • Asset Management,

Mutual Funds • AUM of $0.2B • Wholly owned

subsidiary of Malaysian JV

Singapore (2006) • Asset Management • AUM of $0.6M • Wholly owned subsidiary

of Malaysian JV

40

AUM as of 3/31/2014

PRINCIPAL INTERNATIONAL

WE’RE IN THE RIGHT COUNTRIES

SOURCE: IMF, Standard Chartered Research.

TEN LARGEST ECONOMIES BY DECADE Current Principal International locations: Asia Latin America


41

1990 US$ trn

1 U.S. 5.9

2 Japan 3.1

3 Germany 1.7

4 France 1.2

5 Italy 1.1

6 UK 1.0

7 Canada 0.6

8 Spain 0.5

9 Brazil 0.5

10 China 0.4

2000 US$ trn

U.S. 10.3

Japan 4.7

Germany 1.9

UK 1.5

France 1.3

China 1.2

Italy 1.1

Canada 0.7

Brazil 0.6

Mexico 0.6

2010 US$ trn

U.S. 15.0 China 5.9

Japan 5.5

Germany 3.3

France 2.5

UK 2.3

Italy 2.0

Brazil 2.1

Canada 1.6

Russia 1.5

2020E US$ trn

U.S. 23.5 China 21.9

Japan 6.1

Germany 5.1

India 4.5

Brazil 3.9

France 3.9

UK 3.7

Italy 2.7

Russia 2.6

2030E US$ trn

China 53.8

U.S. 38.5

India 15.0

Japan 9.3

Germany 7.4

Brazil 6.3

UK 5.8

France 5.7

Indonesia 4.7

Russia 4.6

Joint Venture Partner Partner’s Industry Ranking Partner’s Distribution Reach

Banco do Brasil Largest bank in Latin America1

5,362 branches3

58.6 million customers3

2nd largest listed bank in world2

14,121 branches4

440 million retail customers4

5th largest universal banking group in ASEAN5

1,080 branches5

13.5 million retail customers5

2nd largest Nationalized bank in India6

6,075 branches7

82 million retail customers7

SOURCE: 1Global Finance 2013 in terms of AUM; 2Relbanks.com 2013 based on market capitalization 3Banco do Brasil Annual Report 2012, 4CCB 2012 annual report – customers based on retail debit cards; 5CIMB Group 2012 Annual report – ranking in term of AUM,, 6Indian Banks’ Association 2013 in terms of assets 7Pnbindia.in 2013

LEVERAGING STRONG MARQUEE PARTNERS WITH OUTSTANDING DISTRIBUTION


42

http://www.bb.com.br/portalbb/home/geral/index.bb

Pensions Mutual Funds

Asset Mgmt Annuities

Brazil

Chile

Mexico

China

Hong Kong

India

Malaysia/SE Asia

OUR MARKETS AND PRODUCT OFFERING

= Where we have a product offering today

Targeted Markets

= Targeted expansion

= 10% of market share or Top 25% of providers


43

44

EMERGING MARKETS: THE PI STORY We are in the right markets

8% +

4%

Infla

tion

GDP

3%

“Low Inflation/Strong Growth”

“Low Inflation/Slow Growth”

“High Inflation/Slow Growth ” “High Inflation/Strong Growth” 0

0

6% +

+ Mexico

2.2% GDP Growth

Mature Economies

India

Indonesia

Hong Kong

Brazil

Chile

Malaysia

China

Thailand

(8.9% inflation)

(7.5% GDP)

Source: IMF. 2014 Estimates.

Singapore

Brasilprev – an outlier: Grew NCCF market share

in a volatile market

+

BRAZIL MEXICO CHILE

Brasilprev: #1 in net deposits

5th largest AFORE

(by AUM)

#1 APV: PI Chile and

Cuprum

PRINCIPAL IS 2ND LARGEST PENSION PROVIDER IN LATIN AMERICA

PROVEN STRENGTH &

SUCCESS


Latin America

45 Brazil source: Quantum. 12/12. Mexico source: CONSAR & PROCESAR. 5/13. Chile source: SP (Superintendencia de Pensiones) 12/12. Principal is 2nd largest pension provider in Latin America by AUM among multi-country pension providers.

CREATING A “ONE-STOP

SHOP”


Chile

46 ERM = Enterprise Risk Management

COMPREHENSIVE RETIREMENT PLATFORM Together Principal Financial Chile and Cuprum completes the full spectrum of products for a comprehensive “hire

through retire” approach to the market

TOGETHER

PRODUCTS: Mandatory Pension Voluntary Pensions:

AFP Fund Based Mutual Fund Based Mutual Funds Payout Products:

Annuities Based Structured Payout Life (Accumulation)

DISTRIBUTION: Brokers & Independent Agents Retail Alliances Proprietary Sales Force

Source: Company information.

Chile


47

HONG KONG

Among Top Ten MPF* Providers BUILDING A

STRONG FOUNDATION

MALAYSIA

#2 in Asset Management

CHINA

Top Ten for Mutual Funds

INDIA

1st mover in advisory services business


Asia

48 *Mandatory Provident Fund. Malaysia source: Lipper. Percentage of market share as of 7/13. Hong Kong source: Lipper. Based on AUM as of 3/13. China source: Z-Ben Advisors. Based on AUM as of 1/13. India source: Company data/media tracking at launch 11/12

REMAINS THE SAME

• Liability-driven investment approach • Active asset/liability management • Optimized risk adjusted yields and

returns • High quality, well-diversified portfolio • Global collaboration and best practices • Portfolio responsibility remains at local

country

INVESTMENT PHILOSOPHY

AND STRATEGY

INVESTMENTS

49

Corporate Public Bonds

29%

Corporate Private Bonds

18%

Commercial Mortgages

15% CMBS

6% Cash 2%

MBS 6%

ABS 5%

Government, Agency, State & Political

9% Other* 10%

DIVERSIFIED PORTFOLIO

Principal Financial Group

$69.5 Billion

* Other includes Equity Securities, Residential Mortgages, Real Estate, Policy Loans, Investment in Equity Method subs, Direct Finance Leases and Other Investments

INVESTMENTS

50

Invested Assets & Cash

As of 03/31/14 GAAP carrying value

ASSETS & LIABILITIES

PERFORMED AS EXPECTED

INVESTMENTS

-$600

-$400

-$200

$0

$200

$400

$600

$800

Jan-

12Fe

b-12

Mar

-12

Apr-

12M

ay-1

2Ju

n-12

Jul-1

2Au

g-12

Sep-

12O

ct-1

2N

ov-1

2De

c-12

Jan-

13Fe

b-13

Mar

-13

Apr-

13M

ay-1

3Ju

n-13

Jul-1

3Au

g-13

Sep-

13O

ct-1

3N

ov-1

3De

c-13

In m

illio

ns

Actual net assets & liabilities Modeled net assets & liabilities

51

Majority of unrealized losses were never

realized because we were not forced sellers

CMBS CONTINUES TO

BE WELL SUITED FOR

OUR LIABILITIES

INVESTMENTS

-$200

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2009 2010 2011 2012 2013 3/31/2014

In m

illio

ns

Net Unrealized Losses and Potential Losses All numbers shown are pre-tax

Cumulative CMBS Credit Losses Recorded*

Cumulative CMBS Losses Realized**

Potential Future Credit Losses***

Total Net Unrealized CMBS Losses (CMBS/CMBS CDOPortfolio $4.1B as of 03/31/2014)

* Cumulative CMBS Credit Losses Recorded represent 2009 to present losses due to credit impairments, sales, or trust write-downs. ** Cumulative realized losses since 2009 from sales or trust write-downs. The difference between losses recorded and losses realized are due to impairments. Impairments are the present value of estimated losses anticipated but not yet passed through the trust waterfall or realized from selling a distressed security to the market. Ultimate losses realized on impaired securities may differ from the impairment estimate. *** Potential Future Credit Losses based on our base case stress scenario for securities currently held as of the reporting period presented. This is an estimate. It represents the average of 1000 modeled scenarios. This estimate is subject to change. Potential future losses together with cumulative losses recorded represents an estimate of base case potential cumulative CMBS losses for securities held during the period from 2009 to the present. .

52

POWER OF OUR FEE-BASED

MODEL

OPERATING EARNINGS

Continual shift in mix of business leading to a higher

ROE and more free cash flow

65% 20%

15%

Current

70%

15%

15%

2018E

Fee Spread Risk

53 Fee includes Full Service Accumulation, Mutual Funds, Principal Global Investors, Principal International. Spread includes Individual Annuities, Bank and Trust Services, Investment Only, Full Service Payout. Risk includes U.S. Insurance Solutions.

30%

40%

30%

2001

FINANCIALS

16.4%

12.1% 15%

2007 2013 2018E

50-80 bps average annual ROE

improvement 15% ROE IS AGAIN

WITHIN REACH

OCI = Other Comprehensive Income.

As Reported 2007 2013

Operating earnings $1.1B $1.1B

Average equity (x-OCI) $6.5B $8.7B

Return on equity (x-OCI) 16.4% 12.1%

54

Replaced approximately $150M of risk/spread operating earnings with fee-based operating earnings

FINANCIALS

Driving ROE Growth

OCI = Other Comprehensive Income.

As Reported 2007 2013

Operating earnings $1.1B $1.1B

Average equity (x-OCI) $6.5B $8.7B

Return on equity (x-OCI) 16.4% 12.1%

55

FINANCIALS

EARNINGS

+ 4-5% for market performance

+ 4-5% for growth from sales/NCF

+ 1-2% operational efficiency

EQUITY Fee-based growth Dividend growth Opportunistic

share repurchases

ROE = 50-80 bps average annual

ROE improvement

RETURNING CAPITAL TO

SHAREHOLDERS 2007 Current 2018E

• Less capital needed to support organic growth • Moving to higher dividend payout ratio • Diligently pursuing active acquisition pipeline • Opportunistically buying back shares

56

(Acquisitions & share buybacks) Organic Growth Dividends Available Capital

25%

25% 50%

33%

33%

34% 40%

30%

30%

FINANCIALS

57

Opportunity Year

Announced Rationale

2013 Expand alternative asset class capabilities

2012 Complete offering in Chile with

marquee pension and savings franchise

2012 Entry into Brazil mutual fund and asset management market

2011 Enhance global equity investment capabilities

2011 Establish leadership in emerging markets fixed income investing

AFORE 2011 Solidify position as a leader in Mexican Afore market

BrasilPrev 2010 23 year extension of successful JV with Banco do Brasil

WE’VE PLAYED OFFENSE SINCE

RECESSION

Emerged from financial crisis in a position of

strength and flexibility

Executing on our strategy to increase our

global footprint and fee-based earnings

FINANCIALS

http://www.us.hsbc.com/1/2/home

MERGER & ACQUISITION

CRITERIA

• Mid-teens IRR • More accretive than

buyback over time

1 2 3

STRATEGIC

ABILITY TO ONBOARD

DISCIPLINED PRICING

• Aligns with our core competencies

• Blend local talent with Principal expertise

• Synergies with multiple lines of business preferred

• Adds scale or a new niche

Have a diligent M&A process

that optimizes long-term results

58 IRR = Internal Rate of Return.

FINANCIALS

Capital Deployment

Strategic Acquisitions: $350M

Opportunistic Share Repurchases:

$550M

2011 2012 Over $1.1 billion in total Allocated $2.1 billion

Quarterly Common Stock Dividends $230M

(70 to 78 cents, 11% increase)

Opportunistic Share Repurchases: $300M

Strategic Acquisitions: $1,595M

2013 Allocated $480 million

Anti-dilution & Opportunistic Share

Repurchases: $150M

(~$55M remaining)

Strategic Acquisition: $44M

YTD Quarterly Common Stock Dividends ~$288M

(23 cents for 1Q13 & 2Q13, 26 cents for 3Q13 & 4Q13)

Annual Common Stock Dividends $215M

(27% increase over 2010)

FINANCIALS

59

• Expect deployment for 2014 to be at the top end of the $500M-700M range

• More than $475M announced for 2014 so far

$177M in common stock dividends

o Paid 1Q14 dividend of 28-cents per share

o Announced 2Q14 dividend of 32-cents per share

$200M authorized share repurchase program

o $100M in share repurchases as of 4/25/14, including $55M from prior

year authorization

o $155M remaining on current authorization

Redeemed $100M surplus note in 1Q14

• Active M&A pipeline

• Long term we expect to deploy 65-70 percent of our net income with volatility in

any given year

Capital Deployment FINANCIALS

60

WHAT IF…

IMPACT OF A SLOW-RISING

INTEREST RATE ENVIRONMENT

PROS

CONS • Fixed income AUM declines

• Unrealized gain/loss

BOTTOM LINE: Less downside impact means less upside impact, but still upside

• More Net Investment Income

• Lower security benefit costs

• Individual Life & fixed deferred

annuities benefit

• Potential for more Full Service

Payout pipeline

61

FINANCIALS

5-Year 2014E

Accumulation

Net revenue growth 6-8% 5-7%

Pre-tax RONR 28-32% 30-32%

Guaranteed

Net revenue growth 6-8% (2)-2%

Pre-tax RONR 75-80% 78-80%

Net revenue = operating revenues less benefits, claims & settlement expenses less dividends to policyholders. RONR = Return on Net Revenue. Pre-tax operating margin = pre-tax operating earnings / premium and fees. *Combined basis includes all Principal International companies at 100%.


U.S. Insurance Solutions 5-Year 2014E

Individual Life

Premium & fee growth 4-8% 3-5%

Pre-tax operating margin 16-21% 14-16%

Specialty Benefits

Premium & fee growth 8-10% 3-5%

Pre-tax operating margin 8-12% 10-12%

Loss ratio 65-71% 65-71%

62

Key Business Drivers Outlook

5-Year 2014E

Revenue growth 14-17% 7-10%

Pre-tax margin 30+% 26-28%

Principal Global Investors


5-Year 2014E

Combined* net revenue growth 15-20% 16-18%

Combined pre-tax RONR 55-60% 50-52%

Principal’s share of combined pre-tax earnings N/A 36%

Estimated After-tax operating losses for Corporate of $130-$150 million in 2014

(1) Excludes discontinued operations. (2) Diluted. (3) Operating return on average equity excluding other comprehensive income, based on trailing 12 month period.

2001 2013 CAGR (’01-’13)

YTD 1Q14

YTD 1Q13 Change

Operating Earnings(1)

($M) $433 $1,060 8% $317 $233 36%

Earnings Per Share(2) $1.20 $3.55 9.5% $1.06 $0.79 34%

Assets Under Management ($B)

$98 $483 14% $496 $456 9%

ROE (TTM)(3) 6.9% 12.1% +520 bps 13.0% 9.8% +320 bps

Book Value Per Share (x-OCI) $17.81 $30.35 5% $30.81 $29.19 6%

S&P 500 1,148 1,848 4% 1,872 1,569 19%

Results Demonstrate Relative Strength of Our Business Model

63

the principal financial group 101

Investor Relations