Principal Financial Group, Inc. Announces Fourth Q
Principal Financial Group, Inc. Announces Fourth Quarter and Full-Year 2012 Results
Company Also Announces Common Stock Dividend Increase
Fourth quarter 2012 operating earnings1 of $243.9 million, an increase of 21 percent over fourth quarter 2011; net income available to common shareholders was $218.6 million, an increase of 47 percent over fourth quarter 2011.
Full-year 2012 operating earnings of $808.0 million, a decrease of 4 percent over 2011 (adjusted operating earnings of $898.7 million2, an increase of 7 percent over full-year 2011); net income available to common shareholders of $772.9 million, an increase of 25 percent over 2011.
Year-end 2012 record assets under management of $403.0 billion, an increase of 20 percent compared to year-end 2011.
First quarter dividend of $0.23 per share of common stock, an increase of 10 percent over the fourth quarter 2012 dividend.
DES MOINES, Iowa--(BUSINESS WIRE)--Jan. 31, 2013-- Principal Financial Group, Inc. (NYSE: PFG) today announced results for fourth quarter and full year 2012. The company reported operating earnings of $243.9 million for fourth quarter 2012, compared to $201.8 million for fourth quarter 2011. Operating earnings per diluted share (EPS) were $0.82 for fourth quarter 2012, compared to $0.66 for fourth quarter 2011. The company reported net income available to common stockholders of $218.6 million, or $0.74 per diluted share for fourth quarter 2012, compared to $148.5 million, or $0.48 per diluted share for fourth quarter 2011, reflecting a strong increase in operating earnings and improvement in credit-related losses. Operating revenues for fourth quarter 2012 were $2,293.1 million compared to $2,103.3 million for the same period last year.
The company reported operating earnings of $808.0 million for the twelve months ended Dec. 31, 2012 (which were negatively impacted by a $90.7 million charge from the third quarter actuarial assumption review, predominantly due to the lower interest rates), compared to $843.8 million for the twelve months ended Dec. 31, 2011. Operating earnings per diluted share (EPS) were $2.69 for the twelve months ended Dec. 31, 2012, compared to $2.66 for the twelve months ended Dec. 31, 2011. (Adjusted 2012 EPS of $2.992 is up 12 percent over reported 2011 EPS.) The company reported net income available to common stockholders of $772.9 million, or $2.57 per diluted share for the twelve months ended Dec. 31, 2012, compared to $619.7 million, or $1.95 per diluted share for the twelve months ended Dec. 31, 2011. Operating revenues for the year 2012 were $9,175.4 million compared to $8,281.0 million for the same period last year.
The company also announced today that its board of directors has declared a quarterly dividend of $0.23 per share of common stock, an increase of 10 percent over the fourth quarter 2012 dividend. The dividend will be payable on March 29, 2013 to shareholders of record as of March 11, 2013.
“The Principal Financial Group ended a strong 2012 with very strong fourth quarter earnings. The continued strength of our underlying business fundamentals and successful execution of our strategy gives us momentum going into 2013,” said Larry D. Zimpleman, chairman, president and chief executive officer. “We significantly advanced our international strategy with two acquisitions in Latin America last year. Closing on Cuprum will further solidify our position as a global investment management leader in 2013 and beyond.”
Added Terry Lillis, senior vice president and chief financial officer, “Our very strong earnings in the fourth quarter and the ability of our fee-based business model to continuously generate deployable capital gives us continued financial flexibility, as demonstrated by our strong capital deployment in 2012 and today’s announcement of a 10 percent increase in our quarterly common stock dividend. Full-year book value per share (excluding other comprehensive income) increased 7 percent over full year 2011 and our investment portfolio is performing very well.”
Key Highlights
Fourth Quarter
Retirement and Investor Services Accumulation sales were up 17 percent in the fourth quarter compared to the year ago quarter. This includes $3.3 billion for Full Service Accumulation, $4.2 billion for Principal Funds and $448 million for Individual Annuities. Net cash flows of $1.6 billion for Full Service Accumulation and $1.5 billion for Principal Funds.
Principal Global Investors had record unaffiliated assets under management (AUM) of $98.2 billion.
Principal International reported net cash flows of $2.0 billion and record AUM of $69.3 billion (excluding $11.3 billion of AUM in our asset management joint venture in China, which is not included in reported assets under management).
Individual Life sales of $84.8 million, up 56 percent over fourth quarter 2011.
Specialty Benefits premium and fee growth of 5 percent over fourth quarter 2011 and favorable incurred loss ratio of 64.3 percent.
Full Year Results
Record AUM of $403.0 billion, up 20 percent compared to year-end 2011.
Total company net cash flows of $29.8 billion.
Strong capital position with an estimated risk based capital ratio of 415-420 percent at year end and $2.5 billion of excess capital.3
Book value per share, excluding AOCI4 was $29.20, up 7 percent over 2011.
Four quarterly dividends to common stockholders in 2012 totaling $0.78 cents per share, up 11 percent over 2011.
Repurchased 9.9 million shares of common stock in 2012 at an average price of $25.92.
Net Income
Fourth Quarter
Net income available to common stockholders of $218.6 million for fourth quarter 2012, up 47 percent compared to fourth quarter 2011 reflecting:
Net realized capital losses of $0.5 million, which includes:
$15.0 million of net losses, down 48 percent from a year ago quarter, related to sales and permanent impairments of fixed maturity securities. This includes $11.1 million of losses on commercial mortgage backed securities, which is down 51 percent from $22.6 million loss in fourth quarter 2011.
Other after-tax adjustment loss of $24.8 million, which reflects expenses incurred extinguishing $400 million of long-term debt that was scheduled to mature in 2014.
Full Year Results
Net income available to common stockholders of $772.9 million for the twelve months ended Dec. 31, 2012, reflects net realized capital gains of $39.1 million, up $180.9 million from a $141.8 loss in 2011. This includes:
A net gain of $141.2 million as a result of Catalyst Health Solutions, Inc.’s merger into a subsidiary of SXC Health Solutions Corp. (SXC), and our subsequent sale of our interest in SXC (now known as Catamaran Corporation);
$76.8 million of net losses, a 36 percent improvement over 2011 related to sales and permanent impairments of fixed maturity securities, including:
$60.1 million of losses on commercial mortgage backed securities, which is down 34 percent from $90.5 million loss in 2011.