Schedule II - Condensed Financial Information of Registrant (Parent Only)

Statements of Financial Position


	December 31,
	2018		2017
	(in millions)
Assets
Fixed maturities, available-for-sale	$	211.5		—
Fixed maturities, trading		308.9		351.8
Cash and cash equivalents		334.9		842.8
Other investments		10.7		10.2
Income taxes receivable		16.9		44.2
Deferred income taxes		331.0		329.4
Amounts receivable from subsidiaries		5.2		4.4
Other assets		23.3		12.8
Investment in unconsolidated entities		13,862.4		15,063.2
Total assets	$	15,104.8	$	16,658.8
Liabilities
Long-term debt	$	3,129.8	$	3,128.1
Accrued investment payable		23.1		23.1
Pension liability		557.9		658.3
Other liabilities		4.0		—
Total liabilities		3,714.8		3,809.5
Stockholders' equity
Common stock, par value $.01 per share - 2,500 million shares authorized, 476.7 million and 474.1 million shares issued, and 279.5 million and 289.0 million shares outstanding in 2018 and 2017		4.8		4.7
Additional paid-in capital		10,060.7		9,925.2
Retained earnings		10,290.2		9,482.9
Accumulated other comprehensive income (loss)		(1,565.1)		165.5
Treasury stock, at cost (197.2 million and 185.1 million shares in 2018 and 2017)		(7,400.6)		(6,729.0)
Total stockholders' equity attributable to Principal Financial Group, Inc.		11,390.0		12,849.3
Total liabilities and stockholders' equity	$	15,104.8	$	16,658.8

See accompanying notes.

Statements of Operations


	For the year ended December 31,
	2018		2017		2016
	(in millions)
Revenues
Fees and other revenues	$	—	$	7.8	$	—
Net investment income		25.8		9.7		3.4
Net realized capital losses		(8.2)		(0.6)		—
Total revenues		17.6		16.9		3.4
Expenses
Other operating costs and expenses		191.9		238.1		312.3
Total expenses		191.9		238.1		312.3
Loss before income taxes		(174.3)		(221.2)		(308.9)
Income taxes (benefits)		(62.5)		63.1		(134.9)
Equity in the net income of subsidiaries		1,658.3		2,594.7		1,490.5
Net income attributable to Principal Financial Group, Inc.	$	1,546.5	$	2,310.4	$	1,316.5

See accompanying notes.

Statements of Cash Flows


	For the year ended December 31,
	2018		2017		2016
	(in millions)
Operating activities
Net income	$	1,546.5	$	2,310.4	$	1,316.5
Adjustments to reconcile net income to net cash used in operating activities:
Net realized capital losses		8.2		0.6		-
Stock-based compensation		2.9		3.0		3.6
Equity in the net income of subsidiaries		(1,658.3)		(2,594.7)		(1,490.5)
Changes in:
Net cash flows for trading securities and equity securities with operating intent		32.4		(352.6)		-
Current and deferred income taxes (benefits)		15.7		163.8		(60.3)
Other		(79.8)		26.3		42.1
Net cash used in operating activities		(132.4)		(443.2)		(188.6)
Investing activities
Fixed maturities available-for-sale and equity securities with intent to hold:
Purchases		(210.9)		-		-
Maturities		2.3		-		-
Net purchases of property and equipment		(0.1)		(0.1)		(0.1)
Net change in other investments		(2.2)		(1.1)		1.3
Dividends and returns of capital received from unconsolidated entities		1,041.6		1,002.5		1,295.3
Net cash provided by investing activities		830.7		1,001.3		1,296.5
Financing activities
Issuance of common stock		64.0		162.5		37.8
Acquisition of treasury stock		(671.6)		(220.4)		(277.3)
Excess tax benefits from share-based payment arrangements		-		-		0.7
Dividends to common stockholders		(598.6)		(540.0)		(464.9)
Principal repayments of long-term debt		-		-		(744.5)
Issuance of long-term debt		-		-		644.2
Net cash used in financing activities		(1,206.2)		(597.9)		(804.0)
Net increase (decrease) in cash and cash equivalents		(507.9)		(39.8)		303.9
Cash and cash equivalents at beginning of year		842.8		882.6		578.7
Cash and cash equivalents at end of year	$	334.9	$	842.8	$	882.6

See accompanying notes.

(1) Basis of Presentation

The accompanying condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto of Principal Financial Group, Inc.

In the parent company only financial statements, our investment in unconsolidated entities is stated at cost plus equity in undistributed earnings of subsidiaries.

Principal Financial Group, Inc. sponsors nonqualified benefit plans for select employees and agents and is responsible for the obligations of these plans. Nonqualified plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The invested assets and benefit plan liabilities reported in the statements of financial position exclude amounts held in these trusts. The Rabbi trusts had $671.7 million and $643.3 million of plan assets and $542.4 million and $524.7 million of benefit plan liabilities as of December 31, 2018 and 2017, respectively.

During November 2016, the parent company became the sponsor of the defined contribution plans and deferred compensation plans discussed in Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 11, Employee and Agent Benefits.” Prior to November 2016, Principal Life Insurance Company, an indirect wholly owned subsidiary of the parent company, was the sponsor of these plans.

(2) Dividends and Returns of Capital Received from (Contributions to) Unconsolidated Entities

The parent company received cash dividends and returns of capital totaling $1,041.6 million, $1,002.5 million and $1,295.3 million from subsidiaries in 2018, 2017 and 2016, respectively.

(3) Supplemental Disclosures of Non-Cash Investing Activity

The parent company’s assumption of the deferred income tax asset and net plan assets associated with the defined contribution plans and deferred compensation plans previously sponsored by Principal Life Insurance Company resulted in a non-cash increase in the parent company’s investment in subsidiary of $74.6 million in 2016.