Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 26, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | PRINCIPAL FINANCIAL GROUP INC | |
Entity Central Index Key | 1,126,328 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 288,218,100 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Fixed maturities, available-for-sale (2017 and 2016 include $242.3 million and $232.5 million related to consolidated variable interest entities) | $ 56,989.1 | $ 54,846.1 |
Fixed maturities, trading (2017 and 2016 include $0.0 million and $82.4 million related to consolidated variable interest entities) | 278 | 398.4 |
Equity securities, available-for-sale | 114 | 98.9 |
Equity securities, trading (2017 and 2016 include $752.8 million and $721.9 million related to consolidated variable interest entities) | 1,506.3 | 1,413.4 |
Mortgage loans | 13,388.1 | 13,230.2 |
Real estate (2017 and 2016 include $314.4 million and $305.7 million related to consolidated variable interest entities) | 1,433.3 | 1,368.8 |
Policy loans | 819.6 | 823.8 |
Other investments (2017 and 2016 include $142.0 million and $89.8 million related to consolidated variable interest entities and $87.4 million and $86.2 million measured at fair value under the fair value option) | 3,283.6 | 3,655.9 |
Total investments | 77,812 | 75,835.5 |
Cash and cash equivalents | 1,534.7 | 2,719.6 |
Accrued investment income | 625.2 | 580.6 |
Premiums due and other receivables | 1,447 | 1,361.9 |
Deferred acquisition costs | 3,430.8 | 3,380.2 |
Property and equipment | 718.8 | 699 |
Goodwill | 1,032.9 | 1,020.8 |
Other intangibles | 1,322.6 | 1,325.3 |
Separate account assets (2017 and 2016 include $37,956.8 million and $35,844.1 million related to consolidated variable interest entities) | 146,374.7 | 139,832.6 |
Other assets | 1,197.3 | 1,258.8 |
Total assets | 235,496 | 228,014.3 |
Liabilities | ||
Contractholder funds (2017 and 2016 include $363.9 million and $358.7 million related to consolidated variable interest entities) | 38,074.1 | 37,953.6 |
Future policy benefits and claims | 29,690.5 | 29,000.7 |
Other policyholder funds | 922.7 | 890.4 |
Short-term debt | 59.5 | 51.4 |
Long-term debt | 3,126.2 | 3,125.7 |
Income taxes currently payable | 15 | 12.9 |
Deferred income taxes | 1,048.1 | 972.4 |
Separate account liabilities (2017 and 2016 include $37,956.8 million and $35,844.1 million related to consolidated variable interest entities) | 146,374.7 | 139,832.6 |
Other liabilities (2017 and 2016 include $261.5 million and $284.1 million related to consolidated variable interest entities, of which $0.0 million and $59.9 million are measured at fair value under the fair value option) | 5,405.2 | 5,783.3 |
Total liabilities | 224,716 | 217,623 |
Redeemable noncontrolling interest (2017 and 2016 include $57.6 million and $58.8 million related to consolidated variable interest entities) | 95.1 | 97.5 |
Stockholders' equity | ||
Common stock, par value $.01 per share - 2,500.0 million shares authorized, 471.9 million and 469.2 million shares issued, and 288.1 million and 287.7 million shares outstanding in 2017 and 2016 | 4.7 | 4.7 |
Additional paid-in capital | 9,780.5 | 9,686 |
Retained earnings (accumulated deficit) | 7,937.4 | 7,720.4 |
Accumulated other comprehensive income (loss) | (455.1) | (675.2) |
Treasury stock, at cost (183.8 million and 181.5 million shares in 2017 and 2016) | (6,651.4) | (6,508.6) |
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,616.1 | 10,227.3 |
Noncontrolling interest | 68.8 | 66.5 |
Total stockholders' equity | 10,684.9 | 10,293.8 |
Total liabilities and stockholders' equity | $ 235,496 | $ 228,014.3 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Position (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fixed maturities, available-for-sale | $ 56,989.1 | $ 54,846.1 |
Fixed maturities, trading | 278 | 398.4 |
Equity securities, trading | 1,506.3 | 1,413.4 |
Real estate | 1,433.3 | 1,368.8 |
Other investments | 3,283.6 | 3,655.9 |
Other investments measured at fair value under fair value option | 87.4 | 86.2 |
Separate account assets | 146,374.7 | 139,832.6 |
Contractholder funds | 38,074.1 | 37,953.6 |
Separate account liabilities | 146,374.7 | 139,832.6 |
Other liabilities | 5,405.2 | 5,783.3 |
Redeemable noncontrolling interest | $ 95.1 | $ 97.5 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 2,500 | 2,500 |
Common stock, issued (in shares) | 471.9 | 469.2 |
Common stock, outstanding (in shares) | 288.1 | 287.7 |
Treasury stock (in shares) | 183.8 | 181.5 |
Aggregate consolidated variable interest entities | ||
Fixed maturities, available-for-sale | $ 242.3 | $ 232.5 |
Fixed maturities, trading | 0 | 82.4 |
Equity securities, trading | 752.8 | 721.9 |
Real estate | 314.4 | 305.7 |
Other investments | 142 | 89.8 |
Separate account assets | 37,956.8 | 35,844.1 |
Contractholder funds | 363.9 | 358.7 |
Separate account liabilities | 37,956.8 | 35,844.1 |
Other liabilities | 261.5 | 284.1 |
Other liabilities measured at fair value under fair value option | 0 | 59.9 |
Redeemable noncontrolling interest | $ 57.6 | $ 58.8 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Premiums and other considerations | $ 1,248 | $ 1,282.4 |
Fees and other revenues | 940.6 | 855.9 |
Net investment income (loss) | 877.4 | 761.7 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 12.2 | 184.7 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (27.3) | (55.6) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1.5) | 7.5 |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Net realized capital gains (losses) | (16.6) | 136.6 |
Total revenues | 3,049.4 | 3,036.6 |
Expenses | ||
Benefits, claims and settlement expenses | 1,657.3 | 1,658.5 |
Dividends to policyholders | 34.9 | 38.8 |
Operating expenses | 943.2 | 899.5 |
Total expenses | 2,635.4 | 2,596.8 |
Income (loss) before income taxes | 414 | 439.8 |
Income taxes (benefits) | 60.4 | 70.6 |
Net income (loss) | 353.6 | 369.2 |
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Net income (loss) attributable to Principal Financial Group, Inc. | $ 348.9 | $ 368 |
Earnings per common share | ||
Basic earnings per common share (in dollars per share) | $ 1.21 | $ 1.26 |
Diluted earnings per common share (in dollars per share) | 1.19 | 1.25 |
Dividends declared per common share (in dollars per share) | $ 0.45 | $ 0.38 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements of Comprehensive Income | ||
Net income (loss) | $ 353.6 | $ 369.2 |
Other comprehensive income (loss), net: | ||
Net unrealized gains (losses) on available-for-sale securities | 163.9 | 404.4 |
Noncredit component of impairment losses on fixed maturities, available-for-sale | 0.7 | (4.2) |
Net unrealized gains (losses) on derivative instruments | (12.2) | 1.3 |
Foreign currency translation adjustment | 64.4 | 129.7 |
Net unrecognized postretirement benefit obligation | 4.3 | 8 |
Other comprehensive income (loss) | 221.1 | 539.2 |
Comprehensive income (loss) | 574.7 | 908.4 |
Comprehensive income (loss) attributable to noncontrolling interest | 5.7 | 4.7 |
Comprehensive income (loss) attributable to Principal Financial Group, Inc. | $ 569 | $ 903.7 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Treasury stock | Noncontrolling interest | Total | |
Balances at Dec. 31, 2015 | $ 4.7 | $ 9,544.8 | $ 6,875.9 | $ (882.5) | $ (6,231.3) | $ 65.8 | $ 9,377.4 | |
Increase (decrease) in stockholders' equity | ||||||||
Common stock issued | 10 | 10 | ||||||
Stock-based compensation and additional related tax benefits | 25.1 | (1.7) | 0.1 | 23.5 | ||||
Treasury stock acquired, common | (105.6) | (105.6) | ||||||
Dividends to common stockholders | (110.4) | (110.4) | ||||||
Distributions to noncontrolling interest | (0.8) | (0.8) | ||||||
Contributions from noncontrolling interest | 0.1 | 0.1 | ||||||
Purchase of subsidiary shares from noncontrolling interest | [1] | 15.1 | (9.3) | 5.8 | ||||
Adjustments to redemption amount of redeemable noncontrolling interest | 3.1 | 3.1 | ||||||
Net income (loss) | [1] | 368 | 1.4 | 369.4 | ||||
Other comprehensive income (loss) | [1] | 535.7 | 1.4 | 537.1 | ||||
Balances at Mar. 31, 2016 | 4.7 | 9,598.1 | 7,131.8 | (356.1) | (6,336.9) | 68 | 10,109.6 | |
Balances at Dec. 31, 2016 | 4.7 | 9,686 | 7,720.4 | (675.2) | (6,508.6) | 66.5 | 10,293.8 | |
Increase (decrease) in stockholders' equity | ||||||||
Common stock issued | 70.8 | 70.8 | ||||||
Stock-based compensation | 24.2 | (1.9) | 0.1 | 22.4 | ||||
Treasury stock acquired, common | (142.8) | (142.8) | ||||||
Dividends to common stockholders | (130) | (130) | ||||||
Distributions to noncontrolling interest | (1) | (1) | ||||||
Contributions from noncontrolling interest | 0.9 | 0.9 | ||||||
Adjustments to redemption amount of redeemable noncontrolling interest | (0.5) | (0.5) | ||||||
Net income (loss) | [1] | 348.9 | 1.9 | 350.8 | ||||
Other comprehensive income (loss) | [1] | 220.1 | 0.4 | 220.5 | ||||
Balances at Mar. 31, 2017 | $ 4.7 | $ 9,780.5 | $ 7,937.4 | $ (455.1) | $ (6,651.4) | $ 68.8 | $ 10,684.9 | |
[1] | Excludes amounts attributable to redeemable noncontrolling interest. See Note 9, Stockholders’ Equity, for further details. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net income (loss) | $ 353.6 | $ 369.2 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Amortization of deferred acquisition costs | 52.3 | 99.6 |
Additions to deferred acquisition costs | (104.4) | (103.2) |
Accrued investment income | (44.6) | (34.7) |
Net cash flows for trading securities | 109 | (11.9) |
Premiums due and other receivables | (44.1) | 124.2 |
Contractholder and policyholder liabilities and dividends | 429.8 | 617.1 |
Current and deferred income taxes (benefits) | 50.3 | 57.1 |
Net realized capital (gains) losses | 16.6 | (136.6) |
Depreciation and amortization expense | 48.1 | 45.8 |
Real estate acquired through operating activities | (10.7) | (12.8) |
Real estate sold through operating activities | 0.4 | 0.1 |
Stock-based compensation | 22.1 | 22.3 |
Other | (355.5) | (140.7) |
Net adjustments | 169.3 | 526.3 |
Net cash provided by (used in) operating activities | 522.9 | 895.5 |
Investing activities | ||
Available-for-sale securities: Purchases | (4,307) | (3,558.6) |
Available-for-sale securities: Sales | 333.7 | 205.5 |
Available-for-sale securities: Maturities | 2,460.8 | 1,616 |
Mortgage loans acquired or originated | (473.8) | (475.9) |
Mortgage loans sold or repaid | 329.3 | 479.3 |
Real estate acquired | (90.8) | (44.5) |
Real estate sold | 47.1 | 15 |
Net (purchases) sales of property and equipment | (43.8) | (44.2) |
Net change in other investments | (86.5) | (45.9) |
Net cash provided by (used in) investing activities | (1,831) | (1,853.3) |
Financing activities | ||
Issuance of common stock | 70.8 | 10 |
Acquisition of treasury stock | (142.8) | (105.6) |
Proceeds from financing element derivatives | 0.1 | |
Payments for financing element derivatives | (20.9) | (21.3) |
Excess tax benefits from share-based payment arrangements | 5 | |
Purchase of subsidiary shares from noncontrolling interest | (2.3) | |
Dividends to common stockholders | (130) | (110.4) |
Issuance of long-term debt | 3.2 | |
Net proceeds from (repayments of) short-term borrowings | 7.6 | (59.9) |
Investment contract deposits | 2,629.1 | 3,976.3 |
Investment contract withdrawals | (2,303.9) | (3,166.3) |
Net increase (decrease) in banking operation deposits | 6.8 | 4 |
Other | 6.4 | 3.2 |
Net cash provided by (used in) financing activities | 123.2 | 535.9 |
Net increase (decrease) in cash and cash equivalents | (1,184.9) | (421.9) |
Cash and cash equivalents at beginning of period | 2,719.6 | 2,564.8 |
Cash and cash equivalents at end of period | $ 1,534.7 | $ 2,142.9 |
Nature of Operations and Signif
Nature of Operations and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Nature of Operations and Significant Accounting Policies | |
Nature of Operations and Significant Accounting Policies | 1. Nature of Operations and Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of Principal Financial Group, Inc. (“PFG”) have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017, are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. These interim unaudited consolidated financial statements should be read in conjunction with our annual audited financial statements as of December 31, 2016, included in our Form 10-K for the year ended December 31, 2016, filed with the United States Securities and Exchange Commission (“SEC”). The accompanying consolidated statement of financial position as of December 31, 2016, has been derived from the audited consolidated statement of financial position but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Consolidation We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a variable interest entity (“VIE”) or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 2, Variable Interest Entities. If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have significant management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. Recent Accounting Pronouncements Description Date of Effect on our consolidated Standards not yet adopted: Goodwill impairment testing This authoritative guidance simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 (which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the goodwill impairment test. A goodwill impairment loss will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Early adoption is permitted. January 1, 2020 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Credit losses This authoritative guidance requires entities to use a current expected credit loss (“CECL”) model to measure impairment for most financial assets that are not recorded at fair value through net income. Under the CECL model, an entity will estimate lifetime expected credit losses considering available relevant information about historical events, current conditions and reasonable and supportable forecasts. The CECL model does not apply to available-for-sale debt securities. This guidance also expands the required credit loss disclosures and will be applied using a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. January 1, 2020 We are currently evaluating the impact this guidance will have on our consolidated financial statements. We believe estimated credit losses under the CECL model will generally result in earlier loss recognition for loans and other receivables. Premium amortization on purchased callable debt securities This authoritative guidance applies to entities that hold certain non-contingently callable debt securities, where the amortized cost basis is at a premium to the price repayable by the issuer at the earliest call date. Under the guidance the premium will be amortized to the first call date. This guidance requires adoption through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. January 1, 2019 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Leases This authoritative guidance requires lessee recognition of lease assets and lease liabilities on the balance sheet. The concept of an operating lease, where the lease assets and liabilities are off balance sheet, is eliminated under the new guidance. For lessors, the guidance modifies lease classification criteria and accounting for certain types of leases. Other key aspects of the guidance relate to the removal of the current real estate-specific guidance and new presentation and disclosure requirements. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes certain optional practical expedients that may be elected. Early adoption is permitted. January 1, 2019 We have primarily focused our implementation efforts on identifying our leases that are within the scope of the guidance and will be added to our balance sheet. We are currently evaluating other impacts this guidance will have on our consolidated financial statements. Nonfinancial asset derecognition and partial sales of nonfinancial assets This authoritative guidance clarifies the scope of the recently established guidance on nonfinancial asset derecognition and the accounting for partial sales of nonfinancial assets. The guidance conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue recognition standard. January 1, 2018 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Presentation of net periodic pension cost and net periodic postretirement benefit cost This authoritative guidance requires that an employer disaggregate the service cost component from the other components of net benefit cost. The guidance also provides explicit guidance on the presentation of the service cost component and the other components of net benefit cost in the income statement and allows only the service cost component of net benefit cost to be eligible for capitalization. January 1, 2018 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Definition of a business This authoritative guidance clarifies the definition of a business to assist with evaluating when transactions involving an integrated set of assets and activities (a “set”) should be accounted for as acquisitions or disposals of assets or businesses. The guidance requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The guidance also requires a set to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output to be considered a business. Lastly, the guidance removes the evaluation of whether a market participant could replace missing elements and narrows the definition of outputs by more closely aligning it with how outputs are described in the revenue recognition guidance. The guidance will be applied prospectively. Early application is permitted in certain circumstances. January 1, 2018 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Financial instruments - recognition and measurement This authoritative guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The primary focus of this guidance is to supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. This guidance requires adoption through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. January 1, 2018 As of March 31, 2017, we did not hold material equity securities accounted for at fair value through other comprehensive income that will be accounted for at fair value through net income under the updated guidance. We continue to evaluate the impact of this standard; however, this change is not expected to have a material impact on our consolidated financial statements. Revenue recognition This authoritative guidance replaces all general and most industry specific revenue recognition guidance (excluding insurance) currently prescribed by U.S. GAAP. The core principle is that an entity recognizes revenue to reflect the transfer of a promised good or service to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for that good or service. This guidance also provides clarification on when an entity is a principal or an agent in a transaction. In addition, the guidance updates the accounting for certain costs associated with obtaining and fulfilling a customer contract. The guidance may be applied using one of the following two methods: (1) retrospectively to each prior reporting period presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. January 1, 2018 Only a portion of our total revenues, less than 20%, are subject to this guidance as it does not apply to revenue on contracts accounted for under the financial instruments or insurance contracts standards. Our evaluation process is ongoing and includes, but is not limited to, identifying contracts within the scope of the guidance, reviewing and documenting our accounting for these contracts, identifying and determining the accounting for any related contract costs, and preparing the required financial statement disclosures. To date, the impacts we have identified primarily relate to deferring and amortizing certain sales compensation related to obtaining customer contracts. We have not identified material changes in the timing of our revenue recognition. We plan to adopt the guidance on January 1, 2018, using the modified retrospective application; however, we continue to evaluate the impact of the standard and our adoption method is subject to change. Income tax - intra-entity transfers of assets This authoritative guidance requires entities to recognize current and deferred income tax resulting from an intra-entity asset transfer when the transfer occurs. Prior to issuance of this guidance, U.S. GAAP did not allow recognition of income tax consequences until the asset had been sold to a third party. This guidance requires adoption through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption with early adoption permitted. January 1, 2018 We are currently evaluating the impact this guidance will have on our consolidated financial statements. Standards adopted: Employee share-based payment accounting This authoritative guidance changes certain aspects of accounting for and reporting share-based payments to employees including changes related to the income tax effects of share-based payments, tax withholding requirements and accounting for forfeitures. Various transition methods will apply depending on the situation being addressed. January 1, 2017 The guidance was adopted prospectively as indicated by the guidance for each area of change and did not have a material impact on our consolidated financial statements. Short-duration insurance contracts This authoritative guidance requires additional disclosures related to short-duration insurance contracts. December 31, 2016 The disclosure requirements of this guidance were adopted retrospectively. Net asset value per share as a practical expedient for fair value This authoritative guidance removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. January 1, 2016 The guidance was adopted retrospectively and did not have a material impact on our consolidated financial statements. See Note 10, Fair Value Measurements, for further details. Simplifying the presentation of debt issuance costs This authoritative guidance requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. January 1, 2016 The guidance was adopted retrospectively and did not have a material impact on our consolidated financial statements. Consolidations This authoritative guidance makes changes to both the variable interest and voting interest consolidation models and eliminates the investment company deferral for portions of the variable interest model. The amendments in the standard impact the consolidation analysis for interests in investment companies and limited partnerships and similar entities. January 1, 2016 The guidance was adopted using the modified retrospective approach. See Note 2, Variable Interest Entities, for further details. When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Each of the standards listed above is in varying stages in our implementation process based on its issuance and adoption dates. We are on track to implement guidance by the respective effective dates. Derivatives Over-The-Counter Derivatives Cleared on Chicago Mercantile Exchange We use certain over-the-counter (“OTC”) interest rate contracts that are subject to derivative clearing agreements. These agreements require the daily cash settlement of variation margin based on changes in the fair value of the derivative instrument. Prior to 2017, variation margin for all such interest rate contracts was treated as collateral, which was accounted for separately as an interest-bearing asset or liability. For reporting purposes, we did not offset fair value amounts recognized for the right to reclaim variation margin collateral or the obligation to return variation margin collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements. Effective January 2017, the Chicago Mercantile Exchange (“CME”) rulebook was amended to legally characterize variation margin payments for cleared OTC derivatives as settlements of the derivative exposure rather than collateral against the derivative exposure. The economic cash flows exchanged do not change and therefore hedge accounting is unchanged; however, the variation margin and derivative instrument are considered a single unit of account for accounting and presentation purposes. As settlements, variation margin receipts and payments are considered cash flows of the derivative and reduce the recognized asset or liability arising from the derivative’s mark-to-market for balance sheet presentation, effectively resulting in the derivative having a fair value that approximates zero. As of December 31, 2016, our consolidated statements of financial position included $528.0 million in other investments and $527.7 million in other liabilities related to OTC interest rate contracts cleared with the CME. The balance of those line items was reduced by those amounts in January 2017 as a result of the CME rulebook amendment. The rulebook amendment did not have an impact on net income. Additionally, the change by the CME did not impact the accounting for our OTC derivatives not cleared with the CME. Separate Accounts The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. Separate account assets and separate account liabilities include certain international retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements. We have determined that summary totals are the most meaningful presentation for these funds. As of March 31, 2017 and December 31, 2016, the separate accounts included a separate account valued at $166.9 million and $158.4 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability to eligible participants of the qualified plan. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2017 | |
Variable Interest Entities | |
Variable Interest Entities | 2. Variable Interest Entities We have relationships with various types of entities which may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Consolidation” for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended March 31, 2017 and December 31, 2016. Consolidated Variable Interest Entities Grantor Trusts We contributed undated subordinated floating rate notes to three grantor trusts. The trusts separated their cash flows by issuing an interest-only certificate and a residual certificate related to each note contributed. Each interest-only certificate entitles the holder to interest on the stated note for a specified term, while the residual certificate entitles the holder to interest payments subsequent to the term of the interest-only certificate and to all principal payments. We retained the interest-only certificates and the residual certificates were subsequently sold to third parties. We determined these grantor trusts are VIEs due to insufficient equity to sustain them. We determined we are the primary beneficiary as a result of our contribution of securities into the trusts and our significant continuing interest in the trusts. Collateralized Private Investment Vehicles We invest in cash and synthetic collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities (collectively known as “collateralized private investment vehicles”). The performance of the notes of these synthetic structures is primarily linked to a synthetic portfolio by derivatives; each note has a specific loss attachment and detachment point. The notes and related derivatives are collateralized by a pool of permitted investments. The investments are held by a trustee and can only be liquidated to settle obligations of the trusts. These obligations primarily include derivatives and the notes due at maturity or termination of the trusts. We determined we were the primary beneficiary for one of these synthetic entities because we acted as the investment manager of the underlying portfolio and we had the power to make decisions and to receive benefits and the obligation to absorb losses that could be potentially significant to the VIE. This synthetic entity matured in the first quarter of 2017. Commercial Mortgage-Backed Securities We sold commercial mortgage loans to a real estate mortgage investment conduit trust. The trust issued various commercial mortgage-backed securities (“CMBS”) certificates using the cash flows of the underlying commercial mortgages it purchased. This is considered a VIE due to insufficient equity to sustain itself. We determined we are the primary beneficiary as we retained the special servicing role for the assets within the trust as well as the ownership of the bond class that controls the unilateral kick-out rights of the special servicer. Mandatory Retirement Savings Funds We hold an equity interest in Chilean mandatory privatized social security funds in which we provide asset management services. We determined the mandatory privatized social security funds, which also include contributions for voluntary pension savings, voluntary non-pension savings and compensation savings accounts, are VIEs. This is because the equity holders as a group lack the power, due to voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance and also because equity investors are protected from below-average market investment returns relative to the industry’s return, due to a regulatory guarantee that we provide. Further we concluded we are the primary beneficiary through our power to make decisions and our significant variable interest in the funds. The purpose of the funds, which reside in legally segregated entities, is to provide long-term retirement savings. The obligation to the customer is directly related to the assets held in the funds and, as such, we present the assets as separate account assets and the obligation as separate account liabilities within our consolidated statements of financial position. Principal International Hong Kong offers retirement pension schemes in which we provide trustee, administration and asset management services to employers and employees under the Hong Kong Mandatory Provident Fund (“MPF”) and Occupational Retirement Schemes Ordinance (“ORSO”) pension schemes. Each pension scheme has various guaranteed and non-guaranteed constituent funds, or investment options, in which customers can invest their money. The guaranteed funds provide either a guaranteed rate of return to the customer or a minimum guarantee on withdrawals under certain qualifying events. We determined the guaranteed funds are VIEs due to the fact the equity holders, as a group, lack the obligation to absorb expected losses due to the guarantee we provide. We concluded we are the primary beneficiary because we have the power to make decisions and to receive benefits and the obligation to absorb losses that could be potentially significant to the VIE. Therefore, we consolidate the underlying assets and liabilities of the funds and present as separate accounts or within the general account, depending on the terms of the guarantee. Real Estate We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate. Sponsored Investment Funds We sponsor and invest in certain investment funds for which we provide asset management services. Although our asset management fee is commensurate with the services provided and consistent with fees for similar services negotiated at arms-length, we have a variable interest for funds where our other interests are more than insignificant. The funds are VIEs as the equity holders lack power through voting rights to direct the activities of the entity that most significantly impact its economic performance. We determined we are the primary beneficiary of the VIEs where our interest in the entity is more than insignificant and we are the asset manager. Assets and Liabilities of Consolidated Variable Interest Entities The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse were as follows: March 31, 2017 December 31, 2016 Total Total Total Total assets liabilities assets liabilities (in millions) Grantor trusts (1) $ $ $ $ Collateralized private investment vehicle (2) — — CMBS — — Mandatory retirement savings funds (3) Real estate (4) Sponsored investment funds (5) Total $ $ $ $ (1) The assets of grantor trusts are primarily fixed maturities, available-for-sale. The liabilities are primarily other liabilities that reflect an embedded derivative of the forecasted transaction to deliver the underlying securities. (2) The assets of the collateralized private investment vehicle were primarily fixed maturities, trading. The liabilities included derivative liabilities and an obligation to redeem notes at maturity or termination of the trusts, which were reported in other liabilities. (3) The assets of the mandatory retirement savings funds include separate account assets and equity securities, trading. The liabilities include separate account liabilities and contractholder funds. (4) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (5) The assets of sponsored investment funds are primarily fixed maturities and equity securities, which are reported in other investments, and cash. The consolidated statements of financial position included a $57.6 million and $58.8 million redeemable noncontrolling interest for sponsored investment funds as of March 31, 2017 and December 31, 2016, respectively. Unconsolidated Variable Interest Entities Invested Securities We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading; equity securities, trading and other investments in the consolidated statements of financial position and are described below. Unconsolidated VIEs include certain CMBS, residential mortgage-backed pass-through securities (“RMBS”) and other asset-backed securities (“ABS”). All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function. As previously discussed, we invest in several types of collateralized private investment vehicles that are VIEs. These include cash and synthetic structures that we do not manage. We have determined we are not the primary beneficiary of these collateralized private investment vehicles primarily because we do not control the economic performance of the entities and were not involved with the design of the entities. We have invested in various VIE trusts as a debt holder. All of these entities are classified as VIEs due to insufficient equity to sustain them. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities. We have invested in partnerships and other funds, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities. As previously discussed, we sponsor and invest in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds. We hold an equity interest in Mexican mandatory privatized social security funds in which we provide asset management services. Our equity interest in the funds is considered a variable interest. We concluded the funds are VIEs because the equity holders as a group lack decision-making ability through their voting rights. We are not the primary beneficiary of the VIEs because although we, as the asset manager, have the power to direct the activities of the VIEs, we do not have a potentially significant variable interest in the funds. The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows: Maximum exposure to Asset carrying value loss (1) (in millions) March 31, 2017 Fixed maturities, available-for-sale: Corporate $ $ Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Fixed maturities, trading: Residential mortgage-backed pass-through securities Equity securities, trading Other investments: Other limited partnership and fund interests December 31, 2016 Fixed maturities, available-for-sale: Corporate $ $ Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Fixed maturities, trading: Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Equity securities, trading Other investments: Other limited partnership and fund interests (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities, trading. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees for our other investments. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager. Money Market Funds We are the investment manager for certain money market mutual funds. These funds are exempt from assessment under any consolidation model due to a scope exception for money market funds registered under Rule 2a-7 of the Investment Company Act of 1940 or similar funds. As of March 31, 2017 and December 31, 2016, these funds held $0.7 billion and $0.8 billion in total assets, respectively. We have no contractual obligation to contribute to the funds; however, we provided support to these money market mutual funds through the waiver of fees and expense reimbursements. The amount of fees waived and expenses reimbursed was insignificant. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments | |
Investments | 3. Investments Fixed Maturities and Equity Securities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. We classify fixed maturities and equity securities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. See Note 10, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to available-for-sale securities, excluding those in fair value hedging relationships, are reflected in stockholders’ equity, net of adjustments associated with deferred acquisition costs (“DAC”) and related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Unrealized gains and losses related to hedged portions of available-for-sale securities in fair value hedging relationships and mark-to-market adjustments on certain trading securities are reflected in net realized capital gains (losses). Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income. The cost of fixed maturities is adjusted for amortization of premiums and accrual of discounts, both computed using the interest method. The cost of fixed maturities and equity securities classified as available-for-sale is adjusted for declines in value that are other than temporary. Impairments in value deemed to be other than temporary are primarily reported in net income as a component of net realized capital gains (losses), with noncredit impairment losses for certain fixed maturities, available-for-sale reported in other comprehensive income (“OCI”). For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows. The amortized cost, gross unrealized gains and losses, other-than-temporary impairments in accumulated other comprehensive income (“AOCI”) and fair value of fixed maturities and equity securities available-for-sale were as follows: Other-than- Gross Gross temporary Amortized unrealized unrealized impairments in cost gains losses Fair value AOCI (1) (in millions) March 31, 2017 Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ — Non-U.S. governments — States and political subdivisions Corporate Residential mortgage-backed pass-through securities — Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ December 31, 2016 Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ — Non-U.S. governments — States and political subdivisions Corporate Residential mortgage-backed pass-through securities — Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ (1) Excludes $126.3 million and $120.9 million as of March 31, 2017 and December 31, 2016 , respectively, of net unrealized gains on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date, which are included in gross unrealized gains and gross unrealized losses. The amortized cost and fair value of fixed maturities available-for-sale as of March 31, 2017, by expected maturity, were as follows: Amortized cost Fair value (in millions) Due in one year or less $ $ Due after one year through five years Due after five years through ten years Due after ten years Subtotal Mortgage-backed and other asset-backed securities Total $ $ Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is diversified by industry, issuer and asset class. Credit concentrations are managed to established limits. Net Realized Capital Gains and Losses Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses): other-than-temporary impairments of securities and subsequent realized recoveries, mark-to-market adjustments on certain trading securities, mark-to-market adjustments on sponsored investment funds, fair value hedge and cash flow hedge ineffectiveness, mark-to-market adjustments on derivatives not designated as hedges, changes in the mortgage loan valuation allowance provision, impairments of real estate held for investment and impairments on equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses). The major components of net realized capital gains (losses) on investments were as follows: For the three months ended March 31, 2017 2016 (in millions) Fixed maturities, available-for-sale: Gross gains $ $ Gross losses Net impairment losses Hedging, net Fixed maturities, trading Equity securities, trading Mortgage loans Derivatives Other Net realized capital gains (losses) $ $ Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $361.3 million and $205.8 million for the three months ended March 31, 2017 and 2016, respectively. Other-Than-Temporary Impairments We have a process in place to identify fixed maturity and equity securities that could potentially have an impairment that is other than temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions and other similar factors. This process also involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Each reporting period, all securities are reviewed to determine whether an other-than-temporary decline in value exists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events; (4) for structured securities, the adequacy of the expected cash flows; (5) for fixed maturities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity and (6) for equity securities, our ability and intent to hold the security for a period of time that allows for the recovery in value. To the extent we determine a security is deemed to be other than temporarily impaired, an impairment loss is recognized. Impairment losses on equity securities are recognized in net income and are measured as the difference between amortized cost and fair value. The way in which impairment losses on fixed maturities are recognized in the financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, we recognize an other-than-temporary impairment in net income for the difference between amortized cost and fair value. If we do not expect to recover the amortized cost basis, we do not plan to sell the security and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net income and the noncredit loss portion in OCI (“bifurcated OTTI”). Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities, were as follows: For the three months ended March 31, 2017 2016 (in millions) Fixed maturities, available-for-sale $ $ Equity securities, available-for-sale — — Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) OCI (1) Net impairment losses on available-for-sale securities $ $ (1) Represents the net impact of (a) gains resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI and (b) losses resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold. We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The ABS cash flow estimates are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate security cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and circumstances including timing, security interests and loss severity. The following table provides a rollforward of accumulated credit losses for fixed maturities with bifurcated credit losses. The purpose of the table is to provide detail of (1) additions to the bifurcated credit loss amounts recognized in net realized capital gains (losses) during the period and (2) decrements for previously recognized bifurcated credit losses where the loss is no longer bifurcated and/or there has been a positive change in expected cash flows or accretion of the bifurcated credit loss amount. For the three months ended March 31, 2017 2016 (in millions) Beginning balance $ $ Credit losses for which an other-than-temporary impairment was not previously recognized Credit losses for which an other-than-temporary impairment was previously recognized Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold Net reduction (increase) for positive changes in cash flows expected to be collected and amortization (1) Foreign currency translation adjustment Ending balance $ $ (1) Amounts are recognized in net investment income. Gross Unrealized Losses for Fixed Maturities and Equity Securities For fixed maturities and equity securities available-for-sale with unrealized losses, including other-than-temporary impairment losses reported in OCI, the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows: March 31, 2017 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ $ Non-U.S. governments States and political subdivisions Corporate Residential mortgage-backed pass- through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ $ Total equity securities, available-for-sale $ — $ $ $ $ $ Of the total amounts, Principal Life Insurance Company’s (“Principal Life’s”) consolidated portfolio represented $15,385.4 million in available-for-sale fixed maturities with gross unrealized losses of $461.1 million. Of those fixed maturity securities in Principal Life’s consolidated portfolio with a gross unrealized loss position, 94% were investment grade (rated AAA through BBB-) with an average price of 97 (carrying value/amortized cost) as of March 31, 2017. Gross unrealized losses in our fixed maturities portfolio decreased during the three months ended March 31, 2017, primarily due to tightening of credit spreads and a decrease in interest rates. For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 1,686 securities with a carrying value of $13,316.1 million and unrealized losses of $316.5 million reflecting an average price of 98 as of March 31, 2017. Of this portfolio, 97% was investment grade (rated AAA through BBB-) as of March 31, 2017, with associated unrealized losses of $308.8 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 408 securities with a carrying value of $2,069.3 million and unrealized losses of $144.6 million. The average credit rating of this portfolio was A- with an average price of 93 as of March 31, 2017. Of the $144.6 million in unrealized losses, the corporate sector accounts for $68.0 million in unrealized losses with an average price of 93 and an average credit rating of BB+. The remaining unrealized losses consist primarily of $36.6 million within the commercial mortgage-backed securities sector with an average price of 94 and an average credit rating of AA. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be maturity, we did not consider these investments to be other-than-temporarily impaired as of March 31, 2017. December 31, 2016 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ — $ $ Non-U.S. governments States and political subdivisions Corporate Residential mortgage-backed pass- through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ $ $ Of the total amounts, Principal Life’s consolidated portfolio represented $16,918.9 million in available-for-sale fixed maturities with gross unrealized losses of $615.1 million. Of those fixed maturity securities in Principal Life’s consolidated portfolio with a gross unrealized loss position, 94% were investment grade (rated AAA through BBB-) with an average price of 96 (carrying value/amortized cost) as of December 31, 2016. Gross unrealized losses in our fixed maturities portfolio decreased during the year ended December 31, 2016, primarily due to tightening of credit spreads, partially offset by an increase in interest rates. For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 1,911 securities with a carrying value of $14,549.4 million and unrealized losses of $384.6 million reflecting an average price of 97 as of December 31, 2016. Of this portfolio, 98% was investment grade (rated AAA through BBB-) as of December 31, 2016, with associated unrealized losses of $374.1 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 453 securities with a carrying value of $2,369.5 million and unrealized losses of $230.5 million. The average credit rating of this portfolio was A- with an average price of 91 as of December 31, 2016. Of the $230.5 million in unrealized losses, the corporate sector accounts for $141.9 million in unrealized losses with an average price of 89 and an average credit rating of BBB-. The remaining unrealized losses consist primarily of $46.9 million within the commercial mortgage-backed securities sector with an average price of 93 and an average credit rating of AA-. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be maturity, we did not consider these investments to be other-than-temporarily impaired as of December 31, 2016. Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments The net unrealized gains and losses on investments in available-for-sale securities, the noncredit component of impairment losses on fixed maturities available-for-sale and the net unrealized gains and losses on derivative instruments in cash flow hedge relationships are reported as separate components of stockholders’ equity. The cumulative amount of net unrealized gains and losses on available-for-sale securities and derivative instruments in cash flow hedge relationships net of adjustments related to DAC and related actuarial balances and applicable income taxes was as follows: March 31, 2017 December 31, 2016 (in millions) Net unrealized gains on fixed maturities, available-for-sale (1) $ $ Noncredit component of impairment losses on fixed maturities, available-for-sale Net unrealized losses on equity securities, available-for-sale Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on derivative instruments Net unrealized gains on equity method subsidiaries and noncontrolling interest adjustments Provision for deferred income taxes Net unrealized gains on available-for-sale securities and derivative instruments $ $ (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. Mortgage Loans Mortgage loans consist of commercial and residential mortgage loans. We evaluate risks inherent in our commercial mortgage loans in two classes: (1) brick and mortar property loans, including mezzanine loans, where we analyze the property’s rent payments as support for the loan, and (2) credit tenant loans (“CTL”), where we rely on the credit analysis of the tenant for the repayment of the loan. We evaluate risks inherent in our residential mortgage loan portfolio in two classes: (1) home equity mortgages and (2) first lien mortgages. The carrying amount of our mortgage loan portfolio was as follows: March 31, 2017 December 31, 2016 (in millions) Commercial mortgage loans $ $ Residential mortgage loans Total amortized cost Valuation allowance Total carrying value $ $ We periodically purchase mortgage loans as well as sell mortgage loans we have originated. Mortgage loans purchased and sold were as follows: For the three months ended March 31, 2017 2016 (in millions) Commercial mortgage loans: Purchased $ $ Residential mortgage loans: Purchased Sold Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our commercial mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows: March 31, 2017 December 31, 2016 Amortized Percent Amortized Percent cost of total cost of total ($ in millions) Geographic distribution New England $ % $ % Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific International Total $ % $ % Property type distribution Office $ % $ % Retail Industrial Apartments Hotel Mixed use/other Total $ % $ % Our residential mortgage loan portfolio is composed of home equity mortgages with an amortized cost of $152.3 million and $165.6 million and first lien mortgages with an amortized cost of $1,115.3 million and $1,054.3 million as of March 31, 2017 and December 31, 2016, respectively. Our residential home equity mortgages are concentrated in the United States and are generally second lien mortgages comprised of closed-end loans and lines of credit. Our first lien loans are concentrated in Chile and the United States. Mortgage Loan Credit Monitoring Commercial Credit Risk Profile Based on Internal Rating We actively monitor and manage our commercial mortgage loan portfolio. All commercial mortgage loans are analyzed regularly and substantially all are internally rated, based on a proprietary risk rating cash flow model, in order to monitor the financial quality of these assets. The model stresses expected cash flows at various levels and at different points in time depending on the durability of the income stream, which includes our assessment of factors such as location (macro and micro markets), tenant quality and lease expirations. Our internal rating analysis presents expected losses in terms of an S&P Global (“S&P”) bond equivalent rating. As the credit risk for commercial mortgage loans increases, we adjust our internal ratings downward with loans in the category “B+ and below” having the highest risk for credit loss. Internal ratings on commercial mortgage loans are updated at least annually and potentially more often for certain loans with material changes in collateral value or occupancy and for loans on an internal “watch list”. Commercial mortgage loans that require more frequent and detailed attention than other loans in our portfolio are identified and placed on an internal “watch list”. Among the criteria that would indicate a potential problem are significant negative changes in ratios of loan to value or contract rents to debt service, major tenant vacancies or bankruptcies, borrower sponsorship problems, late payments, delinquent taxes and loan relief/restructuring requests. The amortized cost of our commercial mortgage loan portfolio by credit risk, as determined by our internal rating system expressed in terms of an S&P bond equivalent rating, was as follows: March 31, 2017 Brick and mortar CTL Total (in millions) A- and above $ $ $ BBB+ thru BBB- BB+ thru BB- — B+ and below Total $ $ $ December 31, 2016 Brick and mortar CTL Total (in millions) A- and above $ $ $ BBB+ thru BBB- BB+ thru BB- — B+ and below Total $ $ $ Residential Credit Risk Profile Based on Performance Status Our residential mortgage loan portfolio is monitored based on performance of the loans. Monitoring on a residential mortgage loan increases when the loan is delinquent or earlier if there is an indication of potential impairment. We define non-performing residential mortgage loans as loans 90 days or greater delinquent or on non-accrual status. The amortized cost of our performing and non-performing residential mortgage loans was as follows: March 31, 2017 Home equity First liens Total (in millions) Performing $ $ $ Non-performing Total $ $ $ December 31, 2016 Home equity First liens Total (in millions) Performing $ $ $ Non-performing Total $ $ $ Non-Accrual Mortgage Loans Commercial and residential mortgage loans are placed on non-accrual status if we have concern regarding the collectability of future payments or if a loan has matured without being paid off or extended. Factors considered may include conversations with the borrower, loss of major tenant, bankruptcy of borrower or major tenant, decreased property cash flow for commercial mortgage loans or number of days past due and other circumstances for residential mortgage loans. Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal or according to the contractual terms of the loan. When a loan is placed on non-accrual status, the accrued unpaid interest receivable is reversed against interest income. Accrual of interest resumes after factors resulting in doubts about collectability have improved. Residential first lien mortgages in the Chilean market are carried on accrual for a longer period of delinquency than domestic loans, as assessment of collectability is based on the nature of the loans and collection practices in that market. The amortized cost of mortgage loans on non-accrual status was as follows: March 31, 2017 December 31, 2016 (in millions) Residential: Home equity $ $ First liens Total $ $ The aging of our mortgage loans, based on amortized cost, was as follows: March 31, 2017 Recorded investment 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total loans accruing (in millions) Commercial-brick and mortar $ — $ — $ — $ — $ $ $ — Commercial-CTL — — — — — Residential-home equity — Residential-first liens Total $ $ $ $ $ $ $ December 31, 2016 Recorded investment 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total loans accruing (in millions) Commercial-brick and mortar $ — $ — $ — $ — $ $ $ — Commercial-CTL — — — — — Residential-home equity — Residential-first liens Total $ $ $ $ $ $ $ Mortgage Loan Valuation Allowance We establish a valuation allowance to provide for the risk of credit losses inherent in our portfolio. The valuation allowance includes loan specific reserves for loans that are deemed to be impaired as well as reserves for pools of loans with similar risk characteristics where a property risk or market specific risk has not been identified but for which we anticipate a loss may occur. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable we will be unable to collect all amounts due according to contractual terms of the loan agreement. When we determine a loan is impaired, a valuation allowance is established equal to the difference between the carrying amount of the mortgage loan and the estimated value reduced by the cost to sell. Estimated value is based on either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price or fair value of the collateral. Subsequent changes in the estimated value are reflected in the valuation allowance. Amounts on loans deemed to be uncollectible are charged off and removed from the valuation allowance. The change in the valuation allowance provision is included in net realized capital gains (losses) on our consolidated statements of operations. The valuation allowance is maintained at a level believed adequate by management to absorb estimated probable credit losses. Management’s periodic evaluation and assessment of the valuation allowance adequacy is based on known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, portfolio delinquency information, underwriting standards, peer group information, current economic conditions, loss experience and other relevant factors. The evaluation of our impaired loan component is subjective, as it requires the estimation of timing and amount of future cash flows expected to be received on impaired loans. We review our commercial mortgage loan portfolio and analyze the need for a valuation allowance for any loan that is delinquent for 60 days or more, in process of foreclosure, restructured, on the internal “watch list” or that currently has a valuation allowance. In addition to establishing allowance levels for specifically identified impaired commercial mortgage loans, management determines an allowance for all other loans in the portfolio for which historical experience and current economic conditions indicate certain losses exist. These loans are segregated by risk rating level with an estimated loss ratio applied against each risk rating level. The loss ratio is generally based upon historical loss experience for each risk rating level as adjusted for certain current environmental factors management believes to be relevant. For our residential mortgage loan portfolio, we separate the loans into several homogeneous pools, each of which consist of loans of a similar nature including but not limited to loans similar in collateral, term and structure and loan purpose or type. We evaluate loan pools based on aggregated risk ratings, estimated specific loss potential in the different classes of credits, and historical loss experience by pool type. We adjust these quantitative factors for qualitative factors of present conditions. Qualitative factors include items such as economic and business conditions, changes in the portfolio, value of underlying collateral and concentrations. Residential mortgage loan pools exclude loans that have been restructured or impaired, as those loans are evaluated individually. A rollforward of our valuation allowance and ending balances of the allowance and loan balance by basis of impairment method was as follows: Commercial Residential Total (in millions) For the three months ended March 31, 2017 Beginning balance $ $ $ Provision — Charge-offs — Recoveries — Ending balance $ $ $ Allowance ending balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Allowance ending balance $ $ $ Loan balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Loan ending balance $ $ $ For the three months ended March 31, 2016 Beginning balance $ $ $ Provision Charge-offs — Recoveries — Ending balance $ $ $ Allowance ending balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Allowance ending balance $ $ $ Loan balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Loan ending balance $ $ $ Impaired Mortgage Loans Impaired mortgage loans are loans with a related specific valuation allowance, loans whose carrying amount has been reduced to the expected collectible amount because the impairment has been considered other than temporary or a loan modification has been classified as a troubled debt restructuring (“TDR”). Based on an assessment as to the collectability of the principal, a determination is made to apply any payments received either against the principal or according to the contractual terms of the loan. Our recorded investment in and unpaid principal balance of impaired loans along with the related loan specific allowance for |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 4. Derivative Financial Instruments Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies. Types of Derivative Instruments Interest Rate Contracts Interest rate risk is the risk we will incur economic losses due to adverse changes in interest rates. Sources of interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to manage our exposure to fluctuations in interest rates. Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts based upon designated market rates or rate indices and an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by any party. Cash is paid or received based on the terms of the swap. We use interest rate swaps primarily to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) liability. The GMWB rider on our variable annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity and/or fixed income funds available with the product. Interest rate options, including interest rate caps and interest rate floors, which can be combined to form interest rate collars, are contracts that entitle the purchaser to pay or receive the amounts, if any, by which a specified market rate exceeds a cap strike interest rate, or falls below a floor strike interest rate, respectively, at specified dates. We use interest rate collars to manage interest rate risk related to guaranteed minimum interest rate liabilities in our individual annuities contracts and lapse risk associated with higher interest rates. A swaption is an option to enter into an interest rate swap at a future date. We purchase swaptions to offset or modify existing exposures. Swaptions provide us the benefit of the agreed-upon strike rate if the market rates for liabilities are higher, with the flexibility to enter into the current market rate swap if the market rates for liabilities are lower. Swaptions not only hedge against the downside risk, but also allow us to take advantage of any upside benefits. In exchange-traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. We enter into exchange-traded futures with regulated futures commissions merchants who are members of a trading exchange. We have used exchange-traded futures to reduce market risks from changes in interest rates and to alter mismatches between the assets in a portfolio and the liabilities supported by those assets. Foreign Exchange Contracts Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements we issue, foreign currency-denominated fixed maturity and equity securities we invest in, capital transactions with our international operations and the financial results of our international operations. We use various derivatives to manage our exposure to fluctuations in foreign currency exchange rates. Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to-fixed rate; however, they may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. Currency forwards are contracts in which we agree with other parties to deliver or receive a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. We use currency forwards to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. We sometimes use currency forwards to hedge the currency risk associated with a business combination or to hedge certain net equity investments in or expected cash flows from our foreign operations. Currency options are contracts that give the holder the right, but not the obligation to buy or sell a specified amount of the identified currency within a limited period of time at a contracted price. The contracts are net settled in cash, based on the differential in the current foreign exchange rate and the strike price. Purchased and sold options can be combined to form a foreign currency collar where we receive a payment if the foreign exchange rate is below the purchased option strike price and make a payment if the foreign exchange rate is above the sold option strike price. We use currency options to hedge expected cash flows from our foreign operations. Equity Contracts Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock prices. We use various derivatives to manage our exposure to equity risk, which arises from products in which the interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees. We purchase equity call spreads to hedge the equity participation rates promised to contractholders in conjunction with our fixed deferred annuity and universal life products that credit interest based on changes in an external equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB liability related to the GMWB rider on our variable annuity product, as previously explained. The premium associated with certain options is paid quarterly over the life of the option contract. Credit Contracts Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a referenced name’s credit spread at the time the agreement is executed. In cases where we sell protection, we also buy a quality cash bond to match against the credit default swap, thereby entering into a synthetic transaction replicating a cash security. When selling protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to the notional value of the credit default swap. Total return swaps are contracts in which we agree with other parties to exchange, at specified intervals, an amount determined by the difference between the previous price and the current price of a reference asset based upon an agreed upon notional principal amount plus an additional amount determined by the financing spread. We currently use futures traded on an exchange (“exchange-traded”) and total return swaps referencing equity indices to hedge our portfolio from potential credit losses related to systemic events. Other Contracts Embedded Derivatives. We purchase or issue certain financial instruments or products that contain a derivative instrument that is embedded in the financial instrument or product. When it is determined that the embedded derivative possesses economic characteristics that are not clearly or closely related to the economic characteristics of the host contract and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host instrument for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated statements of financial position, is carried at fair value. We had investment contracts in which the return was tied to a leveraged inflation index. We economically hedged the risk associated with these investment contracts. We offer group annuity contracts that have guaranteed separate accounts as an investment option. We also offer funds with embedded fixed-rate guarantees as investment options in our defined contribution plans in Hong Kong. We have structured investment relationships with trusts we have determined to be VIEs, which are consolidated in our financial statements. The notes issued by these trusts include obligations to deliver an underlying security to residual interest holders and the obligations contain an embedded derivative of the forecasted transaction to deliver the underlying security. We have fixed deferred annuities and universal life contracts that credit interest based on changes in an external equity index. We also have certain variable annuity products with a GMWB rider, which allows the customer to make withdrawals of a specified annual amount, either for a fixed number of years or for the lifetime of the customer, even if the account value is fully exhausted. Declines in the equity markets may increase our exposure to benefits under contracts with the GMWB. We economically hedge the exposure in these contracts, as previously explained. Exposure Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual amounts of these derivatives. We are also exposed to credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments. Derivatives may be exchange-traded or they may be privately negotiated contracts, which are usually referred to as OTC derivatives. Certain of our OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”), while others are bilateral contracts between two counterparties (“bilateral OTC”). Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included transactions. For reporting purposes, we do not offset fair value amounts of bilateral OTC derivatives for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements. OTC cleared derivatives have variation margin that is legally characterized as settlement of the derivative exposure, which reduces their fair value in the consolidated statements of financial position. We posted $192.2 million and $322.4 million in cash and securities under collateral arrangements as of March 31, 2017 and December 31, 2016, respectively, to satisfy collateral and initial margin requirements associated with our derivative credit support agreements and FCM agreements. Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from each of the major credit rating agencies on our debt. If the ratings on our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a liability position without regard to netting under derivative credit support annex agreements as of March 31, 2017 and December 31, 2016, was $279.8 million and $454.7 million, respectively. Cleared derivatives have contingent features that require us to post excess margin as required by the FCM. The terms surrounding excess margin vary by FCM agreement. With respect to derivatives containing collateral triggers, we posted collateral and initial margin of $192.2 million and $322.4 million as of March 31, 2017 and December 31, 2016, respectively, in the normal course of business, which reflects netting under derivative agreements. If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2017, we would be required to post an additional $41.8 million of collateral to our counterparties. As of March 31, 2017 and December 31, 2016, we had received $131.7 million and $576.3 million, respectively, of cash collateral associated with our derivative credit support annex agreements and FCM agreements, for which we recorded a corresponding liability reflecting our obligation to return the collateral. Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our derivative financial instruments by type were as follows: March 31, 2017 December 31, 2016 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ $ Interest rate options Interest rate futures Swaptions Foreign exchange contracts: Currency forwards Currency swaps Currency options — Equity contracts: Equity options Equity futures Credit contracts: Credit default swaps Total return swaps Futures Other contracts: Embedded derivatives Total notional amounts at end of period $ $ Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ $ Interest rate options Foreign exchange contracts: Currency swaps Currency forwards Currency options — Equity contracts: Equity options Credit contracts: Credit default swaps Total return swaps Total gross credit exposure Less: collateral received Net credit exposure $ $ The fair value of our derivative instruments classified as assets and liabilities was as follows: Derivative assets (1) Derivative liabilities (2) March 31, 2017 December 31, 2016 March 31, 2017 December 31, 2016 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ $ $ $ Foreign exchange contracts Total derivatives designated as hedging instruments $ $ $ $ Derivatives not designated as hedging instruments Interest rate contracts $ $ $ $ Foreign exchange contracts Equity contracts Credit contracts Other contracts — — Total derivatives not designated as hedging instruments Total derivative instruments $ $ $ $ (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of $119.6 million and $176.5 million as of March 31, 2017 and December 31, 2016, respectively, are reported with contractholder funds on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. The majority of our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps”). The remainder of our credit derivatives reference either a basket or index of securities. These instruments are either referenced in an OTC credit derivative transaction or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of March 31, 2017 and December 31, 2016, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. We purchased an investment structure with embedded credit features that is fully consolidated into our financial statements. This consolidation results in recognition of the underlying credit derivatives and collateral within the structure, typically high quality fixed maturities that are owned by a special purpose vehicle. These credit derivatives reference several names in a basket structure. In the event of default, the collateral within the structure would typically be liquidated to pay the claims of the credit derivative counterparty. The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above. March 31, 2017 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt AAA $ $ $ AA A BBB B CCC Government/municipalities AA Sovereign AA BBB Total single name credit default swaps Basket and index credit default swaps Government/municipalities AA Structured finance AAA — AA — Total basket and index credit default swaps Total credit default swap protection sold $ $ $ December 31, 2016 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt AAA $ $ $ AA A BBB B Near default Government/municipalities AA Sovereign AA BBB Total single name credit default swaps Basket and index credit default swaps Corporate debt Near default (1) Government/municipalities AA Structured finance AA — Total basket and index credit default swaps Total credit default swap protection sold $ $ $ (1) Includes $60.0 million as of December 31, 2016, notional of derivatives in consolidated collateralized private investment vehicle VIEs where the credit risk is borne by third party investors. We also have invested in fixed maturities classified as trading that contain credit default swaps. These securities are subject to the credit risk of the issuer, normally a special purpose vehicle, which consists of the underlying credit default swaps and high quality fixed maturities that serve as collateral. A default event occurs if the cumulative losses exceed a specified attachment point, which is typically not the first loss of the portfolio. If a default event occurs that exceeds the specified attachment point, our investment may not be fully returned. We would have no future potential payments under these investments. The following tables show, by the types of referenced/underlying asset class and external rating, our fixed maturities with embedded credit derivatives. March 31, 2017 Weighted average Amortized Carrying expected life cost value (in years) (in millions) Structured finance AA $ $ Total structured finance Total fixed maturities with credit derivatives $ $ December 31, 2016 Weighted average Amortized Carrying expected life cost value (in years) (in millions) Structured finance AA $ $ BBB BB CCC Total structured finance Total fixed maturities with credit derivatives $ $ Fair Value Hedges We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes. We enter into currency exchange swap agreements to convert certain foreign denominated assets and liabilities into U.S. dollar floating-rate denominated instruments to eliminate the exposure to future currency volatility on those items. The net interest effect of interest rate swap and currency swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. Hedge effectiveness testing for fair value relationships is performed utilizing a regression analysis approach for both prospective and retrospective evaluations. This regression analysis will consider multiple data points for the assessment that the hedge continues to be highly effective in achieving offsetting changes in fair value. In certain periods, the comparison of the change in value of the derivative and the change in the value of the hedged item may not be offsetting at a specific period in time due to small movements in value. However, any amounts recorded as fair value hedges have shown to be highly effective in achieving offsetting changes in fair value both for present and future periods. The following table shows the effect of derivatives in fair value hedging relationships and the related hedged items on the consolidated statements of operations. All gains or losses on derivatives were included in the assessment of hedge effectiveness. Amount of gain (loss) Amount of gain (loss) recognized in net income on recognized in net income on related hedged item for the derivatives for the three months three months ended Derivatives in fair value hedging ended March 31, (1) Hedged items in fair value March 31, (1) relationships 2017 2016 hedging relationships 2017 2016 (in millions) (in millions) Interest rate contracts $ $ Fixed maturities, available-for-sale $ $ Interest rate contracts Investment contracts Total $ $ Total $ $ (1) The gain (loss) on both derivatives and hedged items in fair value relationships is reported in net realized capital gains (losses) on the consolidated statements of operations. The net amount represents the ineffective portion of our fair value hedges. The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in fair value hedging relationships. Amount of gain (loss) for the three months ended March 31, Hedged item 2017 2016 (in millions) Fixed maturities, available-for-sale (1) $ $ Investment contracts (2) (1) Reported in net investment income on the consolidated statements of operations. (2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations. Cash Flow Hedges We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities and forecasted transactions. We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed-rate instruments to eliminate the exposure to future currency volatility on those items. The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 3.2 years. As of March 31, 2017, we had $11.8 million of net gains reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. During the three months ended March 31, 2017 and 2016, we did not have any reclassifications from AOCI into net realized capital gains (losses) as a result of the determination that hedged cash flows were probable of not occurring. The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of operations and consolidated statements of financial position. All gains or losses on derivatives were included in the assessment of hedge effectiveness. Amount of gain (loss) Amount of gain (loss) recognized in AOCI on reclassified from AOCI on derivatives (effective portion) Location of gain (loss) derivatives (effective portion) Derivatives in cash for the three months ended reclassified from AOCI for the three months ended flow hedging March 31, into net income March 31, relationships Related hedged item 2017 2016 (effective portion) 2017 2016 (in millions) (in millions) Interest rate contracts Fixed maturities, available-for-sale $ $ Net investment income $ $ Net realized capital losses — Interest rate contracts Investment contracts — Benefits, claims and settlement expenses — — Interest rate contracts Debt — — Operating expense Foreign exchange contracts Fixed maturities, available-for-sale Net realized capital gains Foreign exchange contracts Investment contracts — Benefits, claims and settlement expenses — — Total $ $ Total $ $ The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in cash flow hedging relationships. Amount of gain (loss) for the three months ended March 31, Hedged item 2017 2016 (in millions) Fixed maturities, available-for-sale (1) $ $ Investment contracts (2) (1) Reported in net investment income on the consolidated statements of operations. (2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations. The ineffective portion of our cash flow hedges is reported in net realized capital gains (losses) on the consolidated statements of operations. The net gain resulting from the ineffective portion of foreign currency contracts in cash flow hedging relationships was $0.0 million and $0.0 million for the three months ended March 31, 2017 and 2016, respectively. We expect to reclassify net gains of $15.7 million from AOCI into net income in the next 12 months, which includes both net deferred gains on discontinued hedges and net losses on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions. Derivatives Not Designated as Hedging Instruments Our use of futures, certain swaptions and swaps, collars, options and forwards are effective from an economic standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations. The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations. Amount of gain (loss) recognized in net income on derivatives for the three months ended March 31, Derivatives not designated as hedging instruments 2017 2016 (in millions) Interest rate contracts $ $ Foreign exchange contracts Equity contracts Credit contracts Other contracts Total $ $ |
Insurance Liabilities
Insurance Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Insurance Liabilities | |
Insurance Liabilities | 5. Insurance Liabilities Liability for Unpaid Claims The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows: For the three months ended March 31, 2017 2016 (in millions) Balance at beginning of period $ $ Less reinsurance recoverable Net balance at beginning of period Incurred: Current year Prior years Total incurred Payments: Current year Prior years Total payments Net balance at end of period Plus reinsurance recoverable Balance at end of period $ $ Amounts not included in the rollforward above: Claim adjustment expense liabilities $ $ Incurred liability adjustments relating to prior years, which affected current operations during 2017 and 2016, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | 6. Income Taxes Effective Income Tax Rate Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows: For the three months ended March 31, 2017 2016 U.S. corporate income tax rate 35 % 35 % Dividends received deduction Impact of equity method presentation Tax credits Merger of Brazilian legal entities — Other Effective income tax rate 15 % 16 % |
Employee and Agent Benefits
Employee and Agent Benefits | 3 Months Ended |
Mar. 31, 2017 | |
Employee and Agent Benefits | |
Employee and Agent Benefits | 7. Employee and Agent Benefits Components of Net Periodic Benefit Cost Other postretirement Pension benefits benefits For the three months ended For the three months ended March 31, March 31, 2017 2016 2017 2016 (in millions) Service cost $ $ $ — $ Interest cost Expected return on plan assets Amortization of prior service benefit Recognized net actuarial loss — Net periodic benefit cost (income) $ $ $ $ Contributions Our funding policy for our qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”) and, generally, not greater than the maximum amount that can be deducted for federal income tax purposes. It is too early to determine, but we do not anticipate that we will be required to fund a minimum required contribution under ERISA. Regardless, it is possible that we may fund the qualified and nonqualified pension plans in 2017 for a combined total of up to $125.0 million. During the three months ended March 31, 2017, we contributed $35.2 million to these plans. |
Contingencies, Guarantees and I
Contingencies, Guarantees and Indemnifications | 3 Months Ended |
Mar. 31, 2017 | |
Contingencies, Guarantees and Indemnifications | |
Contingencies, Guarantees and Indemnifications | 8. Contingencies, Guarantees and Indemnifications Litigation and Regulatory Contingencies We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services; individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages. We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses. In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority, the Department of Labor (“DOL”) and other regulatory agencies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future. On December 30, 2015, Mary Ventura, William Littlejohn and Ryan Kadota filed a lawsuit in the United States District Court for the Southern District of Iowa against Principal Management Corporation (“PMC”). The lawsuit alleges PMC breached its fiduciary duty under Section 36(b) of the Investment Company Act by charging excessive fees on the LargeCap Growth I Fund, SmallCap Growth I Fund, SmallCap Fund, High Yield Fund, MidCap Fund and the MidCap Value III Fund. PMC is aggressively defending the lawsuit. On August 29, 2013, American Chemicals & Equipment, Inc. 401(k) Retirement Plan (“ACE”) filed a lawsuit in the United States District Court for the Northern District of Alabama against PMC and Principal Global Investors, LLC (the “ACE Defendants”). The lawsuit alleged the ACE Defendants breached their fiduciary duty under Section 36(b) of the Investment Company Act by charging excessive fees on certain of the LifeTime series target date funds. Principal Global Investors, LLC was dismissed from the case on December 29, 2015. PMC was granted summary judgment on February 8, 2016, and the case was dismissed. ACE has appealed the grant of summary judgment and subsequent dismissal to the Eighth Circuit Court of Appeals. PMC continues to aggressively defend the lawsuit. In 2008, Principal Life received approximately $440.0 million in connection with the termination of certain structured transactions and the resulting prepayment of Principal Life’s investment in those transactions. The transactions involved Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc. (collectively, “Lehman”) in various capacities. Subsequent to Lehman’s 2008 bankruptcy filing, its bankruptcy estate initiated several lawsuits seeking to recover from numerous sources significant amounts to which it claims entitlement under various theories. We are one of a large group of defendants to this action. The estate’s claim against Principal Life, including interest, was approximately $600.0 million. On June 28, 2016, the bankruptcy court granted the Defendants’ motion to dismiss directed at common issues and dismissed with prejudice all claims against Principal Life. Lehman has appealed the bankruptcy court’s decision to the U.S. District Court for the Southern District of New York. While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. As of March 31, 2017, we had no estimated losses accrued related to the legal matters discussed above because we believe the chance of loss from these matters is not probable and the amount of loss cannot be reasonably estimated. We believe all of the litigation contingencies discussed above involve a chance of loss that is either remote or reasonably possible. Unless otherwise noted, all of these matters involve unspecified claim amounts, in which the respective plaintiffs seek an indeterminate amount of damages. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain, and unforeseen results can occur. It is possible such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts we could not estimate as of March 31, 2017. Guarantees and Indemnifications In the normal course of business, we have provided guarantees to third parties primarily related to former subsidiaries and joint ventures. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of March 31, 2017, was approximately $142.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. We manage mandatory privatized social security funds in Chile. By regulation, we have a required minimum guarantee on the funds’ relative return. Because the guarantee has no limitation with respect to duration or amount, the maximum exposure of the guarantee in the future is indeterminable. We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions and financing transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 9. Stockholders’ Equity Reconciliation of Outstanding Common Shares For the three months ended March 31, 2017 2016 (in millions) Beginning balance Shares issued Treasury stock acquired Ending balance In October 2015, our Board of Directors authorized a share repurchase program of up to $150.0 million of our outstanding common stock, which was completed in March 2016. In February 2016, our Board of Directors authorized a share repurchase program of up to $400.0 million of our outstanding common stock. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. Other Comprehensive Income For the three months ended March 31, 2017 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ $ $ Reclassification adjustment for losses included in net income (1) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on available-for-sale securities Noncredit component of impairment losses on fixed maturities, available-for-sale during the period Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Noncredit component of impairment losses on fixed maturities, available-for-sale (2) Net unrealized losses on derivative instruments during the period Reclassification adjustment for gains included in net income (3) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized losses on derivative instruments Foreign currency translation adjustment Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4) Net unrecognized postretirement benefit obligation Other comprehensive income $ $ $ For the three months ended March 31, 2016 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ $ $ Reclassification adjustment for losses included in net income (1) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on available-for-sale securities Noncredit component of impairment losses on fixed maturities, available-for-sale during the period Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities — Noncredit component of impairment losses on fixed maturities, available-for-sale (2) Net unrealized gains on derivative instruments during the period Reclassification adjustment for gains included in net income (3) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on derivative instruments Foreign currency translation adjustment Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4) Net unrecognized postretirement benefit obligation Other comprehensive income $ $ $ (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI. (3) See Note 4, Derivative Financial Instruments – Cash Flow Hedges, for further details. (4) Pre-tax amortization of prior service cost and actuarial loss included in net periodic benefit cost, which is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, is reported in operating expenses on the consolidated statements of operations. See Note 7, Employee and Agent Benefits – Components of Net Periodic Benefit Cost, for further details. Accumulated Other Comprehensive Loss Noncredit Net unrealized component of Net unrealized Foreign Unrecognized Accumulated gains on impairment losses gains currency postretirement other available-for-sale on fixed maturities on derivative translation benefit comprehensive securities available-for-sale instruments adjustment obligation loss (in millions) Balances as of January 1, 2016 $ $ $ $ $ $ Other comprehensive income during the period, net of adjustments — Amounts reclassified from AOCI — — Other comprehensive income Purchase of subsidiary shares from noncontrolling interest — — — — Balances as of March 31, 2016 $ $ $ $ $ $ Balances as of January 1, 2017 $ $ $ $ $ $ Other comprehensive income during the period, net of adjustments — — Amounts reclassified from AOCI — Other comprehensive income Balances as of March 31, 2017 $ $ $ $ $ $ Noncontrolling Interest Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position. The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is presented on the consolidated statements of financial position line item titled “Redeemable noncontrolling interest.” Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds. For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital. Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions): Balance as of January 1, 2016 $ Net loss attributable to redeemable noncontrolling interest Redeemable noncontrolling interest of newly consolidated entities (1) Contributions from redeemable noncontrolling interest Distributions to redeemable noncontrolling interest Purchase of subsidiary shares from redeemable noncontrolling interest Change in redemption value of redeemable noncontrolling interest Other comprehensive income attributable to redeemable noncontrolling interest Balance as of March 31, 2016 $ Balance as of January 1, 2017 $ Net income attributable to redeemable noncontrolling interest Redeemable noncontrolling interest of deconsolidated entities (2) Contributions from redeemable noncontrolling interest Distributions to redeemable noncontrolling interest Change in redemption value of redeemable noncontrolling interest Other comprehensive income attributable to redeemable noncontrolling interest Balance as of March 31, 2017 $ (1) Effective January 1, 2016, certain sponsored investment funds were consolidated as a result of the implementation of new accounting guidance. (2) We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 10. Fair Value Measurements We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements. Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability. Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 1 assets and liabilities primarily include exchange traded equity securities, mutual funds and U.S. Treasury bonds. Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Our Level 2 assets and liabilities primarily include fixed maturities (including public and private bonds), equity securities, cash equivalents, derivatives and other investments. Level 3 – Fair values are based on at least one significant unobservable input for the asset or liability. Our Level 3 assets and liabilities primarily include fixed maturities, real estate and commercial mortgage loan investments of our separate accounts, complex derivatives and embedded derivatives. Determination of Fair Value The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis or disclosed at fair value. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below. Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2017. Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities. When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may actually be impacted by company specific factors. If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of March 31, 2017, less than 1% of our total fixed maturities were Level 3 securities valued using internal pricing models. The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below. U.S. Government and Agencies/Non-U.S. Governments . Inputs include r ecently executed market transactions, interest rate yield curves, maturity dates, market price quotations and credit spreads relating to similar instruments. States and Political Subdivisions . Inputs include Municipal Securities Rulemaking Board reported trades, U.S. T reasury and other benchmark curves, material event notices, new issue data and obligor credit ratings. Corporate . Inputs include recently executed transactions, market price quotations, benchmark yields, issuer spreads and observations of equity and credit default swap curves related to the issuer . For private placement corporate securities valued through the matrix valuation approach inputs include the current Treasury curve and risk spreads based on sector, rating and average life of the issuance. RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations . Inputs include cash flows, priority of the tranche in the capital structure, expected time to maturity for the specific tranche, reinvestment period remaining and performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral and, for RMBS, prepayment speed assumptions. Other inputs include market indices and recently executed market transactions. Equity Securities Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the net asset value (“NAV”), which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. Derivatives The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses may utilize the overnight indexed swap (“OIS”) curve in their valuation. Beginning in 2017, variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3. Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the LIBOR interest rate curve to value our positions, which includes a credit spread. This credit spread incorporates an appropriate level of nonperformance risk into our valuations given the current ratings of our counterparties, as well as the collateral agreements in place. Counterparty credit risk is routinely monitored to ensure our adjustment for non-performance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the non-performance risk on these trades. Interest Rate Contracts. For non-cleared contracts we use discounted cash flow valuation techniques to determine the fair value of interest rate swaps using observable swap curves as the inputs. These are reflected in Level 2. For centrally cleared contracts we use published prices from clearinghouses. These are reflected in Level 2. In addition, we have a limited number of complex inflation-linked interest rate swaps, interest rate collars and swaptions that are valued using broker quotes. These are reflected in Level 3. Foreign Exchange Contracts. We use discounted cash flow valuation techniques that utilize observable swap curves and exchange rates as the inputs to determine the fair value of foreign currency swaps. These are reflected in Level 2. Currency forwards and currency options are valued using observable market inputs, including forward currency exchange rates. These are reflected in Level 2. In addition, we have a limited number of non-standard currency swaps that are valued using broker quotes. These are reflected within Level 3. Equity Contracts. We use an option pricing model using observable implied volatilities, dividend yields, index prices and swap curves as the inputs to determine the fair value of equity options. These are reflected in Level 2. Credit Contracts. We use either the ISDA Credit Default Swap Standard discounted cash flow model that utilizes observable default probabilities and recovery rates as inputs or broker prices to determine the fair value of credit default swaps. These are reflected in Level 3. In addition, we have a limited number of total return swaps that are valued based on the observable quoted price of underlying equity indices. These are reflected in Level 2. Other Investments Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value or for which the fair value option was elected, commercial mortgage loans of consolidated VIEs for which the fair value option was elected and equity method real estate investments for which the fair value option was elected. Invested assets of consolidated sponsored investment funds include equity securities, fixed maturities and other investments, for which fair values are determined as previously described, and are reflected in Level 1 and Level 2. The fair value of unconsolidated sponsored investment funds and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we feel we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2. Commercial mortgage loans of consolidated VIEs are valued using the more observable fair value of the liabilities of the consolidated collateralized financing entities (“CCFEs”) under the measurement alternative guidance and are reflected in Level 2. The liabilities are affiliated so are not reflected in our consolidated results. Equity method real estate investments for which the fair value option was elected are reflected in Level 3. The equity method real estate investments consist of underlying real estate and debt. The real estate fair value is estimated using a discounted cash flow valuation model that utilizes public real estate market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market cap rates and discount rates. The debt fair value is estimated using a discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. Cash Equivalents Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2. Separate Account Assets Separate account assets include equity securities, debt securities and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3. Investment Contracts Certain annuity contracts and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse, mortality, utilization and withdrawal patterns). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using stochastic models that incorporate a spread reflecting our own creditworthiness. The assumption for our own non-performance risk for investment contracts and any embedded derivatives bifurcated from certain annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Other Liabilities Certain obligations reported in other liabilities include embedded derivatives to deliver underlying securities of structured investments to third parties. The fair value of the embedded derivatives is calculated based on the value of the underlying securities that are valued based on prices obtained from third party pricing vendors as utilized and described in our discussion of how fair value is determined for fixed maturities, which are reflected in Level 2. As of December 31, 2016, obligations of consolidated VIEs for which the fair value option was elected were included in other liabilities. The VIEs’ unaffiliated obligations were valued utilizing internal pricing models, which were reflected in Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2017 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ $ — $ $ $ — Non-U.S. governments — States and political subdivisions — — — Corporate — Residential mortgage-backed securities — — — Commercial mortgage-backed securities — — Collateralized debt obligations — — Other debt obligations — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — Equity securities, available-for-sale — Equity securities, trading — Derivative assets (1) — — Other investments (2) Cash equivalents (3) — — Sub-total excluding separate account assets Separate account assets — Total assets $ $ $ $ $ Liabilities Investment contracts (4) $ $ — $ — $ — $ Derivative liabilities (1) — — Other liabilities (4) — — — Total liabilities $ $ — $ — $ $ Net assets $ $ $ $ $ December 31, 2016 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ $ — $ $ $ — Non-U.S. governments — States and political subdivisions — — — Corporate — Residential mortgage-backed securities — — — Commercial mortgage-backed securities — — Collateralized debt obligations — — Other debt obligations — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — Equity securities, available-for-sale — Equity securities, trading — — Derivative assets (1) — — Other investments (2) Cash equivalents (3) — — Sub-total excluding separate account assets Separate account assets — Total assets $ $ $ $ $ Liabilities Investment contracts (4) $ $ — $ — $ — $ Derivative liabilities (1) — — Other liabilities (4) — — Total liabilities $ $ — $ — $ $ Net assets $ $ $ $ $ (1) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. Our derivatives are primarily Level 2, with the exception of certain credit default swaps and other swaps that are Level 3. (2) Primarily includes sponsored investment funds, other investment funds, equity method investments reported at fair value and commercial mortgage loans of consolidated VIEs. (3) Includes money market instruments and short-term investments with a maturity date of three months or less when purchased. (4) Includes bifurcated embedded derivatives that are reported at fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. As of December 31, 2016, other liabilities also include obligations of consolidated VIEs reported at fair value. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. These consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $56.5 million and $57.6 million as of March 31, 2017 and December 31, 2016, respectively. Changes in Level 3 Fair Value Measurements The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows: For the three months ended March 31, 2017 Total realized/unrealized Changes in Beginning gains (losses) Net Ending unrealized asset/ purchases, asset/ gains (losses) (liability) sales, (liability) included in balance Included in issuances balance net income as of Included in other and Transfers Transfers as of relating to December 31, net income comprehensive settlements into out of March 31, positions still 2016 (1) income (3) Level 3 Level 3 2017 held (1) (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities Collateralized debt obligations — — — — Other debt obligations — — Total fixed maturities, available-for-sale Fixed maturities, trading — — — Equity securities, available-for-sale — — — — — — Equity securities, trading — — — — Derivative assets — — — Other investments — — — Separate account assets (2) — Liabilities Investment contracts — — Derivative liabilities — — — Other liabilities — — — — — For the three months ended March 31, 2016 Total realized/unrealized Changes in Beginning gains (losses) Net Ending unrealized asset/ purchases, asset/ gains (losses) (liability) sales, (liability) included in balance Included in Included in issuances balance net income as of net other and Transfers Transfers as of relating to December 31, income comprehensive settlements into out of March 31, positions still 2015 (1) income (3) Level 3 Level 3 2016 held (1) (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities — — — — Collateralized debt obligations — — — — — Other debt obligations — — — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — — Equity securities, available-for-sale — — — — — — Derivative assets — — — Other investments — — — Separate account assets (2) — Liabilities Investment contracts — — — Derivative liabilities — — Other liabilities — — — — (1) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and unrealized gains (losses) on certain fixed maturities, trading and certain derivatives used in relation to certain trading portfolios are reported in net investment income within the consolidated statements of operations. (2) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International segment separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. (3) Gross purchases, sales, issuances and settlements were: For the three months ended March 31, 2017 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ — $ $ Corporate — Commercial mortgage-backed securities — — — Collateralized debt obligations — — — Other debt obligations — — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — Derivative assets — — Other investments — — — Separate account assets (4) Liabilities Investment contracts — — Derivative liabilities — — Other liabilities — — — For the three months ended March 31, 2016 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities — — — Other debt obligations — — — Total fixed maturities, available-for-sale — Derivative assets — — — Other investments — — — Separate account assets (4) Liabilities Investment contracts — — Derivative liabilities — — — (4) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: For the three months ended March 31, 2017 Transfers out Transfers out Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 1 into of Level 2 into of Level 2 into of Level 3 into of Level 3 into Level 2 Level 3 Level 1 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ — $ — $ $ — $ — Commercial mortgage-backed securities — — — — Other debt obligations — — — — — Total fixed maturities, available-for-sale — — — — Fixed maturities, trading — — — — — Equity securities, trading — — — — — Separate account assets — — — — For the three months ended March 31, 2016 Transfers out Transfers out Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 1 into of Level 2 into of Level 2 into of Level 3 into of Level 3 into Level 2 Level 3 Level 1 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ — $ — $ — $ — $ Commercial mortgage-backed securities — — — — — Total fixed maturities, available-for-sale — — — — — Separate account assets — — — Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period. Separate account assets transferred between Level 1 and Level 2 during the three months ended March 31, 2016, primarily related to foreign equity securities. When these securities are valued at the local close price of the exchange where the assets traded, they are reflected in Level 1. When events materially affecting the value occur between the close of the local exchange and the New York Stock Exchange, we use adjusted prices determined by a third party pricing vendor to update the foreign market closing prices and the fair value is reflected in Level 2. Assets transferred into Level 3 during the three months ended March 31, 2017 and 2016, primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations. Assets transferred out of Level 3 during the three months ended March 31, 2017 and 2016, included those for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes or the measurement alternative for CCFEs. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary. March 31, 2017 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ Discounted cash flow Discount rate (1) Illiquidity premium 50 basis points (“bps”) 50bps Comparability adjustment (25)bps (25)bps Corporate Discounted cash flow Discount rate (1) 0.9%-7.4% Illiquidity premium 0bps-60bps 27bps Comparability adjustment 0bps-80bps 20bps Commercial mortgage-backed Discounted cash Discount rate (1) 2.6%-14.8% securities flow Probability of default 0.0%-10.0% Potential loss severity 0.0%-98.0% Other debt obligations Discounted cash flow Discount rate (1) Illiquidity premium 500bps 500bps Other investments Discounted cash flow - equity method real estate investments Discount rate (1) Terminal capitalization rate Average market rent growth rate Discounted cash flow - equity method real estate investments - debt Loan to value Credit spread rate March 31, 2017 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Separate account assets Discounted cash flow - mortgage loans Discount rate (1) 1.6%-5.9% Illiquidity premium 0bps-60bps 13bps Credit spread rate 72bps-502bps 224bps Discounted cash flow - real estate Discount rate (1) 5.8%-17.2% Terminal capitalization rate 4.3%-9.3% Average market rent growth rate 1.9%-4.4% Discounted cash flow - real estate debt Loan to value 11.8%-68.0% Credit spread rate 3.2%-5.2% Liabilities Investment contracts Discounted cash flow Long duration interest rate 2.6%-2.7% (2) Long-term equity market volatility 15.0%-43.5% Non-performance risk 0.3%-1.6% Utilization rate See note (3) Lapse rate 0.5%-14.1% Mortality rate See note (4) December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ Discounted cash flow Discount rate (1) Illiquidity premium 50bps 50bps Comparability adjustment (25)bps (25)bps Corporate Discounted cash flow Discount rate (1) 1.5%-7.6% Illiquidity premium 0bps-60bps 27bps Comparability adjustment 0bps-20bps 6bps December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Commercial mortgage-backed securities Discounted cash flow Discount rate (1) 3.1%-12.8% Probability of default 0.0%-10.0% Potential loss severity 0.0%-99.5% Collateralized debt obligations Discounted cash flow Discount rate (1) Probability of default Potential loss severity Other debt obligations Discounted cash flow Discount rate (1) Illiquidity premium 500bps 500bps Fixed maturities, trading Discounted cash flow Discount rate (1) 2.3%-9.0% Illiquidity premium 0bps-300bps 240bps Other investments Discounted cash flow - equity method real estate investments Discount rate (1) Terminal capitalization rate Average market rent growth rate Discounted cash flow - equity method real estate investments - debt Loan to value Credit spread rate December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Separate account assets Discounted cash flow - mortgage loans Discount rate (1) 1.4%-5.3% Illiquidity premium 0bps-60bps 13bps Credit spread rate 83bps-472bps 227bps Discounted cash flow - real estate Discount rate (1) 5.8%-16.2% Terminal capitalization rate 4.3%-9.3% Average market rent growth rate 1.8%-4.3% Discounted cash flow - real estate debt Loan to value 6 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information | |
Segment Information | 11. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Global Investors, Principal International and U.S. Insurance Solutions. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The Principal Global Investors segment provides asset management services to our asset accumulation business, our insurance operations, the Corporate segment and third party clients. This segment also includes our mutual fund business. The Principal International segment has operations in Latin America (Brazil, Chile and Mexico) and Asia (China, Hong Kong Special Administrative Region, India and Southeast Asia). We focus on locations with large middle classes, favorable demographics and growing long-term savings, ideally with voluntary or mandatory pension markets. We entered these locations through acquisitions, start-up operations and joint ventures. The U.S. Insurance Solutions segment provides specialty benefits insurance, which consists of group dental and vision insurance, individual and group disability insurance, group life insurance and non-medical fee-for-service claims administration, and individual life insurance, which provides solutions for the business market as well as our retail customers throughout the United States. Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc., our retail broker-dealer and registered investment advisor, and our exited group medical and long-term care insurance businesses are reported in this segment. Management uses segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. Pre-tax net realized capital gains (losses), as adjusted, are net of related changes in the amortization pattern of DAC and related actuarial balances, recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services, amortization of hedge accounting book value adjustments for certain discontinued hedges, net realized capital gains and losses distributed, certain adjustments related to equity method investments, certain adjustments related to sponsored investment funds and certain market value adjustments to fee revenues. Pre-tax net realized capital gains (losses), as adjusted, exclude periodic settlements and accruals on derivative instruments not designated as hedging instruments and exclude certain market value adjustments of embedded derivatives and realized capital gains (losses) associated with our exited group medical insurance business. Segment operating revenues exclude net realized capital gains (losses) (except periodic settlements and accruals on derivatives not designated as hedging instruments), including their impact on recognition of front-end fee revenues, certain market value adjustments to fee revenues, certain adjustments related to equity method investments, certain adjustments related to sponsored investment funds and amortization of hedge accounting book value adjustments for certain discontinued hedges; certain adjustments related to equity method investments, pre-tax other adjustments management believes are not indicative of overall operating trends and revenue from our exited group medical insurance business. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of segment pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefit (“OPEB”) cost allocations and (2) income tax allocations. For purposes of determining operating earnings, the segments are allocated the service component of pension and other postretirement benefit costs. The Corporate segment reflects the non-service components of pension and other postretirement benefit costs as assumptions are established and funding decisions are managed from a company-wide perspective. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements: March 31, 2017 December 31, 2016 (in millions) Assets: Retirement and Income Solutions $ $ Principal Global Investors Principal International U.S. Insurance Solutions Corporate Total consolidated assets $ $ For the three months ended March 31, 2017 2016 (in millions) Operating revenues by segment: Retirement and Income Solutions: Retirement and Income Solutions – Fee $ $ Retirement and Income Solutions – Spread Total Retirement and Income Solutions (1) Principal Global Investors (2) Principal International U.S. Insurance Solutions: Specialty benefits insurance Individual life insurance Total U.S. Insurance Solutions Corporate Total segment operating revenues Net realized capital gains (losses), net of related revenue adjustments Adjustments related to equity method investments Total revenues per consolidated statements of operations $ $ Pre-tax operating earnings (losses) by segment: Retirement and Income Solutions $ $ Principal Global Investors Principal International U.S. Insurance Solutions Corporate Total segment pre-tax operating earnings Pre-tax net realized capital gains (losses), as adjusted (3) Adjustments related to equity method investments and noncontrolling interest Income before income taxes per consolidated statements of operations $ $ (1) Reflects inter-segment revenues of $95.1 million and $89.2 million for the three months ended March 31, 2017 and 2016, respectively. (2) Reflects inter-segment revenues of $59.9 million and $54.3 million for the three months ended March 31, 2017 and 2016, respectively. (3) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the three months ended March 31, 2017 2016 (in millions) Net realized capital gains (losses): Net realized capital gains (losses) $ $ Derivative and hedging-related adjustments Market value adjustments to fee revenues — Adjustments related to equity method investments Adjustments related to sponsored investment funds Recognition of front-end fee revenue Net realized capital gains (losses), net of related revenue adjustments Amortization of deferred acquisition costs and other actuarial balances Capital (gains) losses distributed Market value adjustments of embedded derivatives Pre-tax net realized capital gains (losses), as adjusted (a) $ $ (a) As adjusted before noncontrolling interest capital gains (losses). |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 12. Stock-Based Compensation Plans As of March 31, 2017, we had the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the 2014 Directors Stock Plan, the Long-Term Performance Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan and the Directors Stock Plan (“Stock-Based Compensation Plans”). As of May 20, 2014, no new grants will be made under the Amended and Restated 2010 Stock Incentive Plan or the 2005 Directors Stock Plan. No grants have been made under the Stock Incentive Plan, the Directors Stock Plan or the Long-Term Performance Plan since at least 2005. Under the terms of the 2014 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. The 2014 Directors Stock Plan provides for the grant of nonqualified stock options, restricted stock, restricted stock units or other stock-based awards to our nonemployee directors. To date, we have not granted any incentive stock options, restricted stock or performance units under any plans. As of March 31, 2017, the maximum number of new shares of common stock available for grant under the 2014 Stock Incentive Plan and the 2014 Directors Stock Plan was 9.1 million. For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against income for stock-based awards granted under the Stock-Based Compensation Plans was as follows: For the three months ended March 31, 2017 2016 (in millions) Compensation cost $ $ Related income tax benefit Capitalized as part of an asset Nonqualified Stock Options Nonqualified stock options were granted to certain employees under the 2014 Stock Incentive Plan. Total options granted were 0.7 million for the three months ended March 31, 2017. The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during the period: For the three months ended March 31, 2017 Expected volatility % Expected term (in years) Risk-free interest rate % Expected dividend yield % Weighted average estimated fair value per common share $ As of March 31, 2017, we had $11.4 million of total unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a weighted-average service period of approximately 1.5 years. Performance Share Awards Performance share awards were granted to certain employees under the 2014 Stock Incentive Plan. Total performance share awards granted were 0.2 million for the three months ended March 31, 2017. The performance share awards granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results to be determined at the end of the performance period. The actual number of common shares to be awarded at the end of each performance period will range between 0% and 150% of the initial target awards. The fair value of performance share awards is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant date fair value of these performance share awards granted was $62.78 per common share. As of March 31, 2017, we had $13.0 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.4 years. Restricted Stock Units Restricted stock units were issued to certain employees and agents pursuant to the 2014 Stock Incentive Plan and non-employee directors pursuant to the 2014 Directors Stock Plan. Total restricted stock units granted were 0.8 million for the three months ended March 31, 2017. The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant date fair value of these restricted stock units granted was $62.78 per common share. As of March 31, 2017, we had $79.5 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted. The cost is expected to be recognized over a weighted-average period of approximately 2.1 years. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Common Share | |
Earnings Per Common Share | 13. Earnings Per Common Share The computations of the basic and diluted per share amounts were as follows: For the three months ended March 31, 2017 2016 (in millions, except per share data) Net income $ $ Subtract: Net income attributable to noncontrolling interest Total $ $ Weighted-average shares outstanding: Basic Dilutive effects: Stock options Restricted stock units Performance share awards Diluted Net income per common share: Basic $ $ Diluted $ $ The calculation of diluted earnings per share for the three months ended March 31, 2017 and 2016, excludes the incremental effect related to certain outstanding stock-based compensation grants due to their anti-dilutive effect. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Financial Information | 14. Condensed Consolidating Financial Information Principal Life has established special purpose entities to issue secured medium-term notes. Under the program, the payment obligations of principal and interest on the notes are secured by funding agreements issued by Principal Life. Principal Life’s payment obligations on the funding agreements are fully and unconditionally guaranteed by PFG. All of the outstanding stock of Principal Life is indirectly owned by PFG and PFG is the only guarantor of the payment obligations of the funding agreements. The following tables set forth condensed consolidating financial information of (i) PFG, (ii) Principal Life, (iii) Principal Financial Services, Inc. (“PFS”) and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016. In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG’s interest in all direct subsidiaries of PFG, (ii) Principal Life’s interest in all direct subsidiaries of Principal Life and (iii) PFS’s interest in Principal Life even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent’s investment and earnings. All intercompany balances and transactions, including elimination of the parent’s investment in subsidiaries, between PFG, Principal Life and PFS and all other subsidiaries have been eliminated, as shown in the column “Eliminations.” These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities. Condensed Consolidating Statements of Financial Position March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ $ $ $ Fixed maturities, trading — — Equity securities, available-for-sale — — Equity securities, trading — — Mortgage loans — Real estate — — Policy loans — — Investment in unconsolidated entities Other investments Cash and cash equivalents Accrued investment income — Premiums due and other receivables — Deferred acquisition costs — — Property and equipment — — Goodwill — — Other intangibles — — Separate account assets — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ $ $ $ Future policy benefits and claims — Other policyholder funds — Short-term debt — — — Long-term debt — Income taxes currently payable — — Deferred income taxes — Separate account liabilities — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost — — — Total stockholders’ equity attributable to PFG Noncontrolling interest — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Financial Position December 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ $ $ $ Fixed maturities, trading — — Equity securities, available-for-sale — — Equity securities, trading — — Mortgage loans — Real estate — — Policy loans — — Investment in unconsolidated entities Other investments Cash and cash equivalents Accrued investment income — Premiums due and other receivables — Deferred acquisition costs — — Property and equipment — — Goodwill — — Other intangibles — — Separate account assets — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ $ $ $ Future policy benefits and claims — Other policyholder funds — Short-term debt — — — Long-term debt — Income taxes currently payable — — Deferred income taxes — Separate account liabilities — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost — — — Total stockholders’ equity attributable to PFG Noncontrolling interest — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ $ $ — $ Fees and other revenues Net investment income Net realized capital gains (losses), excluding impairment losses on available-for-sale securities — Net other-than-temporary impairment losses on available-for-sale securities — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income — — Net impairment losses on available-for-sale securities — — Net realized capital gains (losses) — Total revenues Expenses Benefits, claims and settlement expenses — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) Equity in the net income (loss) of subsidiaries — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ $ $ — $ Fees and other revenues — Net investment income Net realized capital gains, excluding impairment losses on available-for-sale securities — — Net other-than-temporary impairment losses on available-for-sale securities — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income — — Net impairment losses on available-for-sale securities — — Net realized capital gains — — Total revenues Expenses Benefits, claims and settlement expenses — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) Equity in the net income (loss) of subsidiaries — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — Sales — Maturities — — Mortgage loans acquired or originated — Mortgage loans sold or repaid — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — Dividends and returns of capital received from unconsolidated entities — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Proceeds from financing element derivatives — — — Payments for financing element derivatives — — — Dividends to common stockholders — — — Issuance of long-term debt — — — Principal repayments of long-term debt — — — Net proceeds from short-term borrowings — — — Dividends and capital paid to parent — — Investment contract deposits — — Investment contract withdrawals — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — Sales — — Maturities — — Mortgage loans acquired or originated — Mortgage loans sold or repaid — Real estate acquired — — Real estate sold — — Net purchases of property and equipment — — Dividends and returns of capital received from (contributed to) unconsolidated entities — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Payments for financing element derivatives — — — Excess tax benefits from share-based payment arrangements — Purchase of subsidiary shares from noncontrolling interest — — — Dividends to common stockholders — — — Issuance of long-term debt — — Principal repayments of long-term debt — — — Net repayments of short-term borrowings — — — Dividends and capital paid to parent — — Investment contract deposits — — Investment contract withdrawals — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ On May 7, 2014, our shelf registration statement was filed with the SEC and became effective, replacing the shelf registration that had been in effect since May 2011. Under our current shelf registration, we have the ability to issue, in unlimited amounts, unsecured senior debt securities or subordinated debt securities, junior subordinated debt, preferred stock, common stock, warrants, depository shares, stock purchase contracts and stock purchase units of PFG, trust preferred securities of three subsidiary trusts and guarantees by PFG of these trust preferred securities. Our wholly owned subsidiary, PFS, may guarantee, fully and unconditionally or otherwise, our obligations with respect to any non-convertible securities, other than common stock, described in the shelf registration. The following tables set forth condensed consolidating financial information of (i) PFG, (ii) PFS, (iii) Principal Life and all other direct and indirect subsidiaries of PFG on a combined basis and (iv) the eliminations necessary to arrive at the information for PFG on a consolidated basis as of March 31, 2017 and December 31, 2016, and for the three months ended March 31, 2017 and 2016. In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) PFG’s interest in all direct subsidiaries of PFG and (ii) PFS’s interest in Principal Life and all other subsidiaries, where applicable, even though all such subsidiaries meet the requirements to be consolidated under U.S. GAAP. Earnings of subsidiaries are, therefore, reflected in the parent’s investment and earnings. All intercompany balances and transactions, including elimination of the parent’s investment in subsidiaries, between PFG, PFS and Principal Life and all other subsidiaries have been eliminated, as shown in the column “Eliminations.” These condensed consolidating financial statements should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities. Condensed Consolidating Statements of Financial Position March 31, 2017 Principal Life Principal Principal Insurance Company Principal Financial Financial and Other Financial Group, Inc. Services, Inc. Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ — $ $ — $ Fixed maturities, trading — — — Equity securities, available-for-sale — — — Equity securities, trading — — — Mortgage loans — — — Real estate — — — Policy loans — — — Investment in unconsolidated entities Other investments — Cash and cash equivalents Accrued investment income — — — Premiums due and other receivables — Deferred acquisition costs — — — Property and equipment — — — Goodwill — — — Other intangibles — — — Separate account assets — — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ — $ $ — $ Future policy benefits and claims — — — Other policyholder funds — — — Short-term debt — — Long-term debt Income taxes currently payable — — Deferred income taxes — — Separate account liabilities — — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost — Total stockholders’ equity attributable to PFG Noncontrolling interest — — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Financial Position December 31, 2016 Principal Life Principal Principal Insurance Company Principal Financial Financial and Other Financial Group, Inc. Services, Inc. Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ — $ $ — $ Fixed maturities, trading — — — Equity securities, available-for-sale — — — Equity securities, trading — — — Mortgage loans — — — Real estate — — — Policy loans — — — Investment in unconsolidated entities Other investments — Cash and cash equivalents Accrued investment income — — Premiums due and other receivables — Deferred acquisition costs — — — Property and equipment — — — Goodwill — — — Other intangibles — — — Separate account assets — — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ — $ $ — $ Future policy benefits and claims — — — Other policyholder funds — — — Short-term debt — — Long-term debt Income taxes currently payable — — Deferred income taxes — — Separate account liabilities — — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost — Total stockholders’ equity attributable to PFG Noncontrolling interest — — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2017 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ — $ $ — $ Fees and other revenues Net investment income (loss) Net realized capital gains, excluding impairment losses on available-for-sale securities — — Net other-than-temporary impairment losses on available-for-sale securities — — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income — — — Net impairment losses on available-for-sale securities — — — Net realized capital gains (losses) — — Total revenues Expenses Benefits, claims and settlement expenses — — — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) — Equity in the net income of subsidiaries — — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2016 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ — $ $ — $ Fees and other revenues — Net investment income Net realized capital gains (losses), excluding impairment losses on available-for-sale securities — Net other-than-temporary impairment losses on available-for-sale securities — — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to other comprehensive income — — — Net impairment losses on available-for-sale securities — — — Net realized capital gains (losses) — Total revenues Expenses Benefits, claims and settlement expenses — — — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) — Equity in the net income of subsidiaries — — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2017 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — — Sales — — — Maturities — — — Mortgage loans acquired or originated — — — Mortgage loans sold or repaid — — — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — — Dividends and returns of capital received from unconsolidated entities — — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Proceeds from financing element derivatives — — — Payments for financing element derivatives — — — Dividends to common stockholders — — — Issuance of long-term debt — — — Principal repayments of long-term debt — — — Net proceeds from short-term borrowings — — Dividends and capital paid to parent — — Investment contract deposits — — — Investment contract withdrawals — — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2016 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — — Sales — — — Maturities — — — Mortgage loans acquired or originated — — — Mortgage loans sold or repaid — — — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — — Dividends and returns of capital received from unconsolidated entities — — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Payments for financing element derivatives — — — Excess tax benefits from share-based payment arrangements — — Purchase of subsidiary shares from noncontrolling interest — — — Dividends to common stockholders — — — Issuance of long-term debt — Principal repayments of long-term debt — — — Net repayments of short-term borrowings — — Dividends and capital paid to parent — — Investment contract deposits — — — Investment contract withdrawals — — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ |
Nature of Operations and Sign22
Nature of Operations and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Nature of Operations and Significant Accounting Policies | |
Separate Accounts - Policy | Separate Accounts The separate accounts are legally segregated and are not subject to the claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. Separate account assets and separate account liabilities include certain international retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements. We have determined that summary totals are the most meaningful presentation for these funds. As of March 31, 2017 and December 31, 2016, the separate accounts included a separate account valued at $166.9 million and $158.4 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability to eligible participants of the qualified plan. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Variable Interest Entities | |
Carrying Amounts of Assets and Liabilities of Consolidated Variable Interest Entities (Table) | March 31, 2017 December 31, 2016 Total Total Total Total assets liabilities assets liabilities (in millions) Grantor trusts (1) $ $ $ $ Collateralized private investment vehicle (2) — — CMBS — — Mandatory retirement savings funds (3) Real estate (4) Sponsored investment funds (5) Total $ $ $ $ (1) The assets of grantor trusts are primarily fixed maturities, available-for-sale. The liabilities are primarily other liabilities that reflect an embedded derivative of the forecasted transaction to deliver the underlying securities. (2) The assets of the collateralized private investment vehicle were primarily fixed maturities, trading. The liabilities included derivative liabilities and an obligation to redeem notes at maturity or termination of the trusts, which were reported in other liabilities. (3) The assets of the mandatory retirement savings funds include separate account assets and equity securities, trading. The liabilities include separate account liabilities and contractholder funds. (4) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (5) The assets of sponsored investment funds are primarily fixed maturities and equity securities, which are reported in other investments, and cash. The consolidated statements of financial position included a $57.6 million and $58.8 million redeemable noncontrolling interest for sponsored investment funds as of March 31, 2017 and December 31, 2016, respectively. |
Asset Carrying Value and Maximum Loss Exposure of Unconsolidated Variable Interest Entities (Table) | Maximum exposure to Asset carrying value loss (1) (in millions) March 31, 2017 Fixed maturities, available-for-sale: Corporate $ $ Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Fixed maturities, trading: Residential mortgage-backed pass-through securities Equity securities, trading Other investments: Other limited partnership and fund interests December 31, 2016 Fixed maturities, available-for-sale: Corporate $ $ Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Fixed maturities, trading: Residential mortgage-backed pass-through securities Commercial mortgage-backed securities Collateralized debt obligations Equity securities, trading Other investments: Other limited partnership and fund interests (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities, trading. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees for our other investments. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments | |
Fixed Maturities and Equity Securities Available-for-Sale (Table) | Other-than- Gross Gross temporary Amortized unrealized unrealized impairments in cost gains losses Fair value AOCI (1) (in millions) March 31, 2017 Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ — Non-U.S. governments — States and political subdivisions Corporate Residential mortgage-backed pass-through securities — Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ December 31, 2016 Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ — Non-U.S. governments — States and political subdivisions Corporate Residential mortgage-backed pass-through securities — Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ (1) Excludes $126.3 million and $120.9 million as of March 31, 2017 and December 31, 2016 , respectively, of net unrealized gains on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date, which are included in gross unrealized gains and gross unrealized losses. |
Fixed Maturities Available-for-Sale by Contractual Maturity (Table) | Amortized cost Fair value (in millions) Due in one year or less $ $ Due after one year through five years Due after five years through ten years Due after ten years Subtotal Mortgage-backed and other asset-backed securities Total $ $ |
Net Realized Capital Gains and Losses (Table) | For the three months ended March 31, 2017 2016 (in millions) Fixed maturities, available-for-sale: Gross gains $ $ Gross losses Net impairment losses Hedging, net Fixed maturities, trading Equity securities, trading Mortgage loans Derivatives Other Net realized capital gains (losses) $ $ |
Other-Than-Temporary Impairment Losses, Net of Recoveries (Table) | For the three months ended March 31, 2017 2016 (in millions) Fixed maturities, available-for-sale $ $ Equity securities, available-for-sale — — Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) OCI (1) Net impairment losses on available-for-sale securities $ $ (1) Represents the net impact of (a) gains resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI and (b) losses resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold. |
Other-Than-Temporary Impairment, Credit Losses Recognized in Earnings (Table) | For the three months ended March 31, 2017 2016 (in millions) Beginning balance $ $ Credit losses for which an other-than-temporary impairment was not previously recognized Credit losses for which an other-than-temporary impairment was previously recognized Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold Net reduction (increase) for positive changes in cash flows expected to be collected and amortization (1) Foreign currency translation adjustment Ending balance $ $ (1) Amounts are recognized in net investment income. |
Gross Unrealized Losses for Fixed Maturities and Equity Securities (Table) | March 31, 2017 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ $ $ Non-U.S. governments States and political subdivisions Corporate Residential mortgage-backed pass- through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ $ Total equity securities, available-for-sale $ — $ $ $ $ $ December 31, 2016 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale: U.S. government and agencies $ $ $ $ — $ $ Non-U.S. governments States and political subdivisions Corporate Residential mortgage-backed pass- through securities Commercial mortgage-backed securities Collateralized debt obligations Other debt obligations Total fixed maturities, available-for-sale $ $ $ $ $ $ Total equity securities, available-for-sale $ $ $ $ $ $ |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Table) | March 31, 2017 December 31, 2016 (in millions) Net unrealized gains on fixed maturities, available-for-sale (1) $ $ Noncredit component of impairment losses on fixed maturities, available-for-sale Net unrealized losses on equity securities, available-for-sale Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on derivative instruments Net unrealized gains on equity method subsidiaries and noncontrolling interest adjustments Provision for deferred income taxes Net unrealized gains on available-for-sale securities and derivative instruments $ $ (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. |
Mortgage Loans (Table) | March 31, 2017 December 31, 2016 (in millions) Commercial mortgage loans $ $ Residential mortgage loans Total amortized cost Valuation allowance Total carrying value $ $ |
Mortgage Loans Purchased and Sold (Table) | For the three months ended March 31, 2017 2016 (in millions) Commercial mortgage loans: Purchased $ $ Residential mortgage loans: Purchased Sold |
Commercial Mortgage Loans by Geographic Distribution and Property Type Distribution (Table) | March 31, 2017 December 31, 2016 Amortized Percent Amortized Percent cost of total cost of total ($ in millions) Geographic distribution New England $ % $ % Middle Atlantic East North Central West North Central South Atlantic East South Central West South Central Mountain Pacific International Total $ % $ % Property type distribution Office $ % $ % Retail Industrial Apartments Hotel Mixed use/other Total $ % $ % |
Commercial Mortgage Loan Portfolio by Credit Risk (Table) | March 31, 2017 Brick and mortar CTL Total (in millions) A- and above $ $ $ BBB+ thru BBB- BB+ thru BB- — B+ and below Total $ $ $ December 31, 2016 Brick and mortar CTL Total (in millions) A- and above $ $ $ BBB+ thru BBB- BB+ thru BB- — B+ and below Total $ $ $ |
Performing and Non-Performing Residential Mortgage Loans (Table) | March 31, 2017 Home equity First liens Total (in millions) Performing $ $ $ Non-performing Total $ $ $ December 31, 2016 Home equity First liens Total (in millions) Performing $ $ $ Non-performing Total $ $ $ |
Non-Accrual Mortgage Loans (Table) | March 31, 2017 December 31, 2016 (in millions) Residential: Home equity $ $ First liens Total $ $ |
Mortgage Loans Aging (Table) | March 31, 2017 Recorded investment 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total loans accruing (in millions) Commercial-brick and mortar $ — $ — $ — $ — $ $ $ — Commercial-CTL — — — — — Residential-home equity — Residential-first liens Total $ $ $ $ $ $ $ December 31, 2016 Recorded investment 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total loans accruing (in millions) Commercial-brick and mortar $ — $ — $ — $ — $ $ $ — Commercial-CTL — — — — — Residential-home equity — Residential-first liens Total $ $ $ $ $ $ $ |
Mortgage Loan Valuation Allowance (Table) | Commercial Residential Total (in millions) For the three months ended March 31, 2017 Beginning balance $ $ $ Provision — Charge-offs — Recoveries — Ending balance $ $ $ Allowance ending balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Allowance ending balance $ $ $ Loan balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Loan ending balance $ $ $ For the three months ended March 31, 2016 Beginning balance $ $ $ Provision Charge-offs — Recoveries — Ending balance $ $ $ Allowance ending balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Allowance ending balance $ $ $ Loan balance by basis of impairment method: Individually evaluated for impairment $ — $ $ Collectively evaluated for impairment Loan ending balance $ $ $ |
Impaired Mortgage Loans (Table) | March 31, 2017 Unpaid Recorded principal Related investment balance allowance (in millions) With no related allowance recorded: Residential-first liens $ $ $ — With an allowance recorded: Residential-home equity Residential-first liens Total: Residential $ $ $ December 31, 2016 Unpaid Recorded principal Related investment balance allowance (in millions) With no related allowance recorded: Residential-first liens $ $ $ — With an allowance recorded: Residential-home equity Residential-first liens Total: Residential $ $ $ Average recorded Interest income investment recognized (in millions) For the three months ended March 31, 2017 With no related allowance recorded: Residential-first liens $ $ — With an allowance recorded: Residential-home equity Residential-first liens — Total: Residential $ $ For the three months ended March 31, 2016 With no related allowance recorded: Residential-first liens $ $ — With an allowance recorded: Residential-home equity Residential-first liens — Total: Residential $ $ |
Mortgage Loans Modified as a Troubled Debt Restructuring (Table) | For the three months ended March 31, 2017 TDRs TDRs in payment default Number of Recorded Number of Recorded contracts investment contracts investment (in millions) (in millions) Residential-home equity $ — $ — Residential-first liens — — Total $ $ For the three months ended March 31, 2016 TDRs TDRs in payment default Number of Recorded Number of Recorded contracts investment contracts investment (in millions) (in millions) Residential-home equity $ — $ — Total $ — $ — |
Financial Assets Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral assets (1) instruments (2) received Net amount (in millions) March 31, 2017 Derivative assets $ $ $ $ Reverse repurchase agreements — — Total $ $ $ $ December 31, 2016 Derivative assets $ $ $ $ Reverse repurchase agreements — — Total $ $ $ $ (1) The gross amount of recognized derivative and reverse repurchase agreement assets are reported with other investments and cash and cash equivalents, respectively, on the consolidated statements of financial position. The above excludes $7.5 million and $6.4 million of derivative assets as of March 31, 2017 and December 31, 2016, respectively, that are not subject to master netting agreements or similar agreements. The gross amounts of derivative and reverse repurchase agreement assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial position. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Over-The-Counter Derivatives Cleared on Chicago Mercantile Exchange” for details of the CME variation margin rule change that impacted the amounts presented for 2017. (2) Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position. |
Financial Liabilities Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral liabilities (1) instruments (2) pledged Net amount (in millions) March 31, 2017 Derivative liabilities $ $ $ $ Repurchase agreements — — Total $ $ $ $ December 31, 2016 Derivative liabilities $ $ $ $ Repurchase agreements — — Total $ $ $ $ (1) The gross amount of recognized derivative liabilities are reported with other liabilities on the consolidated statements of financial position. The above excludes $347.5 million and $394.3 million of derivative liabilities as of March 31, 2017 and December 31, 2016, respectively, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amount of recognized repurchase agreement liabilities are reported with short-term debt on the consolidated statements of financial position. The gross amounts of derivative and repurchase agreement liabilities are not netted against offsetting assets for presentation on the consolidated statements of financial position. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Over-The-Counter Derivatives Cleared on Chicago Mercantile Exchange” for details of the CME variation margin rule change that impacted the amounts presented for 2017. (2) Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position. |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Financial Instruments | |
Derivative Financial Instruments, Exposure (Table) | March 31, 2017 December 31, 2016 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ $ Interest rate options Interest rate futures Swaptions Foreign exchange contracts: Currency forwards Currency swaps Currency options — Equity contracts: Equity options Equity futures Credit contracts: Credit default swaps Total return swaps Futures Other contracts: Embedded derivatives Total notional amounts at end of period $ $ Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ $ Interest rate options Foreign exchange contracts: Currency swaps Currency forwards Currency options — Equity contracts: Equity options Credit contracts: Credit default swaps Total return swaps Total gross credit exposure Less: collateral received Net credit exposure $ $ |
Derivative Financial Instruments, Fair Value Disclosures (Table) | Derivative assets (1) Derivative liabilities (2) March 31, 2017 December 31, 2016 March 31, 2017 December 31, 2016 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ $ $ $ Foreign exchange contracts Total derivatives designated as hedging instruments $ $ $ $ Derivatives not designated as hedging instruments Interest rate contracts $ $ $ $ Foreign exchange contracts Equity contracts Credit contracts Other contracts — — Total derivatives not designated as hedging instruments Total derivative instruments $ $ $ $ (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of $119.6 million and $176.5 million as of March 31, 2017 and December 31, 2016, respectively, are reported with contractholder funds on the consolidated statements of financial position. |
Credit Derivatives Sold (Table) | March 31, 2017 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt AAA $ $ $ AA A BBB B CCC Government/municipalities AA Sovereign AA BBB Total single name credit default swaps Basket and index credit default swaps Government/municipalities AA Structured finance AAA — AA — Total basket and index credit default swaps Total credit default swap protection sold $ $ $ December 31, 2016 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt AAA $ $ $ AA A BBB B Near default Government/municipalities AA Sovereign AA BBB Total single name credit default swaps Basket and index credit default swaps Corporate debt Near default (1) Government/municipalities AA Structured finance AA — Total basket and index credit default swaps Total credit default swap protection sold $ $ $ (1) Includes $60.0 million as of December 31, 2016, notional of derivatives in consolidated collateralized private investment vehicle VIEs where the credit risk is borne by third party investors. |
Hybrid Instruments (Table) | March 31, 2017 Weighted average Amortized Carrying expected life cost value (in years) (in millions) Structured finance AA $ $ Total structured finance Total fixed maturities with credit derivatives $ $ December 31, 2016 Weighted average Amortized Carrying expected life cost value (in years) (in millions) Structured finance AA $ $ BBB BB CCC Total structured finance Total fixed maturities with credit derivatives $ $ |
Fair Value Hedges (Table) | Amount of gain (loss) Amount of gain (loss) recognized in net income on recognized in net income on related hedged item for the derivatives for the three months three months ended Derivatives in fair value hedging ended March 31, (1) Hedged items in fair value March 31, (1) relationships 2017 2016 hedging relationships 2017 2016 (in millions) (in millions) Interest rate contracts $ $ Fixed maturities, available-for-sale $ $ Interest rate contracts Investment contracts Total $ $ Total $ $ (1) The gain (loss) on both derivatives and hedged items in fair value relationships is reported in net realized capital gains (losses) on the consolidated statements of operations. The net amount represents the ineffective portion of our fair value hedges. |
Fair Value Hedges, Periodic Settlements Disclosures (Table) | Amount of gain (loss) for the three months ended March 31, Hedged item 2017 2016 (in millions) Fixed maturities, available-for-sale (1) $ $ Investment contracts (2) (1) Reported in net investment income on the consolidated statements of operations. (2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations. |
Cash Flow Hedges (Table) | Amount of gain (loss) Amount of gain (loss) recognized in AOCI on reclassified from AOCI on derivatives (effective portion) Location of gain (loss) derivatives (effective portion) Derivatives in cash for the three months ended reclassified from AOCI for the three months ended flow hedging March 31, into net income March 31, relationships Related hedged item 2017 2016 (effective portion) 2017 2016 (in millions) (in millions) Interest rate contracts Fixed maturities, available-for-sale $ $ Net investment income $ $ Net realized capital losses — Interest rate contracts Investment contracts — Benefits, claims and settlement expenses — — Interest rate contracts Debt — — Operating expense Foreign exchange contracts Fixed maturities, available-for-sale Net realized capital gains Foreign exchange contracts Investment contracts — Benefits, claims and settlement expenses — — Total $ $ Total $ $ |
Cash Flow Hedges, Periodic Settlements Disclosures (Table) | Amount of gain (loss) for the three months ended March 31, Hedged item 2017 2016 (in millions) Fixed maturities, available-for-sale (1) $ $ Investment contracts (2) (1) Reported in net investment income on the consolidated statements of operations. (2) Reported in benefits, claims and settlement expenses on the consolidated statements of operations. |
Derivatives Not Designated as Hedging Instruments (Table) | Amount of gain (loss) recognized in net income on derivatives for the three months ended March 31, Derivatives not designated as hedging instruments 2017 2016 (in millions) Interest rate contracts $ $ Foreign exchange contracts Equity contracts Credit contracts Other contracts Total $ $ |
Insurance Liabilities (Tables)
Insurance Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance Liabilities | |
Liability for Unpaid Claims (Table) | For the three months ended March 31, 2017 2016 (in millions) Balance at beginning of period $ $ Less reinsurance recoverable Net balance at beginning of period Incurred: Current year Prior years Total incurred Payments: Current year Prior years Total payments Net balance at end of period Plus reinsurance recoverable Balance at end of period $ $ Amounts not included in the rollforward above: Claim adjustment expense liabilities $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Reconciliation Between U.S. Corporate Income Tax Rate and Effective Income Tax Rate from Continuing Operations (Table) | For the three months ended March 31, 2017 2016 U.S. corporate income tax rate 35 % 35 % Dividends received deduction Impact of equity method presentation Tax credits Merger of Brazilian legal entities — Other Effective income tax rate 15 % 16 % |
Employee and Agent Benefits (Ta
Employee and Agent Benefits (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Employee and Agent Benefits | |
Components of Net Periodic Benefit Cost (Income) (Table) | Other postretirement Pension benefits benefits For the three months ended For the three months ended March 31, March 31, 2017 2016 2017 2016 (in millions) Service cost $ $ $ — $ Interest cost Expected return on plan assets Amortization of prior service benefit Recognized net actuarial loss — Net periodic benefit cost (income) $ $ $ $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Reconciliation of Outstanding Shares (Table) | For the three months ended March 31, 2017 2016 (in millions) Beginning balance Shares issued Treasury stock acquired Ending balance |
Other Comprehensive Income (Loss) (Table) | For the three months ended March 31, 2017 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ $ $ Reclassification adjustment for losses included in net income (1) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on available-for-sale securities Noncredit component of impairment losses on fixed maturities, available-for-sale during the period Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Noncredit component of impairment losses on fixed maturities, available-for-sale (2) Net unrealized losses on derivative instruments during the period Reclassification adjustment for gains included in net income (3) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized losses on derivative instruments Foreign currency translation adjustment Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4) Net unrecognized postretirement benefit obligation Other comprehensive income $ $ $ For the three months ended March 31, 2016 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ $ $ Reclassification adjustment for losses included in net income (1) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on available-for-sale securities Noncredit component of impairment losses on fixed maturities, available-for-sale during the period Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities — Noncredit component of impairment losses on fixed maturities, available-for-sale (2) Net unrealized gains on derivative instruments during the period Reclassification adjustment for gains included in net income (3) Adjustments for assumed changes in amortization patterns Adjustments for assumed changes in policyholder liabilities Net unrealized gains on derivative instruments Foreign currency translation adjustment Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4) Net unrecognized postretirement benefit obligation Other comprehensive income $ $ $ (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI. (3) See Note 4, Derivative Financial Instruments – Cash Flow Hedges, for further details. (4) Pre-tax amortization of prior service cost and actuarial loss included in net periodic benefit cost, which is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, is reported in operating expenses on the consolidated statements of operations. See Note 7, Employee and Agent Benefits – Components of Net Periodic Benefit Cost, for further details. |
Accumulated Other Comprehensive Income (Loss) (Table) | Noncredit Net unrealized component of Net unrealized Foreign Unrecognized Accumulated gains on impairment losses gains currency postretirement other available-for-sale on fixed maturities on derivative translation benefit comprehensive securities available-for-sale instruments adjustment obligation loss (in millions) Balances as of January 1, 2016 $ $ $ $ $ $ Other comprehensive income during the period, net of adjustments — Amounts reclassified from AOCI — — Other comprehensive income Purchase of subsidiary shares from noncontrolling interest — — — — Balances as of March 31, 2016 $ $ $ $ $ $ Balances as of January 1, 2017 $ $ $ $ $ $ Other comprehensive income during the period, net of adjustments — — Amounts reclassified from AOCI — Other comprehensive income Balances as of March 31, 2017 $ $ $ $ $ $ |
Redeemable Noncontrolling Interest (Table) | Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions): Balance as of January 1, 2016 $ Net loss attributable to redeemable noncontrolling interest Redeemable noncontrolling interest of newly consolidated entities (1) Contributions from redeemable noncontrolling interest Distributions to redeemable noncontrolling interest Purchase of subsidiary shares from redeemable noncontrolling interest Change in redemption value of redeemable noncontrolling interest Other comprehensive income attributable to redeemable noncontrolling interest Balance as of March 31, 2016 $ Balance as of January 1, 2017 $ Net income attributable to redeemable noncontrolling interest Redeemable noncontrolling interest of deconsolidated entities (2) Contributions from redeemable noncontrolling interest Distributions to redeemable noncontrolling interest Change in redemption value of redeemable noncontrolling interest Other comprehensive income attributable to redeemable noncontrolling interest Balance as of March 31, 2017 $ (1) Effective January 1, 2016, certain sponsored investment funds were consolidated as a result of the implementation of new accounting guidance. (2) We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value (Table) | March 31, 2017 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ $ — $ $ $ — Non-U.S. governments — States and political subdivisions — — — Corporate — Residential mortgage-backed securities — — — Commercial mortgage-backed securities — — Collateralized debt obligations — — Other debt obligations — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — Equity securities, available-for-sale — Equity securities, trading — Derivative assets (1) — — Other investments (2) Cash equivalents (3) — — Sub-total excluding separate account assets Separate account assets — Total assets $ $ $ $ $ Liabilities Investment contracts (4) $ $ — $ — $ — $ Derivative liabilities (1) — — Other liabilities (4) — — — Total liabilities $ $ — $ — $ $ Net assets $ $ $ $ $ December 31, 2016 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ $ — $ $ $ — Non-U.S. governments — States and political subdivisions — — — Corporate — Residential mortgage-backed securities — — — Commercial mortgage-backed securities — — Collateralized debt obligations — — Other debt obligations — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — Equity securities, available-for-sale — Equity securities, trading — — Derivative assets (1) — — Other investments (2) Cash equivalents (3) — — Sub-total excluding separate account assets Separate account assets — Total assets $ $ $ $ $ Liabilities Investment contracts (4) $ $ — $ — $ — $ Derivative liabilities (1) — — Other liabilities (4) — — Total liabilities $ $ — $ — $ $ Net assets $ $ $ $ $ (1) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. Our derivatives are primarily Level 2, with the exception of certain credit default swaps and other swaps that are Level 3. (2) Primarily includes sponsored investment funds, other investment funds, equity method investments reported at fair value and commercial mortgage loans of consolidated VIEs. (3) Includes money market instruments and short-term investments with a maturity date of three months or less when purchased. (4) Includes bifurcated embedded derivatives that are reported at fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. As of December 31, 2016, other liabilities also include obligations of consolidated VIEs reported at fair value. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. These consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $56.5 million and $57.6 million as of March 31, 2017 and December 31, 2016, respectively. |
Reconciliation for All Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Table) | For the three months ended March 31, 2017 Total realized/unrealized Changes in Beginning gains (losses) Net Ending unrealized asset/ purchases, asset/ gains (losses) (liability) sales, (liability) included in balance Included in issuances balance net income as of Included in other and Transfers Transfers as of relating to December 31, net income comprehensive settlements into out of March 31, positions still 2016 (1) income (3) Level 3 Level 3 2017 held (1) (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities Collateralized debt obligations — — — — Other debt obligations — — Total fixed maturities, available-for-sale Fixed maturities, trading — — — Equity securities, available-for-sale — — — — — — Equity securities, trading — — — — Derivative assets — — — Other investments — — — Separate account assets (2) — Liabilities Investment contracts — — Derivative liabilities — — — Other liabilities — — — — — For the three months ended March 31, 2016 Total realized/unrealized Changes in Beginning gains (losses) Net Ending unrealized asset/ purchases, asset/ gains (losses) (liability) sales, (liability) included in balance Included in Included in issuances balance net income as of net other and Transfers Transfers as of relating to December 31, income comprehensive settlements into out of March 31, positions still 2015 (1) income (3) Level 3 Level 3 2016 held (1) (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities — — — — Collateralized debt obligations — — — — — Other debt obligations — — — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — — Equity securities, available-for-sale — — — — — — Derivative assets — — — Other investments — — — Separate account assets (2) — Liabilities Investment contracts — — — Derivative liabilities — — Other liabilities — — — — (1) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and unrealized gains (losses) on certain fixed maturities, trading and certain derivatives used in relation to certain trading portfolios are reported in net investment income within the consolidated statements of operations. (2) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International segment separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. (3) Gross purchases, sales, issuances and settlements were: For the three months ended March 31, 2017 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ $ — $ $ Corporate — Commercial mortgage-backed securities — — — Collateralized debt obligations — — — Other debt obligations — — — Total fixed maturities, available-for-sale — Fixed maturities, trading — — — Derivative assets — — Other investments — — — Separate account assets (4) Liabilities Investment contracts — — Derivative liabilities — — Other liabilities — — — For the three months ended March 31, 2016 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ $ — $ — $ $ Corporate — Commercial mortgage-backed securities — — — Other debt obligations — — — Total fixed maturities, available-for-sale — Derivative assets — — — Other investments — — — Separate account assets (4) Liabilities Investment contracts — — Derivative liabilities — — — (4) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. |
Transfers (Table) | For the three months ended March 31, 2017 Transfers out Transfers out Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 1 into of Level 2 into of Level 2 into of Level 3 into of Level 3 into Level 2 Level 3 Level 1 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ — $ — $ $ — $ — Commercial mortgage-backed securities — — — — Other debt obligations — — — — — Total fixed maturities, available-for-sale — — — — Fixed maturities, trading — — — — — Equity securities, trading — — — — — Separate account assets — — — — For the three months ended March 31, 2016 Transfers out Transfers out Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 1 into of Level 2 into of Level 2 into of Level 3 into of Level 3 into Level 2 Level 3 Level 1 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ — $ — $ — $ — $ Commercial mortgage-backed securities — — — — — Total fixed maturities, available-for-sale — — — — — Separate account assets — — — |
Quantitative Information about Level 3 Fair Value Measurements (Table) | March 31, 2017 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ Discounted cash flow Discount rate (1) Illiquidity premium 50 basis points (“bps”) 50bps Comparability adjustment (25)bps (25)bps Corporate Discounted cash flow Discount rate (1) 0.9%-7.4% Illiquidity premium 0bps-60bps 27bps Comparability adjustment 0bps-80bps 20bps Commercial mortgage-backed Discounted cash Discount rate (1) 2.6%-14.8% securities flow Probability of default 0.0%-10.0% Potential loss severity 0.0%-98.0% Other debt obligations Discounted cash flow Discount rate (1) Illiquidity premium 500bps 500bps Other investments Discounted cash flow - equity method real estate investments Discount rate (1) Terminal capitalization rate Average market rent growth rate Discounted cash flow - equity method real estate investments - debt Loan to value Credit spread rate March 31, 2017 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Separate account assets Discounted cash flow - mortgage loans Discount rate (1) 1.6%-5.9% Illiquidity premium 0bps-60bps 13bps Credit spread rate 72bps-502bps 224bps Discounted cash flow - real estate Discount rate (1) 5.8%-17.2% Terminal capitalization rate 4.3%-9.3% Average market rent growth rate 1.9%-4.4% Discounted cash flow - real estate debt Loan to value 11.8%-68.0% Credit spread rate 3.2%-5.2% Liabilities Investment contracts Discounted cash flow Long duration interest rate 2.6%-2.7% (2) Long-term equity market volatility 15.0%-43.5% Non-performance risk 0.3%-1.6% Utilization rate See note (3) Lapse rate 0.5%-14.1% Mortality rate See note (4) December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Non-U.S. governments $ Discounted cash flow Discount rate (1) Illiquidity premium 50bps 50bps Comparability adjustment (25)bps (25)bps Corporate Discounted cash flow Discount rate (1) 1.5%-7.6% Illiquidity premium 0bps-60bps 27bps Comparability adjustment 0bps-20bps 6bps December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Commercial mortgage-backed securities Discounted cash flow Discount rate (1) 3.1%-12.8% Probability of default 0.0%-10.0% Potential loss severity 0.0%-99.5% Collateralized debt obligations Discounted cash flow Discount rate (1) Probability of default Potential loss severity Other debt obligations Discounted cash flow Discount rate (1) Illiquidity premium 500bps 500bps Fixed maturities, trading Discounted cash flow Discount rate (1) 2.3%-9.0% Illiquidity premium 0bps-300bps 240bps Other investments Discounted cash flow - equity method real estate investments Discount rate (1) Terminal capitalization rate Average market rent growth rate Discounted cash flow - equity method real estate investments - debt Loan to value Credit spread rate December 31, 2016 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Separate account assets Discounted cash flow - mortgage loans Discount rate (1) 1.4%-5.3% Illiquidity premium 0bps-60bps 13bps Credit spread rate 83bps-472bps 227bps Discounted cash flow - real estate Discount rate (1) 5.8%-16.2% Terminal capitalization rate 4.3%-9.3% Average market rent growth rate 1.8%-4.3% Discounted cash flow - real estate debt Loan to value 6.3%-69.7% Credit spread rate 3.3%-4.6% Liabilities Investment contracts Discounted cash flow Long duration interest rate 2.6%-2.7% (2) Long-term equity market volatility 16.0%-45.9% Non-performance risk 0.3%-1.7% Utilization rate See note (3) Lapse rate 0.5%-14.1% Mortality rate See note (4) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any credit spread, illiquidity or other adjustments, where applicable. (2) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (3) This input factor is the number of contractholders taking withdrawals as well as the amount and timing of the withdrawals and a range does not provide a meaningful presentation. (4) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. |
Fair Value Option (Table) | March 31, 2017 December 31, 2016 (in millions) Commercial mortgage loans of consolidated VIEs (1) (2) Fair value $ $ Aggregate contractual principal Obligations of consolidated VIEs (3) Fair value — Aggregate unpaid principal — Real estate ventures (1) Fair value Investment funds (1) Fair value (1) Reported with other investments in the consolidated statements of financial position. (2) None of the loans were more than 90 days past due or in non-accrual status. (3) Reported with other liabilities in the consolidated statements of financial position. For the three months ended March 31, 2017 2016 (in millions) Commercial mortgage loans of consolidated VIEs Change in fair value pre-tax loss (1) (2) $ $ Interest income (3) Obligations of consolidated VIEs Change in fair value pre-tax loss - instrument specific credit risk (2) (4) Change in fair value pre-tax loss (2) Interest expense (5) Real estate ventures Change in fair value pre-tax gain (6) Investment funds Change in fair value pre-tax gain (loss) (6) (7) Dividend income (6) — (1) None of the change in fair value related to instrument-specific credit risk. (2) Reported in net realized capital gains (losses) on the consolidated statements of operations. (3) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rates as determined at the closing of the loan. (4) Estimated based on credit spreads and quality ratings. (5) Reported in operating expenses on the consolidated statements of operations. (6) Reported in net investment income on the consolidated statements of operations. (7) Absent the fair value election, the change in fair value on the investments would be reported in OCI. |
Financial Instruments Not Reported at Fair Value (Table) | March 31, 2017 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ $ $ — $ — $ Policy loans — — Other investments — Cash and cash equivalents — Investment contracts — Short-term debt — — Long-term debt — — Separate account liabilities — — Bank deposits — Cash collateral payable — — December 31, 2016 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ $ $ — $ — $ Policy loans — — Other investments — Cash and cash equivalents — Investment contracts — Short-term debt — — Long-term debt — — Separate account liabilities — — Bank deposits — Cash collateral payable — — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information | |
Reconciliation of Assets from Segment to Consolidated (Table) | March 31, 2017 December 31, 2016 (in millions) Assets: Retirement and Income Solutions $ $ Principal Global Investors Principal International U.S. Insurance Solutions Corporate Total consolidated assets $ $ |
Reconciliation of Operating Revenues and Pre-tax Operating Earnings (Losses) by Segment (Table) | For the three months ended March 31, 2017 2016 (in millions) Operating revenues by segment: Retirement and Income Solutions: Retirement and Income Solutions – Fee $ $ Retirement and Income Solutions – Spread Total Retirement and Income Solutions (1) Principal Global Investors (2) Principal International U.S. Insurance Solutions: Specialty benefits insurance Individual life insurance Total U.S. Insurance Solutions Corporate Total segment operating revenues Net realized capital gains (losses), net of related revenue adjustments Adjustments related to equity method investments Total revenues per consolidated statements of operations $ $ Pre-tax operating earnings (losses) by segment: Retirement and Income Solutions $ $ Principal Global Investors Principal International U.S. Insurance Solutions Corporate Total segment pre-tax operating earnings Pre-tax net realized capital gains (losses), as adjusted (3) Adjustments related to equity method investments and noncontrolling interest Income before income taxes per consolidated statements of operations $ $ (1) Reflects inter-segment revenues of $95.1 million and $89.2 million for the three months ended March 31, 2017 and 2016, respectively. (2) Reflects inter-segment revenues of $59.9 million and $54.3 million for the three months ended March 31, 2017 and 2016, respectively. (3) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the three months ended March 31, 2017 2016 (in millions) Net realized capital gains (losses): Net realized capital gains (losses) $ $ Derivative and hedging-related adjustments Market value adjustments to fee revenues — Adjustments related to equity method investments Adjustments related to sponsored investment funds Recognition of front-end fee revenue Net realized capital gains (losses), net of related revenue adjustments Amortization of deferred acquisition costs and other actuarial balances Capital (gains) losses distributed Market value adjustments of embedded derivatives Pre-tax net realized capital gains (losses), as adjusted (a) $ $ (a) As adjusted before noncontrolling interest capital gains (losses). |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Disclosures (Table) | For the three months ended March 31, 2017 2016 (in millions) Compensation cost $ $ Related income tax benefit Capitalized as part of an asset |
Nonqualified Stock Options Fair Value (Table) | For the three months ended March 31, 2017 Expected volatility % Expected term (in years) Risk-free interest rate % Expected dividend yield % Weighted average estimated fair value per common share $ |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Common Share | |
Earnings Per Common Share (Table) | For the three months ended March 31, 2017 2016 (in millions, except per share data) Net income $ $ Subtract: Net income attributable to noncontrolling interest Total $ $ Weighted-average shares outstanding: Basic Dilutive effects: Stock options Restricted stock units Performance share awards Diluted Net income per common share: Basic $ $ Diluted $ $ |
Condensed Consolidating Finan34
Condensed Consolidating Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Financial Information, Notes Guarantor (Table) | Condensed Consolidating Statements of Financial Position March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ $ $ $ Fixed maturities, trading — — Equity securities, available-for-sale — — Equity securities, trading — — Mortgage loans — Real estate — — Policy loans — — Investment in unconsolidated entities Other investments Cash and cash equivalents Accrued investment income — Premiums due and other receivables — Deferred acquisition costs — — Property and equipment — — Goodwill — — Other intangibles — — Separate account assets — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ $ $ $ Future policy benefits and claims — Other policyholder funds — Short-term debt — — — Long-term debt — Income taxes currently payable — — Deferred income taxes — Separate account liabilities — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost — — — Total stockholders’ equity attributable to PFG Noncontrolling interest — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Financial Position December 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ $ $ $ Fixed maturities, trading — — Equity securities, available-for-sale — — Equity securities, trading — — Mortgage loans — Real estate — — Policy loans — — Investment in unconsolidated entities Other investments Cash and cash equivalents Accrued investment income — Premiums due and other receivables — Deferred acquisition costs — — Property and equipment — — Goodwill — — Other intangibles — — Separate account assets — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ $ $ $ Future policy benefits and claims — Other policyholder funds — Short-term debt — — — Long-term debt — Income taxes currently payable — — Deferred income taxes — Separate account liabilities — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost — — — Total stockholders’ equity attributable to PFG Noncontrolling interest — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ $ $ — $ Fees and other revenues Net investment income Net realized capital gains (losses), excluding impairment losses on available-for-sale securities — Net other-than-temporary impairment losses on available-for-sale securities — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income — — Net impairment losses on available-for-sale securities — — Net realized capital gains (losses) — Total revenues Expenses Benefits, claims and settlement expenses — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) Equity in the net income (loss) of subsidiaries — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ $ $ — $ Fees and other revenues — Net investment income Net realized capital gains, excluding impairment losses on available-for-sale securities — — Net other-than-temporary impairment losses on available-for-sale securities — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income — — Net impairment losses on available-for-sale securities — — Net realized capital gains — — Total revenues Expenses Benefits, claims and settlement expenses — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) Equity in the net income (loss) of subsidiaries — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2017 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — Sales — Maturities — — Mortgage loans acquired or originated — Mortgage loans sold or repaid — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — Dividends and returns of capital received from unconsolidated entities — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Proceeds from financing element derivatives — — — Payments for financing element derivatives — — — Dividends to common stockholders — — — Issuance of long-term debt — — — Principal repayments of long-term debt — — — Net proceeds from short-term borrowings — — — Dividends and capital paid to parent — — Investment contract deposits — — Investment contract withdrawals — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2016 Principal Principal Life Principal Financial Principal Financial Insurance Services, Inc. and Financial Group, Inc. Company Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — Sales — — Maturities — — Mortgage loans acquired or originated — Mortgage loans sold or repaid — Real estate acquired — — Real estate sold — — Net purchases of property and equipment — — Dividends and returns of capital received from (contributed to) unconsolidated entities — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Payments for financing element derivatives — — — Excess tax benefits from share-based payment arrangements — Purchase of subsidiary shares from noncontrolling interest — — — Dividends to common stockholders — — — Issuance of long-term debt — — Principal repayments of long-term debt — — — Net repayments of short-term borrowings — — — Dividends and capital paid to parent — — Investment contract deposits — — Investment contract withdrawals — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ |
Condensed Consolidating Financial Information, Shelf Registration Guarantor (Table) | Condensed Consolidating Statements of Financial Position March 31, 2017 Principal Life Principal Principal Insurance Company Principal Financial Financial and Other Financial Group, Inc. Services, Inc. Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ — $ $ — $ Fixed maturities, trading — — — Equity securities, available-for-sale — — — Equity securities, trading — — — Mortgage loans — — — Real estate — — — Policy loans — — — Investment in unconsolidated entities Other investments — Cash and cash equivalents Accrued investment income — — — Premiums due and other receivables — Deferred acquisition costs — — — Property and equipment — — — Goodwill — — — Other intangibles — — — Separate account assets — — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ — $ $ — $ Future policy benefits and claims — — — Other policyholder funds — — — Short-term debt — — Long-term debt Income taxes currently payable — — Deferred income taxes — — Separate account liabilities — — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost — Total stockholders’ equity attributable to PFG Noncontrolling interest — — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Financial Position December 31, 2016 Principal Life Principal Principal Insurance Company Principal Financial Financial and Other Financial Group, Inc. Services, Inc. Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Assets Fixed maturities, available-for-sale $ — $ — $ $ — $ Fixed maturities, trading — — — Equity securities, available-for-sale — — — Equity securities, trading — — — Mortgage loans — — — Real estate — — — Policy loans — — — Investment in unconsolidated entities Other investments — Cash and cash equivalents Accrued investment income — — Premiums due and other receivables — Deferred acquisition costs — — — Property and equipment — — — Goodwill — — — Other intangibles — — — Separate account assets — — — Other assets Total assets $ $ $ $ $ Liabilities Contractholder funds $ — $ — $ $ — $ Future policy benefits and claims — — — Other policyholder funds — — — Short-term debt — — Long-term debt Income taxes currently payable — — Deferred income taxes — — Separate account liabilities — — — Other liabilities Total liabilities Redeemable noncontrolling interest — — — Stockholders’ equity Common stock — Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost — Total stockholders’ equity attributable to PFG Noncontrolling interest — — — Total stockholders’ equity Total liabilities and stockholders’ equity $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2017 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ — $ $ — $ Fees and other revenues Net investment income (loss) Net realized capital gains, excluding impairment losses on available-for-sale securities — — Net other-than-temporary impairment losses on available-for-sale securities — — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified from other comprehensive income — — — Net impairment losses on available-for-sale securities — — — Net realized capital gains (losses) — — Total revenues Expenses Benefits, claims and settlement expenses — — — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) — Equity in the net income of subsidiaries — — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Operations For the three months ended March 31, 2016 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Revenues Premiums and other considerations $ — $ — $ $ — $ Fees and other revenues — Net investment income Net realized capital gains (losses), excluding impairment losses on available-for-sale securities — Net other-than-temporary impairment losses on available-for-sale securities — — — Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to other comprehensive income — — — Net impairment losses on available-for-sale securities — — — Net realized capital gains (losses) — Total revenues Expenses Benefits, claims and settlement expenses — — — Dividends to policyholders — — — Operating expenses Total expenses Income (loss) before income taxes Income taxes (benefits) — Equity in the net income of subsidiaries — — Net income Net income attributable to noncontrolling interest — — — Net income attributable to PFG $ $ $ $ $ Net income $ $ $ $ $ Other comprehensive income Comprehensive income $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2017 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — — Sales — — — Maturities — — — Mortgage loans acquired or originated — — — Mortgage loans sold or repaid — — — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — — Dividends and returns of capital received from unconsolidated entities — — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Proceeds from financing element derivatives — — — Payments for financing element derivatives — — — Dividends to common stockholders — — — Issuance of long-term debt — — — Principal repayments of long-term debt — — — Net proceeds from short-term borrowings — — Dividends and capital paid to parent — — Investment contract deposits — — — Investment contract withdrawals — — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ Condensed Consolidating Statements of Cash Flows For the three months ended March 31, 2016 Principal Life Principal Principal Insurance Principal Financial Financial Company and Financial Group, Inc. Services, Inc. Other Subsidiaries Group, Inc. Parent Only Only Combined Eliminations Consolidated (in millions) Operating activities Net cash provided by (used in) operating activities $ $ $ $ $ Investing activities Available-for-sale securities: Purchases — — — Sales — — — Maturities — — — Mortgage loans acquired or originated — — — Mortgage loans sold or repaid — — — Real estate acquired — — — Real estate sold — — — Net purchases of property and equipment — — — Dividends and returns of capital received from unconsolidated entities — — Net change in other investments Net cash provided by (used in) investing activities Financing activities Issuance of common stock — — — Acquisition of treasury stock — — — Payments for financing element derivatives — — — Excess tax benefits from share-based payment arrangements — — Purchase of subsidiary shares from noncontrolling interest — — — Dividends to common stockholders — — — Issuance of long-term debt — Principal repayments of long-term debt — — — Net repayments of short-term borrowings — — Dividends and capital paid to parent — — Investment contract deposits — — — Investment contract withdrawals — — — Net increase in banking operation deposits — — — Other — — — Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ $ $ $ $ |
Nature of Operations and Sign35
Nature of Operations and Significant Accounting Policies - Recent Accounting Pronouncements (Details) | Dec. 31, 2016 |
Accounting Standards Update 2014-09 | Maximum | |
Recent Accounting Pronouncements | |
Percentage of total revenues expected to be subject to new revenue recognition accounting guidance (as a percent) | 20.00% |
Nature of Operations and Sign36
Nature of Operations and Significant Accounting Policies - Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives | ||
Other investments | $ 3,283.6 | $ 3,655.9 |
Other liabilities | $ 5,405.2 | 5,783.3 |
Interest rate contracts | Over-The-Counter Derivatives Cleared on Chicago Mercantile Exchange | ||
Derivatives | ||
Other investments | 528 | |
Other liabilities | $ 527.7 |
Nature of Operations and Sign37
Nature of Operations and Significant Accounting Policies - Separate Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Separate Accounts | ||
Separate account that primarily includes shares of Principal Financial Group, Inc. stock that were allocated and issued to eligible participants of qualified employee benefit plans as part of the 2001 demutualization | $ 166.9 | $ 158.4 |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated VIEs (Details) $ in Millions | Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item |
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | $ 39,466.2 | $ 37,298.4 |
Total liabilities | $ 38,579.5 | 36,504.3 |
Grantor trusts | ||
Consolidated Variable Interest Entity disclosures | ||
Number of consolidated variable interest entities | item | 3 | |
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | $ 243.1 | 233.3 |
Total liabilities | 223.6 | $ 212.3 |
Collateralized private investment vehicle | ||
Consolidated Variable Interest Entity disclosures | ||
Number of entities for which the reporting entity acts as primary beneficiary | item | 1 | |
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | $ 82.4 | |
Total liabilities | 61.5 | |
Commercial mortgage-backed securities VIE | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 11.6 | 12.5 |
Mandatory retirement savings funds | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 38,670.2 | 36,526.7 |
Total liabilities | 38,320.8 | 36,202.8 |
Real estate VIE | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 342 | 329.2 |
Total liabilities | 12.1 | 26.8 |
Sponsored investment funds | ||
Carrying amounts of consolidated VIE assets and liabilities | ||
Total assets | 199.3 | 114.3 |
Total liabilities | 23 | 0.9 |
Redeemable noncontrolling interest | $ 57.6 | $ 58.8 |
Variable Interest Entities - Un
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Money Market Funds | ||
Total assets of unconsolidated money market mutual funds | $ 700 | $ 800 |
Other investments: Other limited partnership and fund interests | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 719.2 | 654.6 |
Maximum exposure to loss | 1,220 | 1,127.8 |
Available-for-sale | Corporate debt securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 370.2 | 368.4 |
Maximum exposure to loss | 303.1 | 298.6 |
Available-for-sale | Residential mortgage-backed pass-through securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 2,839.9 | 2,834.7 |
Maximum exposure to loss | 2,807.4 | 2,798 |
Available-for-sale | Commercial mortgage-backed securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 3,862.9 | 4,096.5 |
Maximum exposure to loss | 3,903.8 | 4,153.2 |
Available-for-sale | Collateralized debt obligations | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 987.9 | 758.6 |
Maximum exposure to loss | 1,006.9 | 780.1 |
Available-for-sale | Other debt obligations | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 5,246.9 | 5,036.1 |
Maximum exposure to loss | 5,252.1 | 5,048.9 |
Trading | Residential mortgage-backed pass-through securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 18.8 | 19.9 |
Maximum exposure to loss | 18.8 | 19.9 |
Trading | Commercial mortgage-backed securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 1.9 | |
Maximum exposure to loss | 1.9 | |
Trading | Collateralized debt obligations | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 10.6 | |
Maximum exposure to loss | 10.6 | |
Trading | Equity securities | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 76.5 | 68.3 |
Maximum exposure to loss | $ 76.5 | $ 68.3 |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Fixed maturities | ||
Available-for-sale securities disclosures | ||
Amortized cost | $ 54,986.6 | $ 53,184.2 |
Gross unrealized gains | 2,482.4 | 2,310.7 |
Gross unrealized losses | 479.9 | 648.8 |
Fair value | 56,989.1 | 54,846.1 |
Other-than-temporary impairments in AOCI | 144.9 | 146.4 |
Net unrealized gains (losses) on impaired fixed maturities, available-for-sale related to changes in fair value subsequent to the impairment date | 126.3 | 120.9 |
U.S. government and agencies | ||
Available-for-sale securities disclosures | ||
Amortized cost | 1,430.3 | 1,426.7 |
Gross unrealized gains | 19.1 | 17.2 |
Gross unrealized losses | 11.2 | 10.9 |
Fair value | 1,438.2 | 1,433 |
Non-U.S. governments | ||
Available-for-sale securities disclosures | ||
Amortized cost | 881.9 | 781.7 |
Gross unrealized gains | 126.3 | 119.3 |
Gross unrealized losses | 3.4 | 7.4 |
Fair value | 1,004.8 | 893.6 |
States and political subdivisions | ||
Available-for-sale securities disclosures | ||
Amortized cost | 5,854.1 | 5,463.9 |
Gross unrealized gains | 215.4 | 192.4 |
Gross unrealized losses | 70 | 87.1 |
Fair value | 5,999.5 | 5,569.2 |
Other-than-temporary impairments in AOCI | 1.1 | 1.1 |
Corporate debt securities | ||
Available-for-sale securities disclosures | ||
Amortized cost | 33,806.8 | 32,699.7 |
Gross unrealized gains | 1,988.2 | 1,843.5 |
Gross unrealized losses | 229.5 | 350.8 |
Fair value | 35,565.5 | 34,192.4 |
Other-than-temporary impairments in AOCI | 20 | 17.2 |
Residential mortgage-backed pass-through securities | ||
Available-for-sale securities disclosures | ||
Amortized cost | 2,807.4 | 2,798 |
Gross unrealized gains | 63.2 | 67.3 |
Gross unrealized losses | 30.7 | 30.6 |
Fair value | 2,839.9 | 2,834.7 |
Commercial mortgage-backed securities | ||
Available-for-sale securities disclosures | ||
Amortized cost | 3,903.8 | 4,153.2 |
Gross unrealized gains | 29.3 | 31.2 |
Gross unrealized losses | 70.2 | 87.9 |
Fair value | 3,862.9 | 4,096.5 |
Other-than-temporary impairments in AOCI | 74.8 | 77.5 |
Collateralized debt obligations | ||
Available-for-sale securities disclosures | ||
Amortized cost | 1,006.9 | 780.1 |
Gross unrealized gains | 2.5 | 2.8 |
Gross unrealized losses | 21.5 | 24.3 |
Fair value | 987.9 | 758.6 |
Other-than-temporary impairments in AOCI | 0.3 | 0.3 |
Other debt obligations | ||
Available-for-sale securities disclosures | ||
Amortized cost | 5,295.4 | 5,080.9 |
Gross unrealized gains | 38.4 | 37 |
Gross unrealized losses | 43.4 | 49.8 |
Fair value | 5,290.4 | 5,068.1 |
Other-than-temporary impairments in AOCI | 48.7 | 50.3 |
Equity securities | ||
Available-for-sale securities disclosures | ||
Amortized cost | 116.4 | 104.9 |
Gross unrealized gains | 6.3 | 4.9 |
Gross unrealized losses | 8.7 | 10.9 |
Fair value | $ 114 | $ 98.9 |
Investments - Amortization by E
Investments - Amortization by Expected Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Amortized cost of fixed maturities available-for-sale | ||
Due in one year or less | $ 3,071 | |
Due after one year through five years | 12,366.7 | |
Due after five years through ten years | 9,178.9 | |
Due after ten years | 17,356.5 | |
Subtotal | 41,973.1 | |
Mortgage-backed and other asset-backed securities | 13,013.5 | |
Total | 54,986.6 | |
Fair value of fixed maturities available-for-sale | ||
Due in one year or less | 3,097.7 | |
Due after one year through five years | 12,772.7 | |
Due after five years through ten years | 9,444.8 | |
Due after ten years | 18,692.8 | |
Subtotal | 44,008 | |
Mortgage-backed and other asset-backed securities | 12,981.1 | |
Total | $ 56,989.1 | $ 54,846.1 |
Investments - Net Realized Capi
Investments - Net Realized Capital Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Major components of net realized capital gains (losses) on investments | ||
Net impairment (losses) recoveries on available-for-sale securities | $ (28.8) | $ (48.1) |
Net realized capital gains (losses) | (16.6) | 136.6 |
Mortgage loans | ||
Major components of net realized capital gains (losses) on investments | ||
Realized capital gains (losses) | (0.4) | 2.5 |
Derivatives | ||
Major components of net realized capital gains (losses) on investments | ||
Realized capital gains (losses) | (6.7) | 185.6 |
Other investment types | ||
Major components of net realized capital gains (losses) on investments | ||
Realized capital gains (losses) | 14.8 | 2.5 |
Available-for-sale | Fixed maturities | ||
Major components of net realized capital gains (losses) on investments | ||
Gross gains | 4 | 3.2 |
Gross losses | (8.2) | (2.5) |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Hedging, net | (13.3) | 7.4 |
Proceeds from sales of investments | ||
Proceeds from sales of investments in fixed maturities, available-for-sale | 361.3 | 205.8 |
Trading | Fixed maturities | ||
Major components of net realized capital gains (losses) on investments | ||
Realized gains (losses) on trading securities | 0.3 | 8.9 |
Trading | Equity securities | ||
Major components of net realized capital gains (losses) on investments | ||
Realized gains (losses) on trading securities | $ 21.7 | $ (22.9) |
Investments - Other-Than-Tempor
Investments - Other-Than-Temporary Impairments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other-than-temporary impairment losses, net of recoveries | ||
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | $ (27.3) | $ (55.6) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1.5) | 7.5 |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Fixed maturities | ||
Other-than-temporary impairment losses, net of recoveries | ||
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | $ (27.3) | $ (55.6) |
Investments - Accumulated Credi
Investments - Accumulated Credit Losses for Fixed Maturities with Bifurcated Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other-Than-Temporary Impairment Credit Losses Recognized in Net Income - Rollforward | ||
Beginning balance | $ (139.9) | $ (131.5) |
Credit losses for which an other-than-temporary impairment was not previously recognized | (13.3) | (26.5) |
Credit losses for which an other-than-temporary impairment was previously recognized | (9.5) | (6.3) |
Reduction for credit losses previously recognized on fixed maturities now sold, paid down or intended to be sold | 7.5 | 5.1 |
Net reduction (increase) for positive changes in cash flows expected to be collected and amortization | 2.9 | (1) |
Foreign currency translation adjustment | (0.1) | (0.2) |
Ending balance | $ (152.4) | $ (160.4) |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses for Fixed Maturities and Equity Securities (Details) $ in Millions | Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($)item |
Fixed maturities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | $ 13,582.6 | $ 14,955.3 |
Less than twelve months, Gross unrealized losses | 322.3 | 396.6 |
Greater than or equal to twelve months, Fair value | 2,228.4 | 2,511.1 |
Greater than or equal to twelve months, Gross unrealized losses | 157.6 | 252.2 |
Total, Fair value | 15,811 | 17,466.4 |
Total, Gross unrealized losses | 479.9 | 648.8 |
U.S. government and agencies | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 420.6 | 570.3 |
Less than twelve months, Gross unrealized losses | 11.1 | 10.9 |
Greater than or equal to twelve months, Fair value | 10.7 | 8.2 |
Greater than or equal to twelve months, Gross unrealized losses | 0.1 | |
Total, Fair value | 431.3 | 578.5 |
Total, Gross unrealized losses | 11.2 | 10.9 |
Non-U.S. governments | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 146.7 | 198 |
Less than twelve months, Gross unrealized losses | 1.6 | 5.4 |
Greater than or equal to twelve months, Fair value | 10.2 | 12.2 |
Greater than or equal to twelve months, Gross unrealized losses | 1.8 | 2 |
Total, Fair value | 156.9 | 210.2 |
Total, Gross unrealized losses | 3.4 | 7.4 |
States and political subdivisions | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 1,931.2 | 2,229.4 |
Less than twelve months, Gross unrealized losses | 69.5 | 86.6 |
Greater than or equal to twelve months, Fair value | 5.9 | 4.8 |
Greater than or equal to twelve months, Gross unrealized losses | 0.5 | 0.5 |
Total, Fair value | 1,937.1 | 2,234.2 |
Total, Gross unrealized losses | 70 | 87.1 |
Corporate debt securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 5,780.4 | 6,559.7 |
Less than twelve months, Gross unrealized losses | 150.1 | 189.2 |
Greater than or equal to twelve months, Fair value | 1,016.7 | 1,285.6 |
Greater than or equal to twelve months, Gross unrealized losses | 79.4 | 161.6 |
Total, Fair value | 6,797.1 | 7,845.3 |
Total, Gross unrealized losses | 229.5 | 350.8 |
Residential mortgage-backed pass-through securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 1,277 | 1,265.6 |
Less than twelve months, Gross unrealized losses | 29.8 | 29.8 |
Greater than or equal to twelve months, Fair value | 15.6 | 16 |
Greater than or equal to twelve months, Gross unrealized losses | 0.9 | 0.8 |
Total, Fair value | 1,292.6 | 1,281.6 |
Total, Gross unrealized losses | 30.7 | 30.6 |
Commercial mortgage-backed securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 1,433.1 | 1,637.2 |
Less than twelve months, Gross unrealized losses | 33.6 | 41 |
Greater than or equal to twelve months, Fair value | 593.5 | 612.5 |
Greater than or equal to twelve months, Gross unrealized losses | 36.6 | 46.9 |
Total, Fair value | 2,026.6 | 2,249.7 |
Total, Gross unrealized losses | 70.2 | 87.9 |
Collateralized debt obligations | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 239.4 | 265.7 |
Less than twelve months, Gross unrealized losses | 0.5 | 0.9 |
Greater than or equal to twelve months, Fair value | 161.2 | 195.6 |
Greater than or equal to twelve months, Gross unrealized losses | 21 | 23.4 |
Total, Fair value | 400.6 | 461.3 |
Total, Gross unrealized losses | 21.5 | 24.3 |
Other debt obligations | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 2,354.2 | 2,229.4 |
Less than twelve months, Gross unrealized losses | 26.1 | 32.8 |
Greater than or equal to twelve months, Fair value | 414.6 | 376.2 |
Greater than or equal to twelve months, Gross unrealized losses | 17.3 | 17 |
Total, Fair value | 2,768.8 | 2,605.6 |
Total, Gross unrealized losses | 43.4 | 49.8 |
Equity securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 18.2 | |
Less than twelve months, Gross unrealized losses | 0.1 | 0.4 |
Greater than or equal to twelve months, Fair value | 37.2 | 35.4 |
Greater than or equal to twelve months, Gross unrealized losses | 8.6 | 10.5 |
Total, Fair value | 37.2 | 53.6 |
Total, Gross unrealized losses | 8.7 | 10.9 |
Principal Life Insurance Company | Fixed maturities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Less than twelve months, Fair value | 13,316.1 | 14,549.4 |
Less than twelve months, Gross unrealized losses | 316.5 | 384.6 |
Greater than or equal to twelve months, Fair value | 2,069.3 | 2,369.5 |
Greater than or equal to twelve months, Gross unrealized losses | 144.6 | 230.5 |
Total, Fair value | 15,385.4 | 16,918.9 |
Total, Gross unrealized losses | $ 461.1 | $ 615.1 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Percent Investment Grade (as a percent) | 94.00% | 94.00% |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Average Price (percent of carrying value to amortized cost) | item | 97 | 96 |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less Than Twelve Months | item | 1,686 | 1,911 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Less Than Twelve Months (percent of carrying value to amortized cost) | item | 98 | 97 |
Available-for-sale Securities in Unrealized Loss Positions, Percent Investment Grade, Less Than Twelve Months (as a percent) | 97.00% | 98.00% |
Available-for-sale Securities in Unrealized Loss Position, Aggregate Losses On Investment Grade Investments, Less Than Twelve Months | $ 308.8 | $ 374.1 |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Twelve Months or Longer | item | 408 | 453 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item | 93 | 91 |
Principal Life Insurance Company | Corporate debt securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Greater than or equal to twelve months, Gross unrealized losses | $ 68 | $ 141.9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item | 93 | 89 |
Principal Life Insurance Company | Commercial mortgage-backed securities | ||
Gross Unrealized Losses for Fixed Maturities and Equity Securities | ||
Greater than or equal to twelve months, Gross unrealized losses | $ 36.6 | $ 46.9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | item | 94 | 93 |
Investments - Net Unrealized Ga
Investments - Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments | ||
Net unrealized gains (losses) on fixed maturities, available-for-sale | $ 2,084.9 | $ 1,727.8 |
Noncredit component of impairment losses on fixed maturities, available-for-sale | (144.9) | (146.4) |
Net unrealized gains (losses) on equity securities, available-for-sale | (2.4) | (6) |
Adjustments for assumed changes in amortization patterns | (136.2) | (121.9) |
Adjustments for assumed changes in policyholder liabilities | (545.2) | (469.2) |
Net unrealized gains (losses) on derivative instruments | 163.6 | 186.5 |
Net unrealized gains (losses) on equity method subsidiaries and noncontrolling interest adjustments | 53.7 | 68 |
Provision for deferred income tax benefits (taxes) | (494.1) | (411.8) |
Net unrealized gains (losses) on available-for-sale securities and derivative instruments | $ 979.4 | $ 827 |
Investments - Mortgage Loans (D
Investments - Mortgage Loans (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 13,433.3 | $ 12,428 | $ 13,275.1 | |
Mortgage loan valuation allowance | (45.2) | (49.3) | (44.9) | $ (51.6) |
Mortgage loans, Total carrying value | 13,388.1 | 13,230.2 | ||
Commercial mortgage loans | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | 12,165.7 | 11,267.7 | 12,055.2 | |
Mortgage loan valuation allowance | (28) | (27.1) | $ (27.4) | (27.5) |
Mortgage loans, purchased | $ 27.6 | 93.4 | ||
Percent of mortgage loans (as a percent) | 100.00% | 100.00% | ||
Commercial mortgage loans | Office | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 4,467.9 | $ 4,417.6 | ||
Percent of mortgage loans (as a percent) | 36.70% | 36.60% | ||
Commercial mortgage loans | Retail | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 2,631.2 | $ 2,671.1 | ||
Percent of mortgage loans (as a percent) | 21.60% | 22.20% | ||
Commercial mortgage loans | Industrial | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 1,796 | $ 1,802.4 | ||
Percent of mortgage loans (as a percent) | 14.80% | 15.00% | ||
Commercial mortgage loans | Apartments | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 2,844 | $ 2,741.4 | ||
Percent of mortgage loans (as a percent) | 23.40% | 22.70% | ||
Commercial mortgage loans | Hotel | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 236.9 | $ 260.7 | ||
Percent of mortgage loans (as a percent) | 1.90% | 2.20% | ||
Commercial mortgage loans | Mixed use/other | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 189.7 | $ 162 | ||
Percent of mortgage loans (as a percent) | 1.60% | 1.30% | ||
Commercial mortgage loans | New England | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 569.4 | $ 532.1 | ||
Percent of mortgage loans (as a percent) | 4.70% | 4.40% | ||
Commercial mortgage loans | Middle Atlantic | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 3,463.6 | $ 3,317.3 | ||
Percent of mortgage loans (as a percent) | 28.50% | 27.50% | ||
Commercial mortgage loans | East North Central | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 638.4 | $ 652.6 | ||
Percent of mortgage loans (as a percent) | 5.20% | 5.40% | ||
Commercial mortgage loans | West North Central | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 183.2 | $ 185.6 | ||
Percent of mortgage loans (as a percent) | 1.50% | 1.50% | ||
Commercial mortgage loans | South Atlantic | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 2,177.3 | $ 2,189.5 | ||
Percent of mortgage loans (as a percent) | 17.90% | 18.20% | ||
Commercial mortgage loans | East South Central | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 323.2 | $ 239.3 | ||
Percent of mortgage loans (as a percent) | 2.70% | 2.00% | ||
Commercial mortgage loans | West South Central | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 1,153.6 | $ 1,211.7 | ||
Percent of mortgage loans (as a percent) | 9.50% | 10.10% | ||
Commercial mortgage loans | Mountain | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 893.8 | $ 932.6 | ||
Percent of mortgage loans (as a percent) | 7.30% | 7.70% | ||
Commercial mortgage loans | Pacific | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 2,674.8 | $ 2,707.2 | ||
Percent of mortgage loans (as a percent) | 22.00% | 22.50% | ||
Commercial mortgage loans | International | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 88.4 | $ 87.3 | ||
Percent of mortgage loans (as a percent) | 0.70% | 0.70% | ||
Residential mortgage loans | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 1,267.6 | 1,160.3 | $ 1,219.9 | |
Mortgage loan valuation allowance | (17.2) | (22.2) | (17.5) | $ (24.1) |
Mortgage loans, purchased | 91.7 | 55.8 | ||
Mortgage loans, sold | 13 | $ 17.5 | ||
Home equity | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | 152.3 | 165.6 | ||
First liens | ||||
Mortgage loan disclosures | ||||
Mortgage loans, Total amortized cost | $ 1,115.3 | $ 1,054.3 |
Investments - Mortgage Loan Cre
Investments - Mortgage Loan Credit Monitoring (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | $ 13,433.3 | $ 13,275.1 | $ 12,428 |
Commercial mortgage loans | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 12,165.7 | 12,055.2 | 11,267.7 |
Commercial mortgage loans | A- and above | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 10,779.2 | 10,771.3 | |
Commercial mortgage loans | BBB+ thru BBB- | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,209.5 | 1,110.4 | |
Commercial mortgage loans | BB+ thru BB- | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 163.3 | 160.5 | |
Commercial mortgage loans | B+ and below | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 13.7 | 13 | |
Brick and mortar | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 11,912.8 | 11,795.2 | |
Brick and mortar | A- and above | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 10,624 | 10,612.8 | |
Brick and mortar | BBB+ thru BBB- | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,112.5 | 1,009.8 | |
Brick and mortar | BB+ thru BB- | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 163.3 | 160.5 | |
Brick and mortar | B+ and below | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 13 | 12.1 | |
Credit tenant loans | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 252.9 | 260 | |
Credit tenant loans | A- and above | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 155.2 | 158.5 | |
Credit tenant loans | BBB+ thru BBB- | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 97 | 100.6 | |
Credit tenant loans | B+ and below | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 0.7 | 0.9 | |
Residential mortgage loans | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,267.6 | 1,219.9 | $ 1,160.3 |
Residential mortgage loans | Performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,248.3 | 1,199.9 | |
Residential mortgage loans | Non-performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | $ 19.3 | 20 | |
Mortgage loans, Days delinquent to be considered non-performing | 90 days | ||
Home equity | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | $ 152.3 | 165.6 | |
Home equity | Performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 143.6 | 156.8 | |
Home equity | Non-performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 8.7 | 8.8 | |
First liens | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,115.3 | 1,054.3 | |
First liens | Performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | 1,104.7 | 1,043.1 | |
First liens | Non-performing | |||
Mortgage loan credit quality disclosures | |||
Mortgage loans, Total amortized cost | $ 10.6 | $ 11.2 |
Investments - Non-Accrual Mortg
Investments - Non-Accrual Mortgage Loans (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Mortgage loan non-accrual and aging disclosures | |||
Mortgage loans, Non-accrual status | $ 12.8 | $ 14.4 | |
Past due | 64.5 | 65.8 | |
Current | 13,368.8 | 13,209.3 | |
Mortgage loans, Total amortized cost | 13,433.3 | 13,275.1 | $ 12,428 |
Recorded investment 90 days or more past due and accruing | 6.5 | 5.6 | |
30 to 59 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 41.1 | 42 | |
60 to 89 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 12 | 12.4 | |
90 Days or More Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 11.4 | 11.4 | |
Commercial mortgage loans | |||
Mortgage loan non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 12,165.7 | 12,055.2 | 11,267.7 |
Brick and mortar | |||
Mortgage loan non-accrual and aging disclosures | |||
Current | 11,912.8 | 11,795.2 | |
Mortgage loans, Total amortized cost | 11,912.8 | 11,795.2 | |
Credit tenant loans | |||
Mortgage loan non-accrual and aging disclosures | |||
Current | 252.9 | 260 | |
Mortgage loans, Total amortized cost | 252.9 | 260 | |
Residential mortgage loans | |||
Mortgage loan non-accrual and aging disclosures | |||
Mortgage loans, Total amortized cost | 1,267.6 | 1,219.9 | $ 1,160.3 |
Home equity | |||
Mortgage loan non-accrual and aging disclosures | |||
Mortgage loans, Non-accrual status | 8.7 | 8.8 | |
Past due | 4.2 | 4.4 | |
Current | 148.1 | 161.2 | |
Mortgage loans, Total amortized cost | 152.3 | 165.6 | |
Home equity | 30 to 59 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 1.8 | 1.9 | |
Home equity | 60 to 89 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 0.9 | 1.1 | |
Home equity | 90 Days or More Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 1.5 | 1.4 | |
First liens | |||
Mortgage loan non-accrual and aging disclosures | |||
Mortgage loans, Non-accrual status | 4.1 | 5.6 | |
Past due | 60.3 | 61.4 | |
Current | 1,055 | 992.9 | |
Mortgage loans, Total amortized cost | 1,115.3 | 1,054.3 | |
Recorded investment 90 days or more past due and accruing | 6.5 | 5.6 | |
First liens | 30 to 59 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 39.3 | 40.1 | |
First liens | 60 to 89 Days Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | 11.1 | 11.3 | |
First liens | 90 Days or More Past Due | |||
Mortgage loan non-accrual and aging disclosures | |||
Past due | $ 9.9 | $ 10 |
Investments - Mortgage Loan Val
Investments - Mortgage Loan Valuation Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Changes in mortgage loan valuation allowance | |||
Beginning balance, Mortgage loan valuation allowance | $ 44.9 | $ 51.6 | |
Provision: Mortgage loan valuation allowance | 0.6 | (2.3) | |
Charge-offs: Mortgage loan valuation allowance | (1.6) | (0.8) | |
Recoveries: Mortgage loan valuation allowance | 1.3 | 0.8 | |
Ending balance, Mortgage loan valuation allowance | 45.2 | 49.3 | |
Individually evaluated for impairment, Mortgage loan valuation allowance | 5.8 | 7.2 | |
Collectively evaluated for impairment, Mortgage loan valuation allowance | 39.4 | 42.1 | |
Individually evaluated for impairment, Mortgage loans | 18 | 21.6 | |
Collectively evaluated for impairment, Mortgage loans | 13,415.3 | 12,406.4 | |
Mortgage loans, Total amortized cost | $ 13,433.3 | 12,428 | $ 13,275.1 |
Commercial mortgage loans | |||
Mortgage loan valuation allowance disclosures | |||
Mortgage loans, Days delinquent to be analyzed for valuation allowance | 60 days | ||
Changes in mortgage loan valuation allowance | |||
Beginning balance, Mortgage loan valuation allowance | $ 27.4 | 27.5 | |
Provision: Mortgage loan valuation allowance | 0.6 | (0.4) | |
Ending balance, Mortgage loan valuation allowance | 28 | 27.1 | |
Collectively evaluated for impairment, Mortgage loan valuation allowance | 28 | 27.1 | |
Collectively evaluated for impairment, Mortgage loans | 12,165.7 | 11,267.7 | |
Mortgage loans, Total amortized cost | 12,165.7 | 11,267.7 | 12,055.2 |
Residential mortgage loans | |||
Changes in mortgage loan valuation allowance | |||
Beginning balance, Mortgage loan valuation allowance | 17.5 | 24.1 | |
Provision: Mortgage loan valuation allowance | (1.9) | ||
Charge-offs: Mortgage loan valuation allowance | (1.6) | (0.8) | |
Recoveries: Mortgage loan valuation allowance | 1.3 | 0.8 | |
Ending balance, Mortgage loan valuation allowance | 17.2 | 22.2 | |
Individually evaluated for impairment, Mortgage loan valuation allowance | 5.8 | 7.2 | |
Collectively evaluated for impairment, Mortgage loan valuation allowance | 11.4 | 15 | |
Individually evaluated for impairment, Mortgage loans | 18 | 21.6 | |
Collectively evaluated for impairment, Mortgage loans | 1,249.6 | 1,138.7 | |
Mortgage loans, Total amortized cost | $ 1,267.6 | $ 1,160.3 | $ 1,219.9 |
Investments - Impaired Mortgage
Investments - Impaired Mortgage Loans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Residential mortgage loans | |||
Impaired mortgage loans | |||
Recorded investment in impaired mortgage loans | $ 18 | $ 19.2 | |
Unpaid principal balance of impaired mortgage loans | 19 | 20.2 | |
Related allowance for impaired mortgage loans | 5.8 | 5.9 | |
Average investment in impaired mortgage loans | 18.7 | $ 22.5 | |
Interest income recognized on impaired mortgage loans | 0.1 | 0.1 | |
Home equity | |||
Impaired mortgage loans | |||
Recorded investment in impaired mortgage loans with related allowance | 13 | 13 | |
Unpaid principal balance of impaired mortgage loans with related allowance | 14.1 | 14.1 | |
Related allowance for impaired mortgage loans | 5.4 | 5.5 | |
Average investment in impaired mortgage loans with related allowance | 13 | 13.4 | |
Interest income recognized on impaired mortgage loans with related allowance | 0.1 | 0.1 | |
First liens | |||
Impaired mortgage loans | |||
Recorded investment in impaired mortgage loans with no related allowance | 0.4 | 1.5 | |
Recorded investment in impaired mortgage loans with related allowance | 4.6 | 4.7 | |
Unpaid principal balance of impaired mortgage loans with no related allowance | 0.4 | 1.5 | |
Unpaid principal balance of impaired mortgage loans with related allowance | 4.5 | 4.6 | |
Related allowance for impaired mortgage loans | 0.4 | $ 0.4 | |
Average investment in impaired mortgage loans with no related allowance | 1 | 3.4 | |
Average investment in impaired mortgage loans with related allowance | $ 4.7 | $ 5.7 |
Investments - Mortgage Loan Mod
Investments - Mortgage Loan Modifications (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($)item | |
Mortgage Loan Modifications | ||
Number of mortgage loans modified as a troubled debt restructuring | item | 5 | 2 |
Recorded investment of mortgage loans modified as a troubled debt restructuring | $ | $ 0.3 | $ 0.2 |
Number of mortgage loans modified as a troubled debt restructuring in payment default | item | 1 | |
Recorded investment of mortgage loans modified as a troubled debt restructuring in payment default | $ | $ 0.1 | |
Home equity | ||
Mortgage Loan Modifications | ||
Number of mortgage loans modified as a troubled debt restructuring | item | 5 | 2 |
Recorded investment of mortgage loans modified as a troubled debt restructuring | $ | $ 0.3 | $ 0.2 |
First liens | ||
Mortgage Loan Modifications | ||
Number of mortgage loans modified as a troubled debt restructuring in payment default | item | 1 | |
Recorded investment of mortgage loans modified as a troubled debt restructuring in payment default | $ | $ 0.1 |
Investments - Securities Posted
Investments - Securities Posted as Collateral (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Securities Posted as Collateral | ||
Commercial mortgage loans and home equity mortgages posted as collateral associated with obligation under funding agreements with the Federal Home Loan Bank of Des Moines | $ 2,987.1 | $ 2,562.8 |
Fixed maturity securities posted as collateral for a reinsurance arrangement, derivative credit support annex (collateral) agreements, Futures Commission Merchant agreements, a lending arrangement and an obligation under funding agreements with Federal Home Loan Bank of Des Moines | 2,042.2 | 2,233.2 |
Securities posted as collateral eligible to be sold or repledged | $ 179.9 | $ 272.8 |
Investments - Balance Sheet Off
Investments - Balance Sheet Offsetting, Assets (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | $ 351.2 | $ 928.3 |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (147.1) | (294.2) |
Collateral received, financial assets | (202.1) | (623.1) |
Net amount of assets subject to netting agreements | 2 | 11 |
Derivative assets | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 310.6 | 887.2 |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (147.1) | (294.2) |
Collateral received, financial assets | (161.5) | (582) |
Net amount of assets subject to netting agreements | 2 | 11 |
Gross amount of assets not subject to netting agreements | 7.5 | 6.4 |
Reverse repurchase agreements | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 40.6 | 41.1 |
Collateral received, financial assets | $ (40.6) | $ (41.1) |
Investments - Balance Sheet O55
Investments - Balance Sheet Offsetting, Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Financial Liability Offsetting | ||
Gross amount of recognized liabilities subject to netting agreements | $ 304.7 | $ 577.2 |
Amount of assets that offset the gross amount of liabilities subject to netting agreements not offset in statement of financial position | (147.1) | (294.2) |
Collateral pledged, financial liabilities | (115.5) | (243.9) |
Net amount of liabilities subject to netting agreements | 42.1 | 39.1 |
Derivative liabilities | ||
Financial Liability Offsetting | ||
Gross amount of recognized liabilities subject to netting agreements | 287.3 | 567.5 |
Amount of assets that offset the gross amount of liabilities subject to netting agreements not offset in statement of financial position | (147.1) | (294.2) |
Collateral pledged, financial liabilities | (115.5) | (243.9) |
Net amount of liabilities subject to netting agreements | 24.7 | 29.4 |
Gross amount of liabilities not subject to netting agreements | 347.5 | 394.3 |
Repurchase agreements | ||
Financial Liability Offsetting | ||
Gross amount of recognized liabilities subject to netting agreements | 17.4 | 9.7 |
Net amount of liabilities subject to netting agreements | $ 17.4 | $ 9.7 |
Derivative Financial Instrume56
Derivative Financial Instruments - Notional Amounts and Credit Exposure (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Derivative Financial Instruments, exposure | ||
Cash and securities posted under collateral arrangements associated with derivative credit support agreements and Futures Commission Merchant agreements | $ 192.2 | $ 322.4 |
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position | 279.8 | 454.7 |
Collateral and initial margin posted supporting derivatives with credit-risk-related contingent features that were in a liability position | 192.2 | 322.4 |
Additional collateral required to be posted if derivative credit-risk-related contingent features were triggered | 41.8 | |
Cash collateral received associated with derivative credit support annex agreements and Futures Commission Merchant agreements | 131.7 | 576.3 |
Notional amount | 43,576.7 | 46,370.8 |
Gross credit exposure | 337.1 | 908.9 |
Less: collateral received | 172.2 | 586.8 |
Net credit exposure | 164.9 | 322.1 |
Interest rate swaps | ||
Derivative Financial Instruments, exposure | ||
Cash exchanged under contract | 0 | |
Principal payments made under contract | 0 | |
Notional amount | 22,620.4 | 23,520.4 |
Gross credit exposure | 187.6 | 733.1 |
Interest rate options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 3,970.5 | 4,950.5 |
Gross credit exposure | 23.7 | 27.3 |
Interest rate futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 112.5 | 96 |
Swaptions | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 14 | 77 |
Currency forwards | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 896.4 | 851.3 |
Gross credit exposure | 7 | 6.4 |
Currency swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 850.7 | 1,552 |
Gross credit exposure | 95.2 | 106.2 |
Currency options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 63.2 | |
Gross credit exposure | 0.2 | |
Equity options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 3,515.1 | 3,505.8 |
Gross credit exposure | 15.7 | 28.2 |
Equity futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 338.2 | 545.1 |
Credit default swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 867.5 | 961.3 |
Gross credit exposure | 7.6 | 7 |
Total return swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 80 | 90 |
Gross credit exposure | 0.1 | 0.7 |
Credit Futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 17 | 11.9 |
Embedded derivative financial instruments | ||
Derivative Financial Instruments, exposure | ||
Notional amount | $ 10,231.2 | $ 10,209.5 |
Derivative Financial Instrume57
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Derivatives, fair value disclosures | ||
Derivative instruments, assets | $ 318.1 | $ 893.6 |
Derivative instruments, liabilities | 634.8 | 961.8 |
Fair value of embedded derivative liabilities reported with contractholder funds | 119.6 | 176.5 |
Derivatives designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 71.4 | 91.2 |
Derivative instruments, liabilities | 48 | 214.7 |
Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 246.7 | 802.4 |
Derivative instruments, liabilities | 586.8 | 747.1 |
Interest rate contracts | Derivatives designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 2.3 | 4.4 |
Derivative instruments, liabilities | 28 | 71.3 |
Interest rate contracts | Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 191 | 739.3 |
Derivative instruments, liabilities | 49.2 | 200.6 |
Foreign exchange contracts | Derivatives designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 69.1 | 86.8 |
Derivative instruments, liabilities | 20 | 143.4 |
Foreign exchange contracts | Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 32.6 | 27.2 |
Derivative instruments, liabilities | 52.3 | 56.2 |
Equity contracts | Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 15.6 | 28.2 |
Derivative instruments, liabilities | 138.8 | 95.9 |
Credit contracts | Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 7.5 | 7.7 |
Derivative instruments, liabilities | 3.5 | 5.7 |
Other contracts | Derivatives not designated as hedging instrument | ||
Derivatives, fair value disclosures | ||
Derivative instruments, liabilities | $ 343 | $ 388.7 |
Derivative Financial Instrume58
Derivative Financial Instruments - Credit Derivatives Sold (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Credit default swaps | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 697 | $ 784.8 |
Fair value | 6.1 | 2.1 |
Maximum future payments | $ 697 | $ 784.8 |
Weighted average expected life | 1 year 8 months 12 days | 1 year 8 months 12 days |
Single name credit default swaps | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 664 | $ 669 |
Fair value | 6.4 | 4.1 |
Maximum future payments | $ 664 | $ 669 |
Weighted average expected life | 1 year 9 months 18 days | 1 year 10 months 24 days |
Single name credit default swaps | Corporate debt securities | AAA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 30 | $ 30 |
Fair value | 0.5 | 0.6 |
Maximum future payments | $ 30 | $ 30 |
Weighted average expected life | 2 years | 2 years 2 months 12 days |
Single name credit default swaps | Corporate debt securities | AA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 94 | $ 94 |
Fair value | 0.7 | 0.8 |
Maximum future payments | $ 94 | $ 94 |
Weighted average expected life | 10 months 24 days | 1 year 2 months 12 days |
Single name credit default swaps | Corporate debt securities | A | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 105 | $ 145 |
Fair value | 0.8 | 1.2 |
Maximum future payments | $ 105 | $ 145 |
Weighted average expected life | 1 year 1 month 6 days | 1 year 3 months 18 days |
Single name credit default swaps | Corporate debt securities | BBB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 310 | $ 290 |
Fair value | 3.2 | 2.3 |
Maximum future payments | $ 310 | $ 290 |
Weighted average expected life | 1 year 9 months 18 days | 2 years 1 month 6 days |
Single name credit default swaps | Corporate debt securities | B | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 20 | $ 20 |
Fair value | (0.3) | (1.8) |
Maximum future payments | $ 20 | $ 20 |
Weighted average expected life | 2 years 7 months 6 days | 2 years 9 months 18 days |
Single name credit default swaps | Corporate debt securities | CCC | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 10 | |
Fair value | 0.5 | |
Maximum future payments | $ 10 | |
Weighted average expected life | 2 years 8 months 12 days | |
Single name credit default swaps | Corporate debt securities | Near default | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 10 | |
Fair value | 0.2 | |
Maximum future payments | $ 10 | |
Weighted average expected life | 3 years | |
Single name credit default swaps | Government/municipalities | AA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 30 | $ 30 |
Fair value | 0.4 | 0.4 |
Maximum future payments | $ 30 | $ 30 |
Weighted average expected life | 2 years 1 month 6 days | 2 years 3 months 18 days |
Single name credit default swaps | Sovereign | AA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 10 | $ 10 |
Fair value | 0.2 | 0.1 |
Maximum future payments | $ 10 | $ 10 |
Weighted average expected life | 2 years 6 months | 2 years 8 months 12 days |
Single name credit default swaps | Sovereign | BBB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 55 | $ 40 |
Fair value | 0.4 | 0.3 |
Maximum future payments | $ 55 | $ 40 |
Weighted average expected life | 3 years 1 month 6 days | 2 years 8 months 12 days |
Basket and index credit default swaps | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 33 | $ 115.8 |
Fair value | (0.3) | (2) |
Maximum future payments | $ 33 | $ 115.8 |
Weighted average expected life | 6 months | 4 months 24 days |
Basket and index credit default swaps | Corporate debt securities | Near default | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 82.3 | |
Fair value | (1.6) | |
Maximum future payments | $ 82.3 | |
Weighted average expected life | 2 months 12 days | |
Notional amount of derivative whose credit risk is borne by third party investors | $ 60 | |
Basket and index credit default swaps | Government/municipalities | AA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 30 | 30 |
Fair value | (0.3) | (0.4) |
Maximum future payments | $ 30 | $ 30 |
Weighted average expected life | 6 months | 8 months 12 days |
Basket and index credit default swaps | Structured finance | AAA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 0.9 | |
Maximum future payments | $ 0.9 | |
Weighted average expected life | 8 months 12 days | |
Basket and index credit default swaps | Structured finance | AA | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 2.1 | $ 3.5 |
Maximum future payments | $ 2.1 | $ 3.5 |
Weighted average expected life | 6 months | 9 months 18 days |
Derivative Financial Instrume59
Derivative Financial Instruments - Fixed Maturities with Embedded Credit Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Derivative Financial Instruments | ||
Future potential payments in the event of default of an investment in fixed maturity securities that contain embedded credit derivatives | $ 0 | |
Hybrid instruments disclosures | ||
Amortized cost | 10.3 | $ 24.6 |
Carrying value | $ 10.3 | $ 24.6 |
Weighted average expected life | 6 months | 9 months 18 days |
Structured finance | ||
Hybrid instruments disclosures | ||
Amortized cost | $ 10.3 | $ 24.6 |
Carrying value | $ 10.3 | $ 24.6 |
Weighted average expected life | 6 months | 9 months 18 days |
Structured finance | AA | ||
Hybrid instruments disclosures | ||
Amortized cost | $ 10.3 | $ 14.1 |
Carrying value | $ 10.3 | $ 14.1 |
Weighted average expected life | 6 months | 7 months 6 days |
Structured finance | BBB | ||
Hybrid instruments disclosures | ||
Amortized cost | $ 3.5 | |
Carrying value | $ 3.5 | |
Weighted average expected life | 9 months 18 days | |
Structured finance | BB | ||
Hybrid instruments disclosures | ||
Amortized cost | $ 2.3 | |
Carrying value | $ 2.3 | |
Weighted average expected life | 9 months 18 days | |
Structured finance | CCC | ||
Hybrid instruments disclosures | ||
Amortized cost | $ 4.7 | |
Carrying value | $ 4.7 | |
Weighted average expected life | 1 year 2 months 12 days |
Derivative Financial Instrume60
Derivative Financial Instruments - Fair Value Hedges (Details) - Fair Value Hedges - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | $ 1.3 | $ (5) |
Amount of gain (loss) recognized in net income on related hedged item | (1.4) | 5.1 |
Gain (loss) on periodic settlements on interest rate and foreign exchange contracts in fair value hedge of fixed maturities, available-for-sale reported in net investment income | (3.2) | (13.1) |
Gain (loss) on periodic settlements on interest rate and foreign exchange contracts in fair value hedge of investment contracts reported in benefits, claims and settlement expenses | 0.4 | 0.7 |
Interest rate contracts | Fixed maturities, available-for-sale | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | 2 | (7.9) |
Amount of gain (loss) recognized in net income on related hedged item | (2) | 7.9 |
Interest rate contracts | Investment contracts | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | (0.7) | 2.9 |
Amount of gain (loss) recognized in net income on related hedged item | $ 0.6 | $ (2.8) |
Derivative Financial Instrume61
Derivative Financial Instruments - Cash Flow Hedges (Details) - Cash Flow Hedges - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Maximum length of time hedging exposure to variability in future cash flows for forecasted transactions | 3 years 2 months 12 days | |
Gross unrealized gains (losses) reported in accumulated OCI related to active hedges of forecasted transactions | $ 11.8 | |
Gross unrealized gains (losses) reclassified from accumulated OCI into net income due to forecasted transaction probable of not occurring | 0 | $ 0 |
Amount of gain (loss) recognized in accumulated OCI on derivatives (effective portion) | (52.5) | 26.9 |
Amount of gain (loss) reclassified from accumulated OCI on derivatives (effective portion) | 12.5 | 3 |
Gain (loss) on periodic settlements on interest rate and foreign exchange contracts in cash flow hedge of fixed maturities, available-for-sale reported in net investment income | 1.8 | 1.5 |
Gain (loss) on periodic settlements on interest rate and foreign exchange contracts in cash flow hedge of investment contracts reported in benefits, claims and settlement expenses | (0.8) | (5) |
Net gains (losses) expected to be reclassified from accumulated OCI into net income in the next 12 months | 15.7 | |
Interest rate contracts | Fixed maturities, available-for-sale | Net investment income | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in accumulated OCI on derivatives (effective portion) | (32.3) | 28.6 |
Amount of gain (loss) reclassified from accumulated OCI on derivatives (effective portion) | 5.2 | 4.6 |
Interest rate contracts | Fixed maturities, available-for-sale | Net realized capital gains (losses) | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) reclassified from accumulated OCI on derivatives (effective portion) | (0.7) | |
Interest rate contracts | Investment contracts | Benefits, claims and settlement expenses | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in accumulated OCI on derivatives (effective portion) | 1.1 | |
Interest rate contracts | Hedged debt | Operating expense | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) reclassified from accumulated OCI on derivatives (effective portion) | (2.6) | (2.2) |
Foreign exchange contracts | Net realized capital gains (losses) | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Gain (loss) resulting from the ineffective portion in cash flow hedging relationships | 0 | 0 |
Foreign exchange contracts | Fixed maturities, available-for-sale | Net realized capital gains (losses) | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in accumulated OCI on derivatives (effective portion) | (20.2) | (5.4) |
Amount of gain (loss) reclassified from accumulated OCI on derivatives (effective portion) | $ 10.6 | 0.6 |
Foreign exchange contracts | Investment contracts | Benefits, claims and settlement expenses | ||
Effect of derivatives in hedging relationships and the related hedged items on the consolidated statements of operations | ||
Amount of gain (loss) recognized in accumulated OCI on derivatives (effective portion) | $ 2.6 |
Derivative Financial Instrume62
Derivative Financial Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | $ (15.5) | $ 204.9 |
Interest rate contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | (24.8) | 187.7 |
Foreign exchange contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | 11.1 | 27.6 |
Equity contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | (64.4) | 8.5 |
Credit contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | 7.8 | 18.8 |
Other contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | $ 54.8 | $ (37.7) |
Insurance Liabilities (Details)
Insurance Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Change in unpaid claims | ||
Balance at beginning of period, unpaid claims | $ 2,001.3 | $ 1,872.2 |
Balance at beginning of period, reinsurance recoverables for unpaid claims | 340.3 | 314.1 |
Net balance at beginning of period, unpaid claims | 1,661 | 1,558.1 |
Incurred: | ||
Incurred: Current year | 301 | 280.7 |
Incurred: Prior years | 11.3 | 6.5 |
Total incurred | 312.3 | 287.2 |
Payments: | ||
Payments: Current year | 140.4 | 127.2 |
Payments: Prior years | 143.9 | 130.2 |
Total payments | 284.3 | 257.4 |
Net balance at end of period, unpaid claims | 1,689 | 1,587.9 |
Balance at end of period, reinsurance recoverables for unpaid claims | 345.9 | 323.8 |
Balance at end of period, unpaid claims | 2,034.9 | 1,911.7 |
Amount not included in the rollforward above: | ||
Claim adjustment expense liabilities | $ 50 | $ 59.9 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reconciliation between the U.S. corporate income tax rate and the effective income tax rate from continuing operations | ||
U.S. corporate statutory income tax rate (as a percent) | 35.00% | 35.00% |
Dividends received deduction (as a percent) | (10.00%) | (9.00%) |
Impact of equity method presentation (as a percent) | (4.00%) | (2.00%) |
Tax credits (as a percent) | (3.00%) | (2.00%) |
Merger of Brazilian legal entities (as a percent) | (3.00%) | |
Other income tax rate impacts (as a percent) | (3.00%) | (3.00%) |
Effective income tax rate (as a percent) | 15.00% | 16.00% |
Employee and Agent Benefits (De
Employee and Agent Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Contributions | ||
Contributions made by employer to fund qualified and nonqualified pension plans | $ 35.2 | |
Pension benefits | ||
Components of Net Periodic Benefit Cost (Income) | ||
Service cost | 16.8 | $ 16.2 |
Interest cost | 31.1 | 33.7 |
Expected return on plan assets | (36) | (38.7) |
Amortization of prior service (benefit) cost | (0.6) | (0.6) |
Recognized net actuarial (gain) loss | 17 | 19.3 |
Net periodic benefit cost (income) | 28.3 | 29.9 |
Pension benefits | Maximum | ||
Contributions | ||
Amount of possible contributions to be made during the current fiscal year to the qualified and nonqualified pension plans combined | 125 | |
Other postretirement benefits | ||
Components of Net Periodic Benefit Cost (Income) | ||
Service cost | 0.6 | |
Interest cost | 1 | 1.7 |
Expected return on plan assets | (6.9) | (8.1) |
Amortization of prior service (benefit) cost | (8.6) | (5.1) |
Recognized net actuarial (gain) loss | 0.1 | |
Net periodic benefit cost (income) | $ (14.5) | $ (10.8) |
Contingencies, Guarantees and66
Contingencies, Guarantees and Indemnifications (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2008 | Mar. 31, 2017 | |
Loss contingencies - disclosures | ||
Proceeds from termination of certain structured transactions and the resulting prepayment | $ 440 | |
Amount, including interest, attempted to be recovered | $ 600 | |
Estimated losses accrued related to legal matters | 0 | |
Maximum exposure under guarantees | $ 142 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Outstanding Shares (Details) - Common stock - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 29, 2016 | Oct. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Reconciliation of Outstanding Shares | ||||
Outstanding shares at beginning of period | 287.7 | 291.4 | ||
Shares issued | 2.7 | 1.9 | ||
Treasury stock acquired | (2.3) | (2.9) | ||
Outstanding shares at end of period | 288.1 | 290.4 | ||
Common stock share repurchase disclosures | ||||
Share repurchase program, maximum authorized amount (in dollars) | $ 400 | $ 150 |
Stockholders' Equity - Other Co
Stockholders' Equity - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | $ 310.5 | $ 766.3 |
Other comprehensive income (loss), tax | (89.4) | (227.1) |
Other comprehensive income (loss) | 221.1 | 539.2 |
Net unrealized gains (losses) on available-for-sale securities including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss) before reclassifications, pre-tax | 303.7 | 911.9 |
Adjustments for assumed changes in amortization patterns, pre-tax | (15.6) | (56.1) |
Adjustments for assumed changes in policyholder liabilities, pre-tax | (78.6) | (293.1) |
Other comprehensive income (loss), pre-tax | 252.2 | 618 |
Other comprehensive income (loss) before reclassifications, tax | (102.8) | (312.9) |
Reclassification from accumulated other comprehensive income, tax | (14.9) | (19.4) |
Adjustments for assumed changes in amortization patterns, tax | 5.4 | 19.6 |
Adjustments for assumed changes in policyholder liabilities, tax | 24 | 99.1 |
Other comprehensive income (loss), tax | (88.3) | (213.6) |
Other comprehensive income (loss) before reclassifications, after-tax | 200.9 | 599 |
Reclassification from accumulated other comprehensive income, after-tax | 27.8 | 35.9 |
Adjustments for assumed changes in amortization patterns, after-tax | (10.2) | (36.5) |
Adjustments for assumed changes in policyholder liabilities, after-tax | (54.6) | (194) |
Other comprehensive income (loss) | 163.9 | 404.4 |
Net unrealized gains (losses) on available-for-sale securities including NCI | Net realized capital gains (losses) | ||
Other Comprehensive Income (Loss) | ||
Reclassification from accumulated other comprehensive income, pre-tax | 42.7 | 55.3 |
Noncredit component of impairment losses on fixed maturities available-for-sale including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss) before reclassifications, pre-tax | 1.5 | (7.5) |
Adjustments for assumed changes in amortization patterns, pre-tax | (0.2) | 0.8 |
Adjustments for assumed changes in policyholder liabilities, pre-tax | (0.3) | 0.1 |
Other comprehensive income (loss), pre-tax | 1 | (6.6) |
Other comprehensive income (loss) before reclassifications, tax | (0.5) | 2.6 |
Adjustments for assumed changes in amortization patterns, tax | 0.1 | (0.2) |
Adjustments for assumed changes in policyholder liabilities, tax | 0.1 | |
Other comprehensive income (loss), tax | (0.3) | 2.4 |
Other comprehensive income (loss) before reclassifications, after-tax | 1 | (4.9) |
Adjustments for assumed changes in amortization patterns, after-tax | (0.1) | 0.6 |
Adjustments for assumed changes in policyholder liabilities, after-tax | (0.2) | 0.1 |
Other comprehensive income (loss) | 0.7 | (4.2) |
Net unrealized gains (losses) on derivative instruments including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss) before reclassifications, pre-tax | (10.4) | 5.7 |
Reclassification from accumulated other comprehensive income, pre-tax | (12.5) | (3) |
Adjustments for assumed changes in amortization patterns, pre-tax | 1.5 | (1.4) |
Adjustments for assumed changes in policyholder liabilities, pre-tax | 2.9 | 1 |
Other comprehensive income (loss), pre-tax | (18.5) | 2.3 |
Other comprehensive income (loss) before reclassifications, tax | 3.2 | (2) |
Reclassification from accumulated other comprehensive income, tax | 4.5 | 0.9 |
Adjustments for assumed changes in amortization patterns, tax | (0.5) | 0.5 |
Adjustments for assumed changes in policyholder liabilities, tax | (0.9) | (0.4) |
Other comprehensive income (loss), tax | 6.3 | (1) |
Other comprehensive income (loss) before reclassifications, after-tax | (7.2) | 3.7 |
Reclassification from accumulated other comprehensive income, after-tax | (8) | (2.1) |
Adjustments for assumed changes in amortization patterns, after-tax | 1 | (0.9) |
Adjustments for assumed changes in policyholder liabilities, after-tax | 2 | 0.6 |
Other comprehensive income (loss) | (12.2) | 1.3 |
Foreign currency translation adjustment including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | 68 | 138.9 |
Other comprehensive income (loss), tax | (3.6) | (9.2) |
Other comprehensive income (loss) | 64.4 | 129.7 |
Unrecognized postretirement benefit obligation including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | 7.8 | 13.7 |
Reclassification from accumulated other comprehensive income, tax | (3.5) | (5.7) |
Other comprehensive income (loss), tax | (3.5) | (5.7) |
Reclassification from accumulated other comprehensive income, after-tax | 4.3 | 8 |
Other comprehensive income (loss) | 4.3 | 8 |
Unrecognized postretirement benefit obligation including NCI | Operating expense | ||
Other Comprehensive Income (Loss) | ||
Reclassification from accumulated other comprehensive income, pre-tax | $ 7.8 | $ 13.7 |
Stockholders' Equity - AOCI and
Stockholders' Equity - AOCI and Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | $ 10,227.3 | ||
Purchase of subsidiary shares from noncontrolling interest | [1] | $ 5.8 | |
Balances | 10,616.1 | ||
Change in redeemable noncontrolling interest rollforward | |||
Redeemable noncontrolling interest, balance at beginning of period | 97.5 | 85.7 | |
Net income (loss) attributable to redeemable noncontrolling interest | 2.8 | (0.2) | |
Redeemable noncontrolling interest of newly consolidated entities | 179.5 | ||
Redeemable noncontrolling interest of deconsolidated entities | (1.5) | ||
Contributions from redeemable noncontrolling interest | 4.7 | 22.1 | |
Distributions to redeemable noncontrolling interest | (9.5) | (17.1) | |
Purchase of subsidiary shares from redeemable noncontrolling interest | (8.1) | ||
Change in redemption value of redeemable noncontrolling interest | 0.5 | (3.1) | |
Other comprehensive income (loss) attributable to redeemable noncontrolling interest | 0.6 | 2.1 | |
Redeemable noncontrolling interest, balance at end of period | 95.1 | 260.9 | |
Accumulated other comprehensive income (loss) | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (675.2) | (882.5) | |
Other comprehensive income (loss) during the period, net of adjustments | 195.3 | 493.9 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 24.8 | 41.8 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 220.1 | 535.7 | |
Purchase of subsidiary shares from noncontrolling interest | [1] | (9.3) | |
Balances | (455.1) | (356.1) | |
Net unrealized gains (losses) on available-for-sale securities | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 831.2 | 732.1 | |
Other comprehensive income (loss) during the period, net of adjustments | 136.1 | 368.5 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 27.8 | 35.9 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 163.9 | 404.4 | |
Balances | 995.1 | 1,136.5 | |
Noncredit component of impairment losses on fixed maturities available-for-sale | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (89.5) | (86) | |
Other comprehensive income (loss) during the period, net of adjustments | (4.2) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0.7 | ||
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 0.7 | (4.2) | |
Balances | (88.8) | (90.2) | |
Net unrealized gains (losses) on derivative instruments | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | 85.3 | 69.8 | |
Other comprehensive income (loss) during the period, net of adjustments | (4.2) | 3.4 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (8) | (2.1) | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (12.2) | 1.3 | |
Balances | 73.1 | 71.1 | |
Foreign currency translation adjustment | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (1,093.8) | (1,148.2) | |
Other comprehensive income (loss) during the period, net of adjustments | 63.4 | 126.2 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 63.4 | 126.2 | |
Purchase of subsidiary shares from noncontrolling interest | (9.3) | ||
Balances | (1,030.4) | (1,031.3) | |
Unrecognized postretirement benefit obligation | |||
Change in accumulated other comprehensive income (loss) rollforward | |||
Balances | (408.4) | (450.2) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 4.3 | 8 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 4.3 | 8 | |
Balances | $ (404.1) | $ (442.2) | |
[1] | Excludes amounts attributable to redeemable noncontrolling interest. See Note 9, Stockholders’ Equity, for further details. |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets (liabilities) measured at fair value on a recurring basis | ||
Derivative instruments, assets | $ 318.1 | $ 893.6 |
Separate account assets | 146,374.7 | 139,832.6 |
Investment contracts | (119.6) | (176.5) |
Unfunded commitments of investments measured using NAV | $ 56.5 | 57.6 |
Fixed maturities valued using internal pricing models | ||
Fixed maturities classified as Level 3 assets, percent valued using internal pricing models (as a percent) | 1.00% | |
Fixed maturities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | $ 56,989.1 | 54,846.1 |
U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 1,438.2 | 1,433 |
Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 1,004.8 | 893.6 |
States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,999.5 | 5,569.2 |
Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 35,565.5 | 34,192.4 |
Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 2,839.9 | 2,834.7 |
Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 3,862.9 | 4,096.5 |
Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 987.9 | 758.6 |
Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,290.4 | 5,068.1 |
Equity securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 114 | 98.9 |
Recurring Fair Value Measurements | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Derivative instruments, assets | 318.1 | 893.6 |
Other investments | 545.2 | 470 |
Other investments net asset value | 93.3 | 92.7 |
Cash equivalents | 989.6 | 1,947.1 |
Sub-total excluding separate account assets | 60,740.3 | 60,067.5 |
Sub-total excluding separate account assets net asset value | 93.3 | 92.7 |
Separate account assets | 146,374.7 | 139,832.6 |
Total assets | 207,115 | 199,900.1 |
Total assets net asset value | 93.3 | 92.7 |
Investment contracts | (119.6) | (176.5) |
Derivative liabilities | (291.7) | (573) |
Other liabilities | (224.5) | (272.2) |
Total liabilities | (635.8) | (1,021.7) |
Net assets (liabilities) | 206,479.2 | 198,878.4 |
Net assets (liabilities) net asset value | 93.3 | 92.7 |
Recurring Fair Value Measurements | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Other investments | 226.3 | 169.8 |
Cash equivalents | 56.8 | 51.2 |
Sub-total excluding separate account assets | 1,779.9 | 1,742.6 |
Separate account assets | 83,140.8 | 79,688.1 |
Total assets | 84,920.7 | 81,430.7 |
Net assets (liabilities) | 84,920.7 | 81,430.7 |
Recurring Fair Value Measurements | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Derivative instruments, assets | 287.3 | 859.7 |
Other investments | 187.3 | 170.6 |
Cash equivalents | 932.8 | 1,895.9 |
Sub-total excluding separate account assets | 58,396.2 | 57,548.4 |
Separate account assets | 55,976.3 | 52,789.7 |
Total assets | 114,372.5 | 110,338.1 |
Derivative liabilities | (273.6) | (550.4) |
Other liabilities | (224.5) | (212.3) |
Total liabilities | (498.1) | (762.7) |
Net assets (liabilities) | 113,874.4 | 109,575.4 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Derivative instruments, assets | 30.8 | 33.9 |
Other investments | 38.3 | 36.9 |
Sub-total excluding separate account assets | 470.9 | 683.8 |
Separate account assets | 7,257.6 | 7,354.8 |
Total assets | 7,728.5 | 8,038.6 |
Investment contracts | (119.6) | (176.5) |
Derivative liabilities | (18.1) | (22.6) |
Other liabilities | (59.9) | |
Total liabilities | (137.7) | (259) |
Net assets (liabilities) | 7,590.8 | 7,779.6 |
Recurring Fair Value Measurements | Fixed maturities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 56,989.1 | 54,846.1 |
Trading | 278 | 398.4 |
Recurring Fair Value Measurements | Fixed maturities | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 962.1 | 1,020.7 |
Recurring Fair Value Measurements | Fixed maturities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 55,628.5 | 53,308 |
Trading | 278 | 305.5 |
Recurring Fair Value Measurements | Fixed maturities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 398.5 | 517.4 |
Trading | 92.9 | |
Recurring Fair Value Measurements | U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 1,438.2 | 1,433 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 938 | 996.5 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 500.2 | 436.5 |
Recurring Fair Value Measurements | Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 1,004.8 | 893.6 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 3 | 3 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 935.3 | 828.5 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 66.5 | 62.1 |
Recurring Fair Value Measurements | States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,999.5 | 5,569.2 |
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,999.5 | 5,569.2 |
Recurring Fair Value Measurements | Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 35,565.5 | 34,192.4 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 21.1 | 21.2 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 35,309.1 | 33,912.1 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 235.3 | 259.1 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 2,839.9 | 2,834.7 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 2,839.9 | 2,834.7 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 3,862.9 | 4,096.5 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 3,800.2 | 4,025.4 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 62.7 | 71.1 |
Recurring Fair Value Measurements | Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 987.9 | 758.6 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 960.4 | 725 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 27.5 | 33.6 |
Recurring Fair Value Measurements | Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,290.4 | 5,068.1 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 5,283.9 | 4,976.6 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 6.5 | 91.5 |
Recurring Fair Value Measurements | Equity securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 114 | 98.9 |
Trading | 1,506.3 | 1,413.4 |
Recurring Fair Value Measurements | Equity securities | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 68.6 | 55.2 |
Trading | 466.1 | 445.7 |
Recurring Fair Value Measurements | Equity securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 42.7 | 41 |
Trading | 1,039.6 | 967.7 |
Recurring Fair Value Measurements | Equity securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Available-for-sale | 2.7 | $ 2.7 |
Trading | $ 0.6 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Fair Value Measurements (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Available-for-sale | Fixed maturities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | $ 517.4 | $ 378.8 |
Total realized/unrealized gains (losses) included in net income, assets | (3.2) | (0.2) |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 2.7 | (0.9) |
Net purchases, sales, issuances and settlements, assets | (29.5) | 19 |
Transfers into Level 3, assets | 5.3 | |
Transfers out of Level 3, assets | (94.2) | (4) |
Ending balance, assets | 398.5 | 392.7 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (1.5) | (0.2) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 39.8 | 40.6 |
Sales, assets | (55.1) | (9.3) |
Settlements, assets | (14.2) | (12.3) |
Net purchases, sales, issuances and settlements, assets | (29.5) | 19 |
Available-for-sale | Non-U.S. governments | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 62.1 | 79.1 |
Total realized/unrealized gains (losses) included in net income, assets | (0.1) | (0.1) |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 0.3 | 2.5 |
Net purchases, sales, issuances and settlements, assets | 4.2 | 16.3 |
Ending balance, assets | 66.5 | 97.8 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (0.1) | (0.1) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 21.8 | 16.7 |
Sales, assets | (17.3) | |
Settlements, assets | (0.3) | (0.4) |
Net purchases, sales, issuances and settlements, assets | 4.2 | 16.3 |
Available-for-sale | Corporate debt securities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 259.1 | 223.9 |
Total realized/unrealized gains (losses) included in net income, assets | (1.8) | (0.1) |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 0.4 | (2.6) |
Net purchases, sales, issuances and settlements, assets | (27) | 3.2 |
Transfers into Level 3, assets | 4.6 | |
Transfers out of Level 3, assets | (1.7) | |
Ending balance, assets | 235.3 | 222.7 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (0.2) | (0.1) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 18 | 23.9 |
Sales, assets | (37.8) | (9.3) |
Settlements, assets | (7.2) | (11.4) |
Net purchases, sales, issuances and settlements, assets | (27) | 3.2 |
Available-for-sale | Commercial mortgage-backed securities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 71.1 | 4.8 |
Total realized/unrealized gains (losses) included in net income, assets | (1.2) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 2.6 | |
Net purchases, sales, issuances and settlements, assets | (1) | (0.1) |
Transfers into Level 3, assets | 0.7 | |
Transfers out of Level 3, assets | (9.5) | (2.3) |
Ending balance, assets | 62.7 | 2.4 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (1.2) | |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (1) | (0.1) |
Net purchases, sales, issuances and settlements, assets | (1) | (0.1) |
Available-for-sale | Collateralized debt obligations | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 33.6 | 63.5 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (0.7) | (0.7) |
Net purchases, sales, issuances and settlements, assets | (5.4) | |
Ending balance, assets | 27.5 | 62.8 |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (5.4) | |
Net purchases, sales, issuances and settlements, assets | (5.4) | |
Available-for-sale | Other debt obligations | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 91.5 | 7.5 |
Total realized/unrealized gains (losses) included in net income, assets | (0.1) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 0.1 | (0.1) |
Net purchases, sales, issuances and settlements, assets | (0.3) | (0.4) |
Transfers out of Level 3, assets | (84.7) | |
Ending balance, assets | 6.5 | 7 |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (0.3) | (0.4) |
Net purchases, sales, issuances and settlements, assets | (0.3) | (0.4) |
Available-for-sale | Equity securities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 2.7 | 4.1 |
Ending balance, assets | 2.7 | 4.1 |
Trading | Fixed maturities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 92.9 | 135.5 |
Total realized/unrealized gains (losses) included in net income, assets | (2.4) | 0.3 |
Net purchases, sales, issuances and settlements, assets | (92.4) | |
Transfers into Level 3, assets | 1.9 | |
Ending balance, assets | 135.8 | |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (2.4) | 0.3 |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (92.4) | |
Net purchases, sales, issuances and settlements, assets | (92.4) | |
Trading | Equity securities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Total realized/unrealized gains (losses) included in net income, assets | (0.1) | |
Transfers into Level 3, assets | 0.7 | |
Ending balance, assets | 0.6 | |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (0.1) | |
Derivative assets | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 33.9 | 47.2 |
Total realized/unrealized gains (losses) included in net income, assets | (3.2) | 11.5 |
Net purchases, sales, issuances and settlements, assets | 0.1 | 0.4 |
Ending balance, assets | 30.8 | 59.1 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (3.1) | 11.4 |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 0.3 | |
Sales, assets | (0.2) | 0.4 |
Net purchases, sales, issuances and settlements, assets | 0.1 | 0.4 |
Other investments | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 36.9 | 35.1 |
Total realized/unrealized gains (losses) included in net income, assets | 1.2 | 0.6 |
Net purchases, sales, issuances and settlements, assets | 0.2 | 0.2 |
Ending balance, assets | 38.3 | 35.9 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | 1.2 | 0.5 |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 0.2 | 0.2 |
Net purchases, sales, issuances and settlements, assets | 0.2 | 0.2 |
Separate account assets | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 7,354.8 | 7,013.9 |
Total realized/unrealized gains (losses) included in net income, assets | 163.8 | 152.9 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (0.3) | (0.1) |
Net purchases, sales, issuances and settlements, assets | (259.8) | (73) |
Transfers into Level 3, assets | 0.8 | |
Transfers out of Level 3, assets | (0.9) | |
Ending balance, assets | 7,257.6 | 7,094.5 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | 167.7 | 147.6 |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 58.6 | 56.2 |
Sales, assets | (310.5) | (60.7) |
Issuances, assets | (71.3) | (92.8) |
Settlements, assets | 63.4 | 24.3 |
Net purchases, sales, issuances and settlements, assets | (259.8) | (73) |
Investment contracts | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, liabilities | (176.5) | (177.4) |
Total realized/unrealized gains (losses) included in net income, liabilities | 52.6 | (38.3) |
Total realized/unrealized gains (losses) included in other comprehensive income, liabilities | 0.1 | |
Net purchases, sales, issuances and settlements, liabilities | 4.2 | 2.7 |
Ending balance, liabilities | (119.6) | (213) |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | 51.6 | (38.9) |
Gross purchases, sales, issuances and settlements | ||
Issuances, liabilities | 0.2 | 1.1 |
Settlements, liabilities | 4 | 1.6 |
Net purchases, sales, issuances and settlements, liabilities | 4.2 | 2.7 |
Derivative liabilities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, liabilities | (22.6) | (50.5) |
Total realized/unrealized gains (losses) included in net income, liabilities | 4.6 | 13.6 |
Total realized/unrealized gains (losses) included in other comprehensive income, liabilities | 0.5 | |
Net purchases, sales, issuances and settlements, liabilities | (0.1) | 0.3 |
Ending balance, liabilities | (18.1) | (36.1) |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | 3.1 | 13.6 |
Gross purchases, sales, issuances and settlements | ||
Purchases, liabilities | (0.2) | |
Sales, liabilities | 0.1 | 0.3 |
Net purchases, sales, issuances and settlements, liabilities | (0.1) | 0.3 |
Other liabilities | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, liabilities | (59.9) | (68.1) |
Total realized/unrealized gains (losses) included in net income, liabilities | (0.1) | (5) |
Net purchases, sales, issuances and settlements, liabilities | 60 | |
Ending balance, liabilities | (73.1) | |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | $ (5) | |
Gross purchases, sales, issuances and settlements | ||
Settlements, liabilities | 60 | |
Net purchases, sales, issuances and settlements, liabilities | $ 60 |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Available-for-sale | Fixed maturities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | $ 5.3 | |
Transfers out of Level 3 into Level 2 | 94.2 | $ 4 |
Available-for-sale | Corporate debt securities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | 4.6 | |
Transfers out of Level 3 into Level 2 | 1.7 | |
Available-for-sale | Commercial mortgage-backed securities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | 0.7 | |
Transfers out of Level 3 into Level 2 | 9.5 | 2.3 |
Available-for-sale | Other debt obligations | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 3 into Level 2 | 84.7 | |
Trading | Fixed maturities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | 1.9 | |
Trading | Equity securities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | 0.7 | |
Separate account assets | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 1 into Level 2 | 0.7 | 26.2 |
Transfers out of Level 2 into Level 1 | 4.5 | |
Transfers out of Level 2 into Level 3 | $ 0.8 | |
Transfers out of Level 3 into Level 2 | $ 0.9 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information for Level 3 Measurements (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Unobservable inputs | ||
Assets measured at fair value | $ 207,115 | $ 199,900.1 |
Liabilities measured at fair value | (635.8) | (1,021.7) |
Fair value hierarchy Level 3 | ||
Unobservable inputs | ||
Assets measured at fair value | 7,728.5 | 8,038.6 |
Liabilities measured at fair value | (137.7) | (259) |
Fair value hierarchy Level 3 | Available-for-sale | Non-U.S. governments | ||
Unobservable inputs | ||
Assets measured at fair value | $ 7.2 | $ 7.6 |
Fair value hierarchy Level 3 | Available-for-sale | Non-U.S. governments | Discounted cash flow | ||
Unobservable inputs | ||
Discount rate (as a percent) | 2.40% | 2.30% |
Illiquidity premium (as a percent) | 0.50% | 0.50% |
Comparability adjustment (as a percent) | (0.25%) | (0.25%) |
Fair value hierarchy Level 3 | Available-for-sale | Non-U.S. governments | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 2.40% | 2.30% |
Illiquidity premium (as a percent) | 0.50% | 0.50% |
Comparability adjustment (as a percent) | (0.25%) | (0.25%) |
Fair value hierarchy Level 3 | Available-for-sale | Corporate debt securities | ||
Unobservable inputs | ||
Assets measured at fair value | $ 52.3 | $ 49.8 |
Fair value hierarchy Level 3 | Available-for-sale | Corporate debt securities | Discounted cash flow | Minimum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 0.90% | 1.50% |
Illiquidity premium (as a percent) | 0.00% | 0.00% |
Comparability adjustment (as a percent) | 0.00% | 0.00% |
Fair value hierarchy Level 3 | Available-for-sale | Corporate debt securities | Discounted cash flow | Maximum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 7.40% | 7.60% |
Illiquidity premium (as a percent) | 0.60% | 0.60% |
Comparability adjustment (as a percent) | 0.80% | 0.20% |
Fair value hierarchy Level 3 | Available-for-sale | Corporate debt securities | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 3.80% | 4.00% |
Illiquidity premium (as a percent) | 0.27% | 0.27% |
Comparability adjustment (as a percent) | 0.20% | 0.06% |
Fair value hierarchy Level 3 | Available-for-sale | Commercial mortgage-backed securities | ||
Unobservable inputs | ||
Assets measured at fair value | $ 43.1 | $ 49.3 |
Fair value hierarchy Level 3 | Available-for-sale | Commercial mortgage-backed securities | Discounted cash flow | Minimum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 2.60% | 3.10% |
Probability of default (as a percent) | 0.00% | 0.00% |
Potential loss severity (as a percent) | 0.00% | 0.00% |
Fair value hierarchy Level 3 | Available-for-sale | Commercial mortgage-backed securities | Discounted cash flow | Maximum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 14.80% | 12.80% |
Probability of default (as a percent) | 10.00% | 10.00% |
Potential loss severity (as a percent) | 98.00% | 99.50% |
Fair value hierarchy Level 3 | Available-for-sale | Commercial mortgage-backed securities | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 9.90% | 10.20% |
Probability of default (as a percent) | 7.00% | 7.80% |
Potential loss severity (as a percent) | 36.60% | 39.50% |
Fair value hierarchy Level 3 | Available-for-sale | Collateralized debt obligations | ||
Unobservable inputs | ||
Assets measured at fair value | $ 0.2 | |
Fair value hierarchy Level 3 | Available-for-sale | Collateralized debt obligations | Discounted cash flow | ||
Unobservable inputs | ||
Discount rate (as a percent) | 95.10% | |
Probability of default (as a percent) | 100.00% | |
Potential loss severity (as a percent) | 91.20% | |
Fair value hierarchy Level 3 | Available-for-sale | Collateralized debt obligations | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 95.10% | |
Probability of default (as a percent) | 100.00% | |
Potential loss severity (as a percent) | 91.20% | |
Fair value hierarchy Level 3 | Available-for-sale | Other debt obligations | ||
Unobservable inputs | ||
Assets measured at fair value | $ 6.5 | $ 6.8 |
Fair value hierarchy Level 3 | Available-for-sale | Other debt obligations | Discounted cash flow | ||
Unobservable inputs | ||
Discount rate (as a percent) | 5.00% | 5.00% |
Illiquidity premium (as a percent) | 5.00% | 5.00% |
Fair value hierarchy Level 3 | Available-for-sale | Other debt obligations | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 5.00% | 5.00% |
Illiquidity premium (as a percent) | 5.00% | 5.00% |
Fair value hierarchy Level 3 | Trading | Fixed maturities | ||
Unobservable inputs | ||
Assets measured at fair value | $ 10.5 | |
Fair value hierarchy Level 3 | Trading | Fixed maturities | Discounted cash flow | Minimum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 2.30% | |
Illiquidity premium (as a percent) | 0.00% | |
Fair value hierarchy Level 3 | Trading | Fixed maturities | Discounted cash flow | Maximum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 9.00% | |
Illiquidity premium (as a percent) | 3.00% | |
Fair value hierarchy Level 3 | Trading | Fixed maturities | Discounted cash flow | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 2.70% | |
Illiquidity premium (as a percent) | 2.40% | |
Fair value hierarchy Level 3 | Other investments | ||
Unobservable inputs | ||
Assets measured at fair value | $ 38.3 | $ 36.9 |
Fair value hierarchy Level 3 | Other investments | Discounted cash flow, equity method real estate investment | ||
Unobservable inputs | ||
Discount rate (as a percent) | 7.50% | 7.60% |
Terminal capitalization rate (as a percent) | 6.80% | 6.80% |
Average market rent growth rate (as a percent) | 2.70% | 2.90% |
Fair value hierarchy Level 3 | Other investments | Discounted cash flow, equity method real estate investment | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 7.50% | 7.60% |
Terminal capitalization rate (as a percent) | 6.80% | 6.80% |
Average market rent growth rate (as a percent) | 2.70% | 2.90% |
Fair value hierarchy Level 3 | Other investments | Discounted cash flow, equity method real estate investment debt | ||
Unobservable inputs | ||
Loan to value (as a percent) | 49.90% | 52.50% |
Credit spread rate (as a percent) | 2.00% | 2.10% |
Fair value hierarchy Level 3 | Other investments | Discounted cash flow, equity method real estate investment debt | Weighted average input | ||
Unobservable inputs | ||
Loan to value (as a percent) | 49.90% | 52.50% |
Credit spread rate (as a percent) | 2.00% | 2.10% |
Fair value hierarchy Level 3 | Separate account assets | ||
Unobservable inputs | ||
Assets measured at fair value | $ 7,100.8 | $ 7,225.4 |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Minimum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 1.60% | 1.40% |
Illiquidity premium (as a percent) | 0.00% | 0.00% |
Credit spread rate (as a percent) | 0.72% | 0.83% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Maximum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 5.90% | 5.30% |
Illiquidity premium (as a percent) | 0.60% | 0.60% |
Credit spread rate (as a percent) | 5.02% | 4.72% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, mortgage loans | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 3.90% | 3.70% |
Illiquidity premium (as a percent) | 0.13% | 0.13% |
Credit spread rate (as a percent) | 2.24% | 2.27% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Minimum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 5.80% | 5.80% |
Terminal capitalization rate (as a percent) | 4.30% | 4.30% |
Average market rent growth rate (as a percent) | 1.90% | 1.80% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Maximum | ||
Unobservable inputs | ||
Discount rate (as a percent) | 17.20% | 16.20% |
Terminal capitalization rate (as a percent) | 9.30% | 9.30% |
Average market rent growth rate (as a percent) | 4.40% | 4.30% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Weighted average input | ||
Unobservable inputs | ||
Discount rate (as a percent) | 6.90% | 7.00% |
Terminal capitalization rate (as a percent) | 6.00% | 6.10% |
Average market rent growth rate (as a percent) | 2.90% | 2.90% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Minimum | ||
Unobservable inputs | ||
Loan to value (as a percent) | 11.80% | 6.30% |
Credit spread rate (as a percent) | 3.20% | 3.30% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Maximum | ||
Unobservable inputs | ||
Loan to value (as a percent) | 68.00% | 69.70% |
Credit spread rate (as a percent) | 5.20% | 4.60% |
Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Weighted average input | ||
Unobservable inputs | ||
Loan to value (as a percent) | 46.30% | 47.00% |
Credit spread rate (as a percent) | 3.80% | 3.90% |
Fair value hierarchy Level 3 | Investment contracts | ||
Unobservable inputs | ||
Liabilities measured at fair value | $ (119.6) | $ (176.5) |
Fair value hierarchy Level 3 | Investment contracts | Discounted cash flow | Minimum | ||
Unobservable inputs | ||
Long duration interest rate (as a percent) | 2.60% | 2.60% |
Long-term equity market volatility (as a percent) | 15.00% | 16.00% |
Non-performance risk (as a percent) | 0.30% | 0.30% |
Lapse rate (as a percent) | 0.50% | 0.50% |
Fair value hierarchy Level 3 | Investment contracts | Discounted cash flow | Maximum | ||
Unobservable inputs | ||
Long duration interest rate (as a percent) | 2.70% | 2.70% |
Long-term equity market volatility (as a percent) | 43.50% | 45.90% |
Non-performance risk (as a percent) | 1.60% | 1.70% |
Lapse rate (as a percent) | 14.10% | 14.10% |
Fair Value Measurements - Ass74
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Nonrecurring Basis (Details) - Nonrecurring Fair Value Measurements - Fair value hierarchy Level 3 - Mortgage loans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Assets and liabilities measured at fair value on a nonrecurring basis | ||
Fair value of assets measured on nonrecurring basis | $ 1.1 | $ 0.5 |
Net realized capital gains (losses) | ||
Assets and liabilities measured at fair value on a nonrecurring basis | ||
Net (gain) loss due to change in fair value of assets measured on nonrecurring basis | $ 0.3 | $ 0.1 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Option on Consolidated VIEs and Equity Method Investments (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)item | |
Commercial Mortgage Loans of Consolidated VIEs | |||
Fair Value Option, Quantitative Disclosures | |||
Fair value of assets for which fair value option was elected | $ 11.5 | $ 12.4 | |
Contractual principal amounts of assets for which the fair value option was elected | $ 11.1 | $ 12 | |
Number of loans which are more than 90 days past due or in nonaccrual status | item | 0 | 0 | |
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected | $ (0.1) | $ (0.2) | |
Interest income | 0.2 | 0.3 | |
Obligations of Consolidated VIEs | |||
Fair Value Option, Quantitative Disclosures | |||
Fair value of liabilities for which the fair value option was elected | $ 59.9 | ||
Aggregate unpaid principal amounts of obligations for which the fair value option was elected | 60 | ||
Credit risk portion of pre-tax gain (loss) due to change in fair value of liabilities for which the fair value option was elected | (0.1) | (5) | |
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected | (0.1) | (5) | |
Interest expense | 0.3 | 0.3 | |
Real Estate Ventures | |||
Fair Value Option, Quantitative Disclosures | |||
Fair value of assets for which fair value option was elected | 38.3 | 36.9 | |
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected | 1.2 | 0.5 | |
Investment Funds | |||
Fair Value Option, Quantitative Disclosures | |||
Fair value of assets for which fair value option was elected | 37.6 | $ 36.9 | |
Pre-tax gain (loss) due to change in fair value of assets and liabilities for which the fair value option was elected | $ 1.2 | (0.3) | |
Dividend income | $ 0.3 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Not Reported at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Assets (liabilities) | ||
Mortgage loans | $ 13,388.1 | $ 13,230.2 |
Policy loans | 819.6 | 823.8 |
Short-term debt | (59.5) | (51.4) |
Long-term debt | (3,126.2) | (3,125.7) |
Carrying amount | ||
Assets (liabilities) | ||
Mortgage loans | 13,388.1 | 13,230.2 |
Policy loans | 819.6 | 823.8 |
Other investments | 266.3 | 230.3 |
Cash and cash equivalents not required to be reported at fair value | 545.1 | 772.5 |
Investment contracts | (31,219.3) | (31,089.4) |
Short-term debt | (59.5) | (51.4) |
Long-term debt | (3,126.2) | (3,125.7) |
Separate account liabilities | (133,618.1) | (127,452.1) |
Bank deposits | (2,206.6) | (2,199.8) |
Cash collateral payable | (136.1) | (575.7) |
Assets (liabilities) measured at fair value | ||
Assets (liabilities) | ||
Mortgage loans | 13,681.3 | 13,453.2 |
Policy loans | 1,001 | 1,011 |
Other investments | 272.6 | 236.8 |
Cash and cash equivalents not required to be reported at fair value | 545.1 | 772.5 |
Investment contracts | (30,754) | (30,622.6) |
Short-term debt | (59.5) | (51.4) |
Long-term debt | (3,286.8) | (3,242) |
Separate account liabilities | (132,410.5) | (126,282) |
Bank deposits | (2,203.3) | (2,204.1) |
Cash collateral payable | (136.1) | (575.7) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 1 | ||
Assets (liabilities) | ||
Cash and cash equivalents not required to be reported at fair value | 504.5 | 731.4 |
Bank deposits | (1,601.5) | (1,585.1) |
Cash collateral payable | (136.1) | (575.7) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 2 | ||
Assets (liabilities) | ||
Other investments | 190.6 | 157.7 |
Cash and cash equivalents not required to be reported at fair value | 40.6 | 41.1 |
Investment contracts | (5,398.6) | (5,400.8) |
Short-term debt | (59.5) | (51.4) |
Long-term debt | (3,286.8) | (3,242) |
Bank deposits | (601.8) | (619) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 3 | ||
Assets (liabilities) | ||
Mortgage loans | 13,681.3 | 13,453.2 |
Policy loans | 1,001 | 1,011 |
Other investments | 82 | 79.1 |
Investment contracts | (25,355.4) | (25,221.8) |
Separate account liabilities | $ (132,410.5) | $ (126,282) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Assets to Consolidated (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Segment Information: Assets | ||
Total assets | $ 235,496 | $ 228,014.3 |
Retirement and Income Solutions | ||
Segment Information: Assets | ||
Total assets | 158,505.5 | 152,721.7 |
Principal Global Investors | ||
Segment Information: Assets | ||
Total assets | 1,866.8 | 1,952.1 |
Principal International | ||
Segment Information: Assets | ||
Total assets | 47,440.1 | 45,118.3 |
U.S. Insurance Solutions | ||
Segment Information: Assets | ||
Total assets | 23,553.3 | 23,144.2 |
Corporate | ||
Segment Information: Assets | ||
Total assets | $ 4,130.3 | $ 5,078 |
Segment Information - Reconci78
Segment Information - Reconciliation of Segment Operating Revenues and Earnings to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Net realized capital gains (losses), net of related revenue adjustments | $ (32.6) | $ 113.6 |
Total revenues | 3,049.4 | 3,036.6 |
Pre-tax net realized capital gains (losses), as adjusted | (38.8) | 96.8 |
Income (loss) before income taxes | 414 | 439.8 |
Retirement and Income Solutions | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Inter-segment revenues | 95.1 | 89.2 |
Principal Global Investors | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Inter-segment revenues | 59.9 | 54.3 |
Operating Segments | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 3,104.7 | 2,937.9 |
Pre-tax operating earnings (losses) | 472.8 | 356.3 |
Operating Segments | Retirement and Income Solutions | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 1,482.6 | 1,464 |
Pre-tax operating earnings (losses) | 244.2 | 181.4 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Fee | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 450.4 | 413.3 |
Operating Segments | Retirement and Income Solutions | Retirement and Income Solutions - Spread | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 1,032.2 | 1,050.7 |
Operating Segments | Principal Global Investors | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 345.9 | 309.5 |
Pre-tax operating earnings (losses) | 100 | 79.7 |
Operating Segments | Principal International | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 321.3 | 286.6 |
Pre-tax operating earnings (losses) | 100.9 | 68 |
Operating Segments | U.S. Insurance Solutions | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 956.4 | 890.9 |
Pre-tax operating earnings (losses) | 86.2 | 80.5 |
Operating Segments | U.S. Insurance Solutions | Specialty benefits insurance | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 528.5 | 482.9 |
Operating Segments | U.S. Insurance Solutions | Individual life insurance | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 427.9 | 408 |
Operating Segments | Corporate | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | (1.5) | (13.1) |
Pre-tax operating earnings (losses) | (58.5) | (53.3) |
Reconciling Items | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Net realized capital gains (losses), net of related revenue adjustments | (32.6) | 113.6 |
Revenue adjustments related to equity method investments | (22.7) | (14.9) |
Pre-tax net realized capital gains (losses), as adjusted | (38.8) | 96.8 |
Earnings adjustments related to equity method investments and noncontrolling interest | $ (20) | $ (13.3) |
Segment Information - Net Reali
Segment Information - Net Realized Capital Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Information: Net realized capital gains (losses), as adjusted | ||
Net realized capital gains (losses) | $ (16.6) | $ 136.6 |
Derivative and hedging-related adjustments | (17.6) | (24.3) |
Market value adjustments to fee revenues | (0.7) | |
Adjustments related to equity method investments | 0.6 | 0.3 |
Adjustments related to sponsored investment funds | 1.2 | 1.4 |
Recognition of front-end fee revenue | (0.2) | 0.3 |
Net realized capital gains (losses), net of related revenue adjustments | (32.6) | 113.6 |
Amortization of deferred acquisition costs and other actuarial balances | 9.1 | (46.3) |
Capital (gains) losses distributed | (17.1) | 27.1 |
Market value adjustments of embedded derivatives | 1.8 | 2.4 |
Pre-tax net realized capital gains (losses), as adjusted | $ (38.8) | $ 96.8 |
Stock-Based Compensation Plan80
Stock-Based Compensation Plans - Stock-Based Awards (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 135 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | May 20, 2014 | |
Stock-Based Compensation Plans | ||||
Stock-Based Compensation Plans - Disclosures | ||||
Compensation cost | $ 22 | $ 17.9 | ||
Related income tax benefit | 7.5 | 5.5 | ||
Capitalized as part of an asset | $ 0.6 | $ 0.6 | ||
2014 Stock Incentive Plan and 2014 Directors Stock Plan | ||||
Stock-Based Compensation Plans - Disclosures | ||||
Maximum number of new shares of common stock available for grant (in shares) | 9.1 | 9.1 | ||
Stock Incentive Plan, Directors Stock Plan and Long-Term Performance Plan | ||||
Stock-Based Compensation Plans - Disclosures | ||||
Options granted (in shares) | 0 | |||
Awards or units granted (in shares) | 0 | |||
Amended and Restated 2010 Stock Incentive Plan and 2005 Directors Stock Plan | ||||
Stock-Based Compensation Plans - Disclosures | ||||
Number of shares that will be granted | 0 |
Stock-Based Compensation Plan81
Stock-Based Compensation Plans - Nonqualified Stock Options (Details) - Nonqualified Stock Options $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Change in options outstanding | |
Options granted (in shares) | shares | 0.7 |
Assumptions used to estimate fair value of stock options granted during period | |
Weighted-average expected volatility (as a percent) | 27.60% |
Weighted-average expected term | 7 years |
Weighted-average risk-free interest rate (as a percent) | 2.20% |
Weighted-average expected dividend yield (as a percent) | 2.87% |
Weighted-average estimated fair value of stock options granted (in dollars per share) | $ / shares | $ 15.31 |
Other nonqualified stock option disclosures | |
Unrecognized compensation costs | $ | $ 11.4 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year 6 months |
Stock-Based Compensation Plan82
Stock-Based Compensation Plans - Performance Share Awards and Restricted Stock Units (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Performance Share Awards | |
Change in nonvested units outstanding | |
Awards or units granted (in shares) | shares | 0.2 |
Awards or units granted weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 62.78 |
Other award and unit disclosures | |
Lower limit multiple of initial target awards (as a percent) | 0.00% |
Upper limit multiple of initial target awards (as a percent) | 150.00% |
Unrecognized compensation costs | $ | $ 13 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year 4 months 24 days |
Restricted Stock Units | |
Change in nonvested units outstanding | |
Awards or units granted (in shares) | shares | 0.8 |
Awards or units granted weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 62.78 |
Other award and unit disclosures | |
Unrecognized compensation costs | $ | $ 79.5 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 2 years 1 month 6 days |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net income (loss) | $ 353.6 | $ 369.2 |
Subtract: | ||
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Total | $ 348.9 | $ 368 |
Weighted-average shares outstanding | ||
Basic | 288.3 | 291.5 |
Dilutive effects: | ||
Diluted | 292.4 | 294.3 |
Net income (loss) per common share: | ||
Basic | $ 1.21 | $ 1.26 |
Diluted | $ 1.19 | $ 1.25 |
Nonqualified Stock Options | ||
Dilutive effects: | ||
Stock-based compensation awards | 1.9 | 1 |
Restricted Stock Units | ||
Dilutive effects: | ||
Stock-based compensation awards | 2 | 1.6 |
Performance Share Awards | ||
Dilutive effects: | ||
Stock-based compensation awards | 0.2 | 0.2 |
Condensed Consolidating Finan84
Condensed Consolidating Financial Information - Guarantor, Statements of Financial Position (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Fixed maturities, available-for-sale | $ 56,989.1 | $ 54,846.1 | ||
Fixed maturities, trading | 278 | 398.4 | ||
Equity securities, available-for-sale | 114 | 98.9 | ||
Equity securities, trading | 1,506.3 | 1,413.4 | ||
Mortgage loans | 13,388.1 | 13,230.2 | ||
Real estate | 1,433.3 | 1,368.8 | ||
Policy loans | 819.6 | 823.8 | ||
Investment in unconsolidated entities | 825.8 | 773.2 | ||
Other investments | 2,457.8 | 2,882.7 | ||
Cash and cash equivalents | 1,534.7 | 2,719.6 | $ 2,142.9 | $ 2,564.8 |
Accrued investment income | 625.2 | 580.6 | ||
Premiums due and other receivables | 1,447 | 1,361.9 | ||
Deferred acquisition costs | 3,430.8 | 3,380.2 | ||
Property and equipment | 718.8 | 699 | ||
Goodwill | 1,032.9 | 1,020.8 | ||
Other intangibles | 1,322.6 | 1,325.3 | ||
Separate account assets | 146,374.7 | 139,832.6 | ||
Other assets | 1,197.3 | 1,258.8 | ||
Total assets | 235,496 | 228,014.3 | ||
Liabilities | ||||
Contractholder funds | 38,074.1 | 37,953.6 | ||
Future policy benefits and claims | 29,690.5 | 29,000.7 | ||
Other policyholder funds | 922.7 | 890.4 | ||
Short-term debt | 59.5 | 51.4 | ||
Long-term debt | 3,126.2 | 3,125.7 | ||
Income taxes currently payable | 15 | 12.9 | ||
Deferred income taxes | 1,048.1 | 972.4 | ||
Separate account liabilities | 146,374.7 | 139,832.6 | ||
Other liabilities | 5,405.2 | 5,783.3 | ||
Total liabilities | 224,716 | 217,623 | ||
Redeemable noncontrolling interest | 95.1 | 97.5 | 260.9 | 85.7 |
Stockholders' equity | ||||
Common stock | 4.7 | 4.7 | ||
Additional paid-in capital | 9,780.5 | 9,686 | ||
Retained earnings (accumulated deficit) | 7,937.4 | 7,720.4 | ||
Accumulated other comprehensive income (loss) | (455.1) | (675.2) | ||
Treasury stock, at cost | (6,651.4) | (6,508.6) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,616.1 | 10,227.3 | ||
Noncontrolling interest | 68.8 | 66.5 | ||
Total stockholders' equity | 10,684.9 | 10,293.8 | 10,109.6 | 9,377.4 |
Total liabilities and stockholders' equity | 235,496 | 228,014.3 | ||
Principal Financial Group, Inc. Parent Only | ||||
Assets | ||||
Investment in unconsolidated entities | 12,951.8 | 12,597.9 | ||
Other investments | 9.8 | 9.8 | ||
Cash and cash equivalents | 962.6 | 882.6 | 734.3 | 578.7 |
Other assets | 519.4 | 573.7 | ||
Total assets | 14,443.6 | 14,064 | ||
Liabilities | ||||
Long-term debt | 3,126.8 | 3,126.4 | ||
Other liabilities | 700.7 | 710.3 | ||
Total liabilities | 3,827.5 | 3,836.7 | ||
Stockholders' equity | ||||
Common stock | 4.7 | 4.7 | ||
Additional paid-in capital | 9,780.5 | 9,686 | ||
Retained earnings (accumulated deficit) | 7,937.4 | 7,720.4 | ||
Accumulated other comprehensive income (loss) | (455.1) | (675.2) | ||
Treasury stock, at cost | (6,651.4) | (6,508.6) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,616.1 | 10,227.3 | ||
Total stockholders' equity | 10,616.1 | 10,227.3 | ||
Total liabilities and stockholders' equity | 14,443.6 | 14,064 | ||
Principal Life Insurance Company Only | ||||
Assets | ||||
Fixed maturities, available-for-sale | 50,606.8 | 48,672.1 | ||
Fixed maturities, trading | 101 | 135.6 | ||
Equity securities, available-for-sale | 89.5 | 96.3 | ||
Equity securities, trading | 5.2 | 8.2 | ||
Mortgage loans | 12,604.9 | 12,460.7 | ||
Real estate | 4.4 | 4.4 | ||
Policy loans | 779.4 | 784.8 | ||
Investment in unconsolidated entities | 2,003.4 | 2,071.1 | ||
Other investments | 4,348.6 | 4,740 | ||
Cash and cash equivalents | 330.5 | 675.1 | 692.7 | 1,127.9 |
Accrued investment income | 548.2 | 513.7 | ||
Premiums due and other receivables | 1,619.6 | 1,538 | ||
Deferred acquisition costs | 3,222.3 | 3,184.2 | ||
Property and equipment | 631.5 | 610.4 | ||
Goodwill | 54.3 | 54.3 | ||
Other intangibles | 23.1 | 23.5 | ||
Separate account assets | 108,065 | 103,661.9 | ||
Other assets | 971.1 | 969.5 | ||
Total assets | 186,008.8 | 180,203.8 | ||
Liabilities | ||||
Contractholder funds | 35,597.1 | 35,337.7 | ||
Future policy benefits and claims | 24,931 | 24,392.6 | ||
Other policyholder funds | 806.3 | 780.7 | ||
Deferred income taxes | 455.9 | 533.6 | ||
Separate account liabilities | 108,065 | 103,661.9 | ||
Other liabilities | 7,750.4 | 7,300.9 | ||
Total liabilities | 177,605.7 | 172,007.4 | ||
Stockholders' equity | ||||
Common stock | 2.5 | 2.5 | ||
Additional paid-in capital | 5,297.1 | 5,305.6 | ||
Retained earnings (accumulated deficit) | 2,241.1 | 2,139.9 | ||
Accumulated other comprehensive income (loss) | 862.4 | 748.4 | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 8,403.1 | 8,196.4 | ||
Total stockholders' equity | 8,403.1 | 8,196.4 | ||
Total liabilities and stockholders' equity | 186,008.8 | 180,203.8 | ||
Principal Financial Services, Inc. and Other Subsidiaries Combined | ||||
Assets | ||||
Fixed maturities, available-for-sale | 6,748.6 | 6,559.9 | ||
Fixed maturities, trading | 177 | 262.8 | ||
Equity securities, available-for-sale | 24.5 | 2.6 | ||
Equity securities, trading | 1,501.1 | 1,405.2 | ||
Mortgage loans | 1,338.6 | 1,289.4 | ||
Real estate | 1,428.9 | 1,364.4 | ||
Policy loans | 40.2 | 39 | ||
Investment in unconsolidated entities | 6,544.7 | 6,493.7 | ||
Other investments | 1,897.1 | 1,783 | ||
Cash and cash equivalents | 1,783.7 | 2,082.8 | 1,128 | 1,253.7 |
Accrued investment income | 79 | 74.5 | ||
Premiums due and other receivables | 3,014.8 | 2,836 | ||
Deferred acquisition costs | 208.5 | 196 | ||
Property and equipment | 87.3 | 88.6 | ||
Goodwill | 978.6 | 966.5 | ||
Other intangibles | 1,299.5 | 1,301.8 | ||
Separate account assets | 38,309.7 | 36,170.7 | ||
Other assets | 3,667.5 | 3,507.7 | ||
Total assets | 69,129.3 | 66,424.6 | ||
Liabilities | ||||
Contractholder funds | 2,813.8 | 2,949.2 | ||
Future policy benefits and claims | 5,546.6 | 5,312.1 | ||
Other policyholder funds | 118.4 | 111 | ||
Short-term debt | 59.5 | 51.4 | ||
Long-term debt | 530.6 | 495.1 | ||
Income taxes currently payable | 94.2 | 124.3 | ||
Deferred income taxes | 1,256.7 | 1,111.9 | ||
Separate account liabilities | 38,309.7 | 36,170.7 | ||
Other liabilities | 7,374.6 | 7,425.9 | ||
Total liabilities | 56,104.1 | 53,751.6 | ||
Redeemable noncontrolling interest | 95.1 | 97.5 | ||
Stockholders' equity | ||||
Additional paid-in capital | 9,008.9 | 9,010.9 | ||
Retained earnings (accumulated deficit) | 3,869.5 | 3,724.3 | ||
Accumulated other comprehensive income (loss) | (21.9) | (230.9) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 12,856.5 | 12,504.3 | ||
Noncontrolling interest | 73.6 | 71.2 | ||
Total stockholders' equity | 12,930.1 | 12,575.5 | ||
Total liabilities and stockholders' equity | 69,129.3 | 66,424.6 | ||
Eliminations, Notes Guarantor | ||||
Assets | ||||
Fixed maturities, available-for-sale | (366.3) | (385.9) | ||
Mortgage loans | (555.4) | (519.9) | ||
Investment in unconsolidated entities | (20,674.1) | (20,389.5) | ||
Other investments | (3,797.7) | (3,650.1) | ||
Cash and cash equivalents | (1,542.1) | (920.9) | $ (412.1) | $ (395.5) |
Accrued investment income | (2) | (7.6) | ||
Premiums due and other receivables | (3,187.4) | (3,012.1) | ||
Other assets | (3,960.7) | (3,792.1) | ||
Total assets | (34,085.7) | (32,678.1) | ||
Liabilities | ||||
Contractholder funds | (336.8) | (333.3) | ||
Future policy benefits and claims | (787.1) | (704) | ||
Other policyholder funds | (2) | (1.3) | ||
Long-term debt | (531.2) | (495.8) | ||
Income taxes currently payable | (79.2) | (111.4) | ||
Deferred income taxes | (664.5) | (673.1) | ||
Other liabilities | (10,420.5) | (9,653.8) | ||
Total liabilities | (12,821.3) | (11,972.7) | ||
Stockholders' equity | ||||
Common stock | (2.5) | (2.5) | ||
Additional paid-in capital | (14,306) | (14,316.5) | ||
Retained earnings (accumulated deficit) | (6,110.6) | (5,864.2) | ||
Accumulated other comprehensive income (loss) | (840.5) | (517.5) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | (21,259.6) | (20,700.7) | ||
Noncontrolling interest | (4.8) | (4.7) | ||
Total stockholders' equity | (21,264.4) | (20,705.4) | ||
Total liabilities and stockholders' equity | $ (34,085.7) | $ (32,678.1) |
Condensed Consolidating Finan85
Condensed Consolidating Financial Information - Guarantor, Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Premiums and other considerations | $ 1,248 | $ 1,282.4 |
Fees and other revenues | 940.6 | 855.9 |
Net investment income (loss) | 877.4 | 761.7 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 12.2 | 184.7 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (27.3) | (55.6) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1.5) | 7.5 |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Net realized capital gains (losses) | (16.6) | 136.6 |
Total revenues | 3,049.4 | 3,036.6 |
Expenses | ||
Benefits, claims and settlement expenses | 1,657.3 | 1,658.5 |
Dividends to policyholders | 34.9 | 38.8 |
Operating expenses | 943.2 | 899.5 |
Total expenses | 2,635.4 | 2,596.8 |
Income (loss) before income taxes | 414 | 439.8 |
Income taxes (benefits) | 60.4 | 70.6 |
Net income (loss) | 353.6 | 369.2 |
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Net income (loss) attributable to Principal Financial Group, Inc. | 348.9 | 368 |
Net income (loss) | 353.6 | 369.2 |
Other comprehensive income (loss) | 221.1 | 539.2 |
Comprehensive income (loss) | 574.7 | 908.4 |
Principal Financial Group, Inc. Parent Only | ||
Revenues | ||
Fees and other revenues | 7.8 | |
Net investment income (loss) | 1.8 | 0.7 |
Total revenues | 9.6 | 0.7 |
Expenses | ||
Operating expenses | 50.8 | 56.8 |
Total expenses | 50.8 | 56.8 |
Income (loss) before income taxes | (41.2) | (56.1) |
Income taxes (benefits) | (16.5) | (22.8) |
Equity in the net income (loss) of subsidiaries | 373.6 | 401.3 |
Net income (loss) | 348.9 | 368 |
Net income (loss) attributable to Principal Financial Group, Inc. | 348.9 | 368 |
Net income (loss) | 348.9 | 368 |
Other comprehensive income (loss) | 217.7 | 532 |
Comprehensive income (loss) | 566.6 | 900 |
Principal Life Insurance Company Only | ||
Revenues | ||
Premiums and other considerations | 1,145.9 | 1,205.2 |
Fees and other revenues | 514.7 | 471.5 |
Net investment income (loss) | 592.8 | 552.8 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | (160.8) | 93.9 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (27.1) | (54.7) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1) | 7.6 |
Net impairment (losses) recoveries on available-for-sale securities | (28.1) | (47.1) |
Net realized capital gains (losses) | (188.9) | 46.8 |
Total revenues | 2,064.5 | 2,276.3 |
Expenses | ||
Benefits, claims and settlement expenses | 1,477.7 | 1,502.5 |
Dividends to policyholders | 34.9 | 38.8 |
Operating expenses | 508.8 | 557.7 |
Total expenses | 2,021.4 | 2,099 |
Income (loss) before income taxes | 43.1 | 177.3 |
Income taxes (benefits) | (38.3) | 18.6 |
Equity in the net income (loss) of subsidiaries | 172.5 | 132 |
Net income (loss) | 253.9 | 290.7 |
Net income (loss) attributable to Principal Financial Group, Inc. | 253.9 | 290.7 |
Net income (loss) | 253.9 | 290.7 |
Other comprehensive income (loss) | 112.6 | 356.6 |
Comprehensive income (loss) | 366.5 | 647.3 |
Principal Financial Services, Inc. and Other Subsidiaries Combined | ||
Revenues | ||
Premiums and other considerations | 102.1 | 77.2 |
Fees and other revenues | 519.6 | 478.6 |
Net investment income (loss) | 517.2 | 489 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 173.7 | 90.8 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (0.2) | (0.9) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (0.5) | (0.1) |
Net impairment (losses) recoveries on available-for-sale securities | (0.7) | (1) |
Net realized capital gains (losses) | 173 | 89.8 |
Total revenues | 1,311.9 | 1,134.6 |
Expenses | ||
Benefits, claims and settlement expenses | 182.3 | 158.8 |
Operating expenses | 468.1 | 365.3 |
Total expenses | 650.4 | 524.1 |
Income (loss) before income taxes | 661.5 | 610.5 |
Income taxes (benefits) | 115.3 | 75 |
Equity in the net income (loss) of subsidiaries | (169.5) | (134.7) |
Net income (loss) | 376.7 | 400.8 |
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Net income (loss) attributable to Principal Financial Group, Inc. | 372 | 399.6 |
Net income (loss) | 376.7 | 400.8 |
Other comprehensive income (loss) | 245.1 | 515.4 |
Comprehensive income (loss) | 621.8 | 916.2 |
Eliminations, Notes Guarantor | ||
Revenues | ||
Fees and other revenues | (101.5) | (94.2) |
Net investment income (loss) | (234.4) | (280.8) |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | (0.7) | |
Net realized capital gains (losses) | (0.7) | |
Total revenues | (336.6) | (375) |
Expenses | ||
Benefits, claims and settlement expenses | (2.7) | (2.8) |
Operating expenses | (84.5) | (80.3) |
Total expenses | (87.2) | (83.1) |
Income (loss) before income taxes | (249.4) | (291.9) |
Income taxes (benefits) | (0.1) | (0.2) |
Equity in the net income (loss) of subsidiaries | (376.6) | (398.6) |
Net income (loss) | (625.9) | (690.3) |
Net income (loss) attributable to Principal Financial Group, Inc. | (625.9) | (690.3) |
Net income (loss) | (625.9) | (690.3) |
Other comprehensive income (loss) | (354.3) | (864.8) |
Comprehensive income (loss) | $ (980.2) | $ (1,555.1) |
Condensed Consolidating Finan86
Condensed Consolidating Financial Information - Guarantor, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net cash provided by (used in) operating activities | $ 522.9 | $ 895.5 |
Investing activities | ||
Available-for-sale securities: Purchases | (4,307) | (3,558.6) |
Available-for-sale securities: Sales | 333.7 | 205.5 |
Available-for-sale securities: Maturities | 2,460.8 | 1,616 |
Mortgage loans acquired or originated | (473.8) | (475.9) |
Mortgage loans sold or repaid | 329.3 | 479.3 |
Real estate acquired | (90.8) | (44.5) |
Real estate sold | 47.1 | 15 |
Net (purchases) sales of property and equipment | (43.8) | (44.2) |
Net change in other investments | (86.5) | (45.9) |
Net cash provided by (used in) investing activities | (1,831) | (1,853.3) |
Financing activities | ||
Issuance of common stock | 70.8 | 10 |
Acquisition of treasury stock | (142.8) | (105.6) |
Proceeds from financing element derivatives | 0.1 | |
Payments for financing element derivatives | (20.9) | (21.3) |
Excess tax benefits from share-based payment arrangements | 5 | |
Purchase of subsidiary shares from noncontrolling interest | (2.3) | |
Dividends to common stockholders | (130) | (110.4) |
Issuance of long-term debt | 3.2 | |
Net proceeds from (repayments of) short-term borrowings | 7.6 | (59.9) |
Investment contract deposits | 2,629.1 | 3,976.3 |
Investment contract withdrawals | (2,303.9) | (3,166.3) |
Net increase (decrease) in banking operation deposits | 6.8 | 4 |
Other | 6.4 | 3.2 |
Net cash provided by (used in) financing activities | 123.2 | 535.9 |
Net increase (decrease) in cash and cash equivalents | (1,184.9) | (421.9) |
Cash and cash equivalents at beginning of period | 2,719.6 | 2,564.8 |
Cash and cash equivalents at end of period | 1,534.7 | 2,142.9 |
Principal Financial Group, Inc. Parent Only | ||
Operating activities | ||
Net cash provided by (used in) operating activities | 37.1 | (3.4) |
Investing activities | ||
Dividends and returns of capital received from (contributed to) unconsolidated entities | 249.9 | 369.8 |
Net change in other investments | (5) | (4.9) |
Net cash provided by (used in) investing activities | 244.9 | 364.9 |
Financing activities | ||
Issuance of common stock | 70.8 | 10 |
Acquisition of treasury stock | (142.8) | (105.6) |
Excess tax benefits from share-based payment arrangements | 0.1 | |
Dividends to common stockholders | (130) | (110.4) |
Net cash provided by (used in) financing activities | (202) | (205.9) |
Net increase (decrease) in cash and cash equivalents | 80 | 155.6 |
Cash and cash equivalents at beginning of period | 882.6 | 578.7 |
Cash and cash equivalents at end of period | 962.6 | 734.3 |
Principal Life Insurance Company Only | ||
Operating activities | ||
Net cash provided by (used in) operating activities | 1,498.3 | 998.3 |
Investing activities | ||
Available-for-sale securities: Purchases | (3,933.1) | (3,374.1) |
Available-for-sale securities: Sales | 205.5 | 134.8 |
Available-for-sale securities: Maturities | 2,189.4 | 1,486.4 |
Mortgage loans acquired or originated | (445) | (430.2) |
Mortgage loans sold or repaid | 298.5 | 420.4 |
Real estate acquired | (0.1) | |
Real estate sold | 3.5 | |
Net (purchases) sales of property and equipment | (35.9) | (33.3) |
Dividends and returns of capital received from (contributed to) unconsolidated entities | 0.4 | 0.8 |
Net change in other investments | (175.9) | (47.4) |
Net cash provided by (used in) investing activities | (1,896.1) | (1,839.2) |
Financing activities | ||
Proceeds from financing element derivatives | 0.1 | |
Payments for financing element derivatives | (20.9) | (21.3) |
Excess tax benefits from share-based payment arrangements | 1.8 | |
Capital received from (dividends and capital paid to) parent | (174.9) | (319.8) |
Investment contract deposits | 2,536 | 3,903.7 |
Investment contract withdrawals | (2,293.5) | (3,161.9) |
Other | 6.4 | 3.2 |
Net cash provided by (used in) financing activities | 53.2 | 405.7 |
Net increase (decrease) in cash and cash equivalents | (344.6) | (435.2) |
Cash and cash equivalents at beginning of period | 675.1 | 1,127.9 |
Cash and cash equivalents at end of period | 330.5 | 692.7 |
Principal Financial Services, Inc. and Other Subsidiaries Combined | ||
Operating activities | ||
Net cash provided by (used in) operating activities | (19.1) | 212.4 |
Investing activities | ||
Available-for-sale securities: Purchases | (373.9) | (186.7) |
Available-for-sale securities: Sales | 146.5 | 70.7 |
Available-for-sale securities: Maturities | 271.4 | 129.6 |
Mortgage loans acquired or originated | (91.4) | (56) |
Mortgage loans sold or repaid | 57.1 | 60.5 |
Real estate acquired | (90.8) | (44.4) |
Real estate sold | 47.1 | 11.5 |
Net (purchases) sales of property and equipment | (7.9) | (10.9) |
Dividends and returns of capital received from (contributed to) unconsolidated entities | 174.9 | 319.8 |
Net change in other investments | (295.1) | (284.9) |
Net cash provided by (used in) investing activities | (162.1) | 9.2 |
Financing activities | ||
Excess tax benefits from share-based payment arrangements | 3.1 | |
Purchase of subsidiary shares from noncontrolling interest | (2.3) | |
Issuance of long-term debt | 61.6 | 11.8 |
Principal repayments of long-term debt | (26.3) | (1.6) |
Net proceeds from (repayments of) short-term borrowings | 7.6 | (59.9) |
Capital received from (dividends and capital paid to) parent | (250.3) | (370.6) |
Investment contract deposits | 93.1 | 72.6 |
Investment contract withdrawals | (10.4) | (4.4) |
Net increase (decrease) in banking operation deposits | 6.8 | 4 |
Net cash provided by (used in) financing activities | (117.9) | (347.3) |
Net increase (decrease) in cash and cash equivalents | (299.1) | (125.7) |
Cash and cash equivalents at beginning of period | 2,082.8 | 1,253.7 |
Cash and cash equivalents at end of period | 1,783.7 | 1,128 |
Eliminations, Notes Guarantor | ||
Operating activities | ||
Net cash provided by (used in) operating activities | (993.4) | (311.8) |
Investing activities | ||
Available-for-sale securities: Purchases | 2.2 | |
Available-for-sale securities: Sales | (18.3) | |
Mortgage loans acquired or originated | 62.6 | 10.3 |
Mortgage loans sold or repaid | (26.3) | (1.6) |
Dividends and returns of capital received from (contributed to) unconsolidated entities | (425.2) | (690.4) |
Net change in other investments | 389.5 | 291.3 |
Net cash provided by (used in) investing activities | (17.7) | (388.2) |
Financing activities | ||
Issuance of long-term debt | (61.6) | (8.6) |
Principal repayments of long-term debt | 26.3 | 1.6 |
Capital received from (dividends and capital paid to) parent | 425.2 | 690.4 |
Net cash provided by (used in) financing activities | 389.9 | 683.4 |
Net increase (decrease) in cash and cash equivalents | (621.2) | (16.6) |
Cash and cash equivalents at beginning of period | (920.9) | (395.5) |
Cash and cash equivalents at end of period | $ (1,542.1) | $ (412.1) |
Condensed Consolidating Finan87
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Financial Position (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Fixed maturities, available-for-sale | $ 56,989.1 | $ 54,846.1 | ||
Fixed maturities, trading | 278 | 398.4 | ||
Equity securities, available-for-sale | 114 | 98.9 | ||
Equity securities, trading | 1,506.3 | 1,413.4 | ||
Mortgage loans | 13,388.1 | 13,230.2 | ||
Real estate | 1,433.3 | 1,368.8 | ||
Policy loans | 819.6 | 823.8 | ||
Investment in unconsolidated entities | 825.8 | 773.2 | ||
Other investments | 2,457.8 | 2,882.7 | ||
Cash and cash equivalents | 1,534.7 | 2,719.6 | $ 2,142.9 | $ 2,564.8 |
Accrued investment income | 625.2 | 580.6 | ||
Premiums due and other receivables | 1,447 | 1,361.9 | ||
Deferred acquisition costs | 3,430.8 | 3,380.2 | ||
Property and equipment | 718.8 | 699 | ||
Goodwill | 1,032.9 | 1,020.8 | ||
Other intangibles | 1,322.6 | 1,325.3 | ||
Separate account assets | 146,374.7 | 139,832.6 | ||
Other assets | 1,197.3 | 1,258.8 | ||
Total assets | 235,496 | 228,014.3 | ||
Liabilities | ||||
Contractholder funds | 38,074.1 | 37,953.6 | ||
Future policy benefits and claims | 29,690.5 | 29,000.7 | ||
Other policyholder funds | 922.7 | 890.4 | ||
Short-term debt | 59.5 | 51.4 | ||
Long-term debt | 3,126.2 | 3,125.7 | ||
Income taxes currently payable | 15 | 12.9 | ||
Deferred income taxes | 1,048.1 | 972.4 | ||
Separate account liabilities | 146,374.7 | 139,832.6 | ||
Other liabilities | 5,405.2 | 5,783.3 | ||
Total liabilities | 224,716 | 217,623 | ||
Redeemable noncontrolling interest | 95.1 | 97.5 | 260.9 | 85.7 |
Stockholders' equity | ||||
Common stock | 4.7 | 4.7 | ||
Additional paid-in capital | 9,780.5 | 9,686 | ||
Retained earnings (accumulated deficit) | 7,937.4 | 7,720.4 | ||
Accumulated other comprehensive income (loss) | (455.1) | (675.2) | ||
Treasury stock, at cost | (6,651.4) | (6,508.6) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,616.1 | 10,227.3 | ||
Noncontrolling interest | 68.8 | 66.5 | ||
Total stockholders' equity | 10,684.9 | 10,293.8 | 10,109.6 | 9,377.4 |
Total liabilities and stockholders' equity | 235,496 | 228,014.3 | ||
Principal Financial Group, Inc. Parent Only | ||||
Assets | ||||
Investment in unconsolidated entities | 12,951.8 | 12,597.9 | ||
Other investments | 9.8 | 9.8 | ||
Cash and cash equivalents | 962.6 | 882.6 | 734.3 | 578.7 |
Other assets | 519.4 | 573.7 | ||
Total assets | 14,443.6 | 14,064 | ||
Liabilities | ||||
Long-term debt | 3,126.8 | 3,126.4 | ||
Other liabilities | 700.7 | 710.3 | ||
Total liabilities | 3,827.5 | 3,836.7 | ||
Stockholders' equity | ||||
Common stock | 4.7 | 4.7 | ||
Additional paid-in capital | 9,780.5 | 9,686 | ||
Retained earnings (accumulated deficit) | 7,937.4 | 7,720.4 | ||
Accumulated other comprehensive income (loss) | (455.1) | (675.2) | ||
Treasury stock, at cost | (6,651.4) | (6,508.6) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,616.1 | 10,227.3 | ||
Total stockholders' equity | 10,616.1 | 10,227.3 | ||
Total liabilities and stockholders' equity | 14,443.6 | 14,064 | ||
Principal Financial Services, Inc. Only | ||||
Assets | ||||
Investment in unconsolidated entities | 13,007 | 12,532.4 | ||
Other investments | 143.6 | 135.9 | ||
Cash and cash equivalents | 1,170.6 | 1,203.4 | 665 | 730.5 |
Accrued investment income | 0.1 | |||
Premiums due and other receivables | 0.4 | 0.3 | ||
Other assets | 188.1 | 185.6 | ||
Total assets | 14,509.7 | 14,057.7 | ||
Liabilities | ||||
Long-term debt | 133.3 | 142.1 | ||
Other liabilities | 1,519.9 | 1,411.3 | ||
Total liabilities | 1,653.2 | 1,553.4 | ||
Stockholders' equity | ||||
Additional paid-in capital | 9,008.9 | 9,010.9 | ||
Retained earnings (accumulated deficit) | 3,869.5 | 3,724.3 | ||
Accumulated other comprehensive income (loss) | (21.9) | (230.9) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 12,856.5 | 12,504.3 | ||
Total stockholders' equity | 12,856.5 | 12,504.3 | ||
Total liabilities and stockholders' equity | 14,509.7 | 14,057.7 | ||
Principal Life Insurance Company and Other Subsidiaries Combined | ||||
Assets | ||||
Fixed maturities, available-for-sale | 56,989.1 | 54,846.1 | ||
Fixed maturities, trading | 278 | 398.4 | ||
Equity securities, available-for-sale | 114 | 98.9 | ||
Equity securities, trading | 1,506.3 | 1,413.4 | ||
Mortgage loans | 13,388.1 | 13,230.2 | ||
Real estate | 1,433.3 | 1,368.8 | ||
Policy loans | 819.6 | 823.8 | ||
Investment in unconsolidated entities | 739.5 | 697.5 | ||
Other investments | 2,304.4 | 2,737 | ||
Cash and cash equivalents | 1,435.8 | 2,114.8 | 1,910.6 | 2,413.3 |
Accrued investment income | 625.2 | 580.5 | ||
Premiums due and other receivables | 1,579.6 | 1,503.1 | ||
Deferred acquisition costs | 3,430.8 | 3,380.2 | ||
Property and equipment | 718.8 | 699 | ||
Goodwill | 1,032.9 | 1,020.8 | ||
Other intangibles | 1,322.6 | 1,325.3 | ||
Separate account assets | 146,374.7 | 139,832.6 | ||
Other assets | 1,211.5 | 1,200.9 | ||
Total assets | 235,304.2 | 227,271.3 | ||
Liabilities | ||||
Contractholder funds | 38,074.1 | 37,953.6 | ||
Future policy benefits and claims | 29,690.5 | 29,000.7 | ||
Other policyholder funds | 922.7 | 890.4 | ||
Short-term debt | 136.2 | 127.9 | ||
Long-term debt | (0.6) | (0.8) | ||
Income taxes currently payable | 71.7 | 68.3 | ||
Deferred income taxes | 1,692.9 | 1,619.3 | ||
Separate account liabilities | 146,374.7 | 139,832.6 | ||
Other liabilities | 5,068.1 | 4,962.1 | ||
Total liabilities | 222,030.3 | 214,454.1 | ||
Redeemable noncontrolling interest | 95.1 | 97.5 | ||
Stockholders' equity | ||||
Common stock | 17.8 | 17.8 | ||
Additional paid-in capital | 10,040.2 | 10,045.9 | ||
Retained earnings (accumulated deficit) | 3,191 | 2,940.2 | ||
Accumulated other comprehensive income (loss) | (137) | (348.7) | ||
Treasury stock, at cost | (2) | (2) | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | 13,110 | 12,653.2 | ||
Noncontrolling interest | 68.8 | 66.5 | ||
Total stockholders' equity | 13,178.8 | 12,719.7 | ||
Total liabilities and stockholders' equity | 235,304.2 | 227,271.3 | ||
Eliminations, Shelf Registration Debt Guarantor | ||||
Assets | ||||
Investment in unconsolidated entities | (25,872.5) | (25,054.6) | ||
Cash and cash equivalents | (2,034.3) | (1,481.2) | $ (1,167) | $ (1,157.7) |
Premiums due and other receivables | (133) | (141.5) | ||
Other assets | (721.7) | (701.4) | ||
Total assets | (28,761.5) | (27,378.7) | ||
Liabilities | ||||
Short-term debt | (76.7) | (76.5) | ||
Long-term debt | (133.3) | (142) | ||
Income taxes currently payable | (56.7) | (55.4) | ||
Deferred income taxes | (644.8) | (646.9) | ||
Other liabilities | (1,883.5) | (1,300.4) | ||
Total liabilities | (2,795) | (2,221.2) | ||
Stockholders' equity | ||||
Common stock | (17.8) | (17.8) | ||
Additional paid-in capital | (19,049.1) | (19,056.8) | ||
Retained earnings (accumulated deficit) | (7,060.5) | (6,664.5) | ||
Accumulated other comprehensive income (loss) | 158.9 | 579.6 | ||
Treasury stock, at cost | 2 | 2 | ||
Total stockholders' equity attributable to Principal Financial Group, Inc. | (25,966.5) | (25,157.5) | ||
Total stockholders' equity | (25,966.5) | (25,157.5) | ||
Total liabilities and stockholders' equity | $ (28,761.5) | $ (27,378.7) |
Condensed Consolidating Finan88
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Premiums and other considerations | $ 1,248 | $ 1,282.4 |
Fees and other revenues | 940.6 | 855.9 |
Net investment income (loss) | 877.4 | 761.7 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 12.2 | 184.7 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (27.3) | (55.6) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1.5) | 7.5 |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Net realized capital gains (losses) | (16.6) | 136.6 |
Total revenues | 3,049.4 | 3,036.6 |
Expenses | ||
Benefits, claims and settlement expenses | 1,657.3 | 1,658.5 |
Dividends to policyholders | 34.9 | 38.8 |
Operating expenses | 943.2 | 899.5 |
Total expenses | 2,635.4 | 2,596.8 |
Income (loss) before income taxes | 414 | 439.8 |
Income taxes (benefits) | 60.4 | 70.6 |
Net income (loss) | 353.6 | 369.2 |
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Net income (loss) attributable to Principal Financial Group, Inc. | 348.9 | 368 |
Net income (loss) | 353.6 | 369.2 |
Other comprehensive income (loss) | 221.1 | 539.2 |
Comprehensive income (loss) | 574.7 | 908.4 |
Principal Financial Group, Inc. Parent Only | ||
Revenues | ||
Fees and other revenues | 7.8 | |
Net investment income (loss) | 1.8 | 0.7 |
Total revenues | 9.6 | 0.7 |
Expenses | ||
Operating expenses | 50.8 | 56.8 |
Total expenses | 50.8 | 56.8 |
Income (loss) before income taxes | (41.2) | (56.1) |
Income taxes (benefits) | (16.5) | (22.8) |
Equity in the net income (loss) of subsidiaries | 373.6 | 401.3 |
Net income (loss) | 348.9 | 368 |
Net income (loss) attributable to Principal Financial Group, Inc. | 348.9 | 368 |
Net income (loss) | 348.9 | 368 |
Other comprehensive income (loss) | 217.7 | 532 |
Comprehensive income (loss) | 566.6 | 900 |
Principal Financial Services, Inc. Only | ||
Revenues | ||
Fees and other revenues | 0.1 | 0.1 |
Net investment income (loss) | (0.4) | 6.6 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 2.3 | (6) |
Net realized capital gains (losses) | 2.3 | (6) |
Total revenues | 2 | 0.7 |
Expenses | ||
Operating expenses | 22.9 | 3.8 |
Total expenses | 22.9 | 3.8 |
Income (loss) before income taxes | (20.9) | (3.1) |
Income taxes (benefits) | (9.3) | (20.4) |
Equity in the net income (loss) of subsidiaries | 383.6 | 382.3 |
Net income (loss) | 372 | 399.6 |
Net income (loss) attributable to Principal Financial Group, Inc. | 372 | 399.6 |
Net income (loss) | 372 | 399.6 |
Other comprehensive income (loss) | 206.5 | 519.8 |
Comprehensive income (loss) | 578.5 | 919.4 |
Principal Life Insurance Company and Other Subsidiaries Combined | ||
Revenues | ||
Premiums and other considerations | 1,248 | 1,282.4 |
Fees and other revenues | 934 | 859.1 |
Net investment income (loss) | 874.1 | 752.8 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 9.9 | 190.5 |
Net other-than-temporary impairment (losses) recoveries on available-for-sale securities | (27.3) | (55.6) |
Other-than-temporary impairment losses on fixed maturities, available-for-sale reclassified to (from) other comprehensive income | (1.5) | 7.5 |
Net impairment (losses) recoveries on available-for-sale securities | (28.8) | (48.1) |
Net realized capital gains (losses) | (18.9) | 142.4 |
Total revenues | 3,037.2 | 3,036.7 |
Expenses | ||
Benefits, claims and settlement expenses | 1,657.3 | 1,658.5 |
Dividends to policyholders | 34.9 | 38.8 |
Operating expenses | 870.5 | 842.1 |
Total expenses | 2,562.7 | 2,539.4 |
Income (loss) before income taxes | 474.5 | 497.3 |
Income taxes (benefits) | 86.2 | 113.8 |
Net income (loss) | 388.3 | 383.5 |
Net income (loss) attributable to noncontrolling interest | 4.7 | 1.2 |
Net income (loss) attributable to Principal Financial Group, Inc. | 383.6 | 382.3 |
Net income (loss) | 388.3 | 383.5 |
Other comprehensive income (loss) | 212.7 | 537.1 |
Comprehensive income (loss) | 601 | 920.6 |
Eliminations, Shelf Registration Debt Guarantor | ||
Revenues | ||
Fees and other revenues | (1.3) | (3.3) |
Net investment income (loss) | 1.9 | 1.6 |
Net realized capital gains (losses), excluding impairment losses on available-for-sale securities | 0.2 | |
Net realized capital gains (losses) | 0.2 | |
Total revenues | 0.6 | (1.5) |
Expenses | ||
Operating expenses | (1) | (3.2) |
Total expenses | (1) | (3.2) |
Income (loss) before income taxes | 1.6 | 1.7 |
Equity in the net income (loss) of subsidiaries | (757.2) | (783.6) |
Net income (loss) | (755.6) | (781.9) |
Net income (loss) attributable to Principal Financial Group, Inc. | (755.6) | (781.9) |
Net income (loss) | (755.6) | (781.9) |
Other comprehensive income (loss) | (415.8) | (1,049.7) |
Comprehensive income (loss) | $ (1,171.4) | $ (1,831.6) |
Condensed Consolidating Finan89
Condensed Consolidating Financial Information - Shelf Registration Guarantor, Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net cash provided by (used in) operating activities | $ 522.9 | $ 895.5 |
Investing activities | ||
Available-for-sale securities: Purchases | (4,307) | (3,558.6) |
Available-for-sale securities: Sales | 333.7 | 205.5 |
Available-for-sale securities: Maturities | 2,460.8 | 1,616 |
Mortgage loans acquired or originated | (473.8) | (475.9) |
Mortgage loans sold or repaid | 329.3 | 479.3 |
Real estate acquired | (90.8) | (44.5) |
Real estate sold | 47.1 | 15 |
Net (purchases) sales of property and equipment | (43.8) | (44.2) |
Net change in other investments | (86.5) | (45.9) |
Net cash provided by (used in) investing activities | (1,831) | (1,853.3) |
Financing activities | ||
Issuance of common stock | 70.8 | 10 |
Acquisition of treasury stock | (142.8) | (105.6) |
Proceeds from financing element derivatives | 0.1 | |
Payments for financing element derivatives | (20.9) | (21.3) |
Excess tax benefits from share-based payment arrangements | 5 | |
Purchase of subsidiary shares from noncontrolling interest | (2.3) | |
Dividends to common stockholders | (130) | (110.4) |
Issuance of long-term debt | 3.2 | |
Net proceeds from (repayments of) short-term borrowings | 7.6 | (59.9) |
Investment contract deposits | 2,629.1 | 3,976.3 |
Investment contract withdrawals | (2,303.9) | (3,166.3) |
Net increase (decrease) in banking operation deposits | 6.8 | 4 |
Other | 6.4 | 3.2 |
Net cash provided by (used in) financing activities | 123.2 | 535.9 |
Net increase (decrease) in cash and cash equivalents | (1,184.9) | (421.9) |
Cash and cash equivalents at beginning of period | 2,719.6 | 2,564.8 |
Cash and cash equivalents at end of period | 1,534.7 | 2,142.9 |
Principal Financial Group, Inc. Parent Only | ||
Operating activities | ||
Net cash provided by (used in) operating activities | 37.1 | (3.4) |
Investing activities | ||
Dividends and returns of capital received from (contributed to) unconsolidated entities | 249.9 | 369.8 |
Net change in other investments | (5) | (4.9) |
Net cash provided by (used in) investing activities | 244.9 | 364.9 |
Financing activities | ||
Issuance of common stock | 70.8 | 10 |
Acquisition of treasury stock | (142.8) | (105.6) |
Excess tax benefits from share-based payment arrangements | 0.1 | |
Dividends to common stockholders | (130) | (110.4) |
Net cash provided by (used in) financing activities | (202) | (205.9) |
Net increase (decrease) in cash and cash equivalents | 80 | 155.6 |
Cash and cash equivalents at beginning of period | 882.6 | 578.7 |
Cash and cash equivalents at end of period | 962.6 | 734.3 |
Principal Financial Services, Inc. Only | ||
Operating activities | ||
Net cash provided by (used in) operating activities | 141.5 | 67.2 |
Investing activities | ||
Dividends and returns of capital received from (contributed to) unconsolidated entities | 76.6 | 220.4 |
Net change in other investments | 7.8 | 23.7 |
Net cash provided by (used in) investing activities | 84.4 | 244.1 |
Financing activities | ||
Issuance of long-term debt | 1 | 3 |
Principal repayments of long-term debt | (9.8) | (10) |
Capital received from (dividends and capital paid to) parent | (249.9) | (369.8) |
Net cash provided by (used in) financing activities | (258.7) | (376.8) |
Net increase (decrease) in cash and cash equivalents | (32.8) | (65.5) |
Cash and cash equivalents at beginning of period | 1,203.4 | 730.5 |
Cash and cash equivalents at end of period | 1,170.6 | 665 |
Principal Life Insurance Company and Other Subsidiaries Combined | ||
Operating activities | ||
Net cash provided by (used in) operating activities | 942.5 | 866.8 |
Investing activities | ||
Available-for-sale securities: Purchases | (4,307) | (3,558.6) |
Available-for-sale securities: Sales | 333.7 | 205.5 |
Available-for-sale securities: Maturities | 2,460.8 | 1,616 |
Mortgage loans acquired or originated | (473.8) | (475.9) |
Mortgage loans sold or repaid | 329.3 | 479.3 |
Real estate acquired | (90.8) | (44.5) |
Real estate sold | 47.1 | 15 |
Net (purchases) sales of property and equipment | (43.8) | (44.2) |
Net change in other investments | (125.8) | (94.1) |
Net cash provided by (used in) investing activities | (1,870.3) | (1,901.5) |
Financing activities | ||
Proceeds from financing element derivatives | 0.1 | |
Payments for financing element derivatives | (20.9) | (21.3) |
Excess tax benefits from share-based payment arrangements | 4.9 | |
Purchase of subsidiary shares from noncontrolling interest | (2.3) | |
Issuance of long-term debt | 3.2 | |
Net proceeds from (repayments of) short-term borrowings | 7.8 | (49.3) |
Capital received from (dividends and capital paid to) parent | (76.6) | (220.4) |
Investment contract deposits | 2,629.1 | 3,976.3 |
Investment contract withdrawals | (2,303.9) | (3,166.3) |
Net increase (decrease) in banking operation deposits | 6.8 | 4 |
Other | 6.4 | 3.2 |
Net cash provided by (used in) financing activities | 248.8 | 532 |
Net increase (decrease) in cash and cash equivalents | (679) | (502.7) |
Cash and cash equivalents at beginning of period | 2,114.8 | 2,413.3 |
Cash and cash equivalents at end of period | 1,435.8 | 1,910.6 |
Eliminations, Shelf Registration Debt Guarantor | ||
Operating activities | ||
Net cash provided by (used in) operating activities | (598.2) | (35.1) |
Investing activities | ||
Dividends and returns of capital received from (contributed to) unconsolidated entities | (326.5) | (590.2) |
Net change in other investments | 36.5 | 29.4 |
Net cash provided by (used in) investing activities | (290) | (560.8) |
Financing activities | ||
Issuance of long-term debt | (1) | (3) |
Principal repayments of long-term debt | 9.8 | 10 |
Net proceeds from (repayments of) short-term borrowings | (0.2) | (10.6) |
Capital received from (dividends and capital paid to) parent | 326.5 | 590.2 |
Net cash provided by (used in) financing activities | 335.1 | 586.6 |
Net increase (decrease) in cash and cash equivalents | (553.1) | (9.3) |
Cash and cash equivalents at beginning of period | (1,481.2) | (1,157.7) |
Cash and cash equivalents at end of period | $ (2,034.3) | $ (1,167) |