PRINCIPAL FINANCIAL GROUP, INC. (NYSE:PFG) Files An 8-K Regulation FD DisclosureItem 7.01Regulation FD Disclosure
This report is filed quarterly to disclose assets under management (“AUM”) by asset manager, prior to the availability of Principal Financial Group, Inc's (the "Company") quarterly earnings release. The amounts presented herein will be consistent with the format of AUM by asset manager and presented again in such format within the Company's financial supplement for the quarter ended September 30, 2018 when that document is posted to the Company's investor relations web site on or about October 25, 2018.
As of September 30, 2018, the AUM by asset manager were $426.5 billion for Principal Global Investors (“PGI”) and $157.5 billion for Principal International and Other Entities of the Company. Other Entities of the Company include Principal Life Insurance Company and Principal Bank.
Note: As previously disclosed, effective August 3, 2018, the Company agreed to a realignment of a real estate investment management team within the PGI segment. With the realignment, PGI no longer manages approximately $9.0 billion of assets for a large real estate client and will be reflected in the operations disposed line of the financial supplement for AUM rollforward purposes. As a result, the recognition of a performance fee that was earned due to successful management of the assets, which drove market value appreciation of the real estate investments, was accelerated. During the third quarter, the Company will recognize, within the PGI segment, approximately $250.0 million of fees and other revenue related to the performance fee. This will be partially offset by approximately $150.0 million of operating expenses related to revenue sharing arrangements, resulting in an approximate $100.0 million increase to income before income taxes ($70 million increase to net income).
The net impact of the accelerated performance fee will flow through non-GAAP operating earnings. Ongoing impacts to net income and non-GAAP operating earnings are not expected to be material.
About PRINCIPAL FINANCIAL GROUP, INC. (NYSE:PFG)
Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance services. The Company’s segments include Retirement and Income Solutions; Principal Global Investors, Principal International, and U.S. Insurance Solutions. It offers retirement and employee benefit solutions, and individual insurance solutions. It offers portfolio of products and services for retirement savings and retirement income. Its Principal Global Investors segment manages assets for investors around the world, using a multi-boutique strategy that provides diverse investment capabilities, including equity, fixed income, real estate and other alternative investments. It offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The U.S. Insurance Solutions segment provides group and individual insurance solutions.