Business Context and Reporting Period
Company: Principal Financial Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: March 14, 2019
Subject: Regulation FD Disclosure regarding changes to segment reporting methodologies effective January 1, 2019.
Key Financial Metrics
This filing does not report specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on the methodology for allocating compensation, other expenses, and net investment income among reportable business segments.
Material Changes Versus Prior Period
- Allocation Methodology: Effective January 1, 2019, the Company implemented changes to the allocation of certain compensation, other expenses, and net investment income across segments.
- Driver: Changes resulted from an enterprise-wide global financial process improvement project.
- Impact on Totals: There is no impact to total Company financial results.
- Recasting: Segment results for prior periods will be recast to ensure comparability on a new basis.
- Illustrative Data: A recast, reformatted version of the fourth quarter 2018 financial supplement has been made available on the Investor Relations website for illustrative purposes.
Guidance, Outlook, and Management Commentary
Management states that the expense allocation changes are intended to simplify allocation processes, increase transparency, and allow for more effective expense management. The net investment income allocation changes are designed to better align internal capital allocation with enterprise capital targets. These changes were previously highlighted during the 2019 Outlook call on December 3, 2018, and in the Annual Report on Form 10-K filed on February 13, 2019.
Investor Verification Checklist
- Verify the recast, reformatted financial supplement for the fourth quarter of 2018 on the Principal Financial Group Investor Relations website.
- Review the Annual Report on Form 10-K (filed February 13, 2019) for detailed context on the 2019 Outlook and segment definitions.
- Confirm that total Company financial results remain unchanged despite the segment-level reallocation.