Good morning, and welcome to Principal Financial Group's Second Quarter 2015 Financial Results Conference Call. There will be a question and answer period after the speakers have completed their prepared remarks. We would ask that you be respectful of others and limit your questions to one and a follow up, so we can get to everyone in the queue. I would now like to turn the conference over to John Egan, Vice President of Investor Relations.

Thank you and good morning. Welcome to the Principal Financial Group's second quarter earnings conference call. As always, our earnings release, financial supplement, and slides related to today's call are available on our website at www.principal.com/investor. Following the reading of the Safe Harbor provision, CEO, Larry Zimpleman, and COO, Dan Houston, and CFO, Terry Lillis, will deliver some prepared remarks. Then we will open up the call for questions. Others available for the Q&A are Jim McCaughan, Principal Global Investors, and Luis Valdés, Principal International. Some of the comments made during this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The company does not revise or update them to reflect new information, subsequent events or changes in strategy. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied are discussed in the company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed by the company with the Securities and Exchange Commission. Before we discuss the quarterly financial results, I want to announce an investor workshop we're holding on November 6 in New York City. Jim McCaughan from Principal Global Investors will discuss the benefits of the consolidation for our retail and institutional investment platforms which will further enhance our position as a global leader in the retirement investment management. In addition, our CFO, Terry Lillis, will provide information about enhancements for our financial supplement. The reporting changes will go into effect for our fourth quarter 2015 earnings release which will provide further clarification on the key performance metrics for our revolving and diversified business model. Now I'll turn the call over to Larry. Larry D. Zimpleman - Chairman & Chief Executive Officer: Thanks, John, and welcome to everyone on the call.…

And your first question comes from the line of Ryan Krueger with KBW. Ryan J. Krueger - Keefe, Bruyette & Woods, Inc.: Thanks, good morning. Terry, can you give a bit more detail on the expected amount of AXA closing costs and the timing of when those will hit? Larry D. Zimpleman - Chairman & Chief Executive Officer: Good morning, Ryan. I'll just have that go to Terry. Terrance J. Lillis - Chief Financial Officer & Executive Vice President: Yeah, Ryan, what we talk about in terms of the closing costs or any expenses that run through the Corporate segment, we look at a long-term basis. And we think that for the year we stated that $130 million to $150 million was going to be that number. Now, to-date, we have looked at a little higher costs and that includes the acquisition costs associated with AXA or any other business. It also included the costs associated with the preferred shares that we called this year. So we think that the run rate in the subsequent quarter will be about the same as it would have been that $32 million to $37 million range. Now, that being said, the AXA costs will probably come in, in the fourth quarter – excuse me, in the third quarter. We expect that to close on September 1. But we are going to have savings from the preferred share calls as well. So we think that that run rate will be about the same for Corporate in the third quarter as it has been in the past. We haven't really called out any AXA acquisition costs per se. Hope that helps? Ryan J. Krueger - Keefe, Bruyette & Woods, Inc.: Okay, got it. Yeah, it does. And then shifting to PGI, could you talk a…

Your next question comes from the line of Erik Bass with Citigroup.

Hi, thank you. This quarter, you had about $200 million or a little bit more of net debt issuance. Is this something that we should think of as potentially deployable capital that could take you above the $800 million to $1 billion target you have for 2015? Larry D. Zimpleman - Chairman & Chief Executive Officer: Yeah, Erik. This is Larry. First of all, of course, we were excited to have the opportunity to lower our overall cost of interest through the kind of restructure with the senior debt and junior subordinate is and then taken out the preferreds. As you noted, the net there was about $250 million. And really there wasn't – I mean, the primary thinking there was simply that the market opportunity was very great. There was tremendous demand for each of those two tranches, and it just seems like a very good time to be in the market. We don't necessarily have a plan as we sit here today for that $250 million, but, as I said in my comments, there is kind of a steady flow of opportunities that come along. So while I don't forecast or expect that we'll be deploying that in the near near-term, I do think over time if we can find an interesting opportunity, it obviously gives us just a little more cushion. So we feel good about that.

Got it. That's helpful. Thanks. And then, Larry, if you could maybe go into a little bit more detail on your comments around the DOL rules potentially leading to higher asset retention rates over time, just maybe why you think this could be the case? Larry D. Zimpleman - Chairman & Chief Executive Officer: Yeah. Well, first of all, again, I've been around a very long time, as you know, Erik, and I've seen about 40 different legislative or regulatory changes, although I would be the first to say this one is of more significance than most. But it seems to me – it seems to me that the primary area here that the DOL seems to have some concern about is, with respect to what happens with retirement assets when a benefit event occurs. And while Principal has been a bit of an exception to the industry, when you look at the industry, a very high percentage of those assets at benefit events, so if a person terminates or retires, at benefit event those assets go into a rollover IRA. Now, I think there's plenty of very logical reasons why that happens because usually at that point that person at benefit event wants to move into a more individualized or retail relationship and a rollover IRA is a great fit, but what the DOL proposal would do is clearly put up, what I referred to, as sort of some flashing yellow lights around that; in other words, a significant amount of transparency and disclosure, a signing of some additional forms, et cetera, et cetera. So I think if Principal can continue to be creative with our in-plan solutions, I think the easier path for benefit event going forward, the easier path could well be to find a way to keep those assets inside the plan, but in enough of a separate mode, if you will, that individuals who terminate or retire will feel comfortable doing that. And we've got a team that's working really hard on that. And I'm sure they're going to come up with great ideas. So I think that's what is going to potentially lead to improved asset retention over time, is simply that the balance changes and it isn't so automatic that the money goes into a rollover IRA, there'll now be more equivalence between moving to rollover IRA or staying inside the plan, and I think that's a big opportunity for us.

All right. Thank you. Appreciate the comments. Larry D. Zimpleman - Chairman & Chief Executive Officer: You bet.

Your next question is from the line of Steven Schwartz with Raymond James. Steven D. Schwartz - Raymond James & Associates, Inc.: Hey, good morning, everybody. Terry, a quick numbers question for you. Talking last night with Brenda (35:24) about the FSA tax rate being so low, and you noted it was lower than you expected because of the DRD. I don't expect dividends for corporate America to go down anytime soon. Is it possible that the tax rate FSA stays lower for longer than you would have ever expected? Terrance J. Lillis - Chief Financial Officer & Executive Vice President: Thanks, Steven. One of the things that I think it's pretty important is to look at the effective tax rate at the total company level, rather than any individual business units, albeit I'll answer your question in a second here. But I do think that you'll see distortions that could occur in any particular period, so we do take a longer look at this. And so, one of the things that we believe that the effective tax rate for Principal in the total is probably in that 20% to 22% range, now that takes into consideration the DRD that you mentioned, also foreign tax credits that we would get from our international operation, and also some accounting noises that we're getting here. But one of the things associated with the DRD is that right now we see that we're getting a bigger benefit than we would have normally seen, and because as you mentioned, companies are paying more dividends now than they were. Now, is that trend going to reverse in the future? We all have our opinion about that. And I don't think that that's really going to be the case. But I think another thing that's probably…

His line's disconnected, sir. Larry D. Zimpleman - Chairman & Chief Executive Officer: Yeah, just go. Daniel J. Houston - President, Chief Operating Officer & Director: Okay. I'll go ahead and answer the question even though it looks like Steven may have dropped off. So, two things. We get about 5% of our asset flows through our proprietary distribution. We receive about 10% of our case counts comes through proprietary distribution. But, again, as Larry was outlining his comments on DOL, we don't think that's going to have a measurable impact on how we go about continuing to support the Principal advisor network in the future. We have had a strong history in the past of selling our plans with and without proprietary investment options. And, again, we don't see that becoming a challenge, nor do I see it becoming a substantial issue that will require adequate disclosure as we retain assets that benefiting for those people who are changing jobs or retiring. Larry D. Zimpleman - Chairman & Chief Executive Officer: And this is Larry. And to the extent that Steven was asking about deposits, what I can say is that, so far, about 60% of our deposits into the Full Service Accumulation business go into kind of Principal proprietary or multi-boutique manufactured solutions. So, again, that's a strong number, but when you have virtually 90% of your investment options in the top half of the Morningstar peer rankings on a one, three, and five-year basis, I think that's very, very well earned. So, it's certainly is one of the differentiators is our ability to drive assets into proprietary options.

And your next question is from the line of Colin Devine with Jefferies.

Good morning. A couple of quick questions. Just exploring the DOL situation a little bit more, Larry, and I know it's hard to put a – much of a hard number on this, but if one outcome was you saw a reduction in proprietary funds in your plans, so let's say they were down 10%, how significant, if you can give us some idea, would that be for PFG's earnings? That would be the first question. Larry D. Zimpleman - Chairman & Chief Executive Officer: Sure. Well, to be candid, Colin, I don't have a numerical number for you. And that's not really at this point, to be honest, anything that we've modeled in particular. I think that it's been clear to me – now, others may have a different opinion, but it is clear to me that the focus here isn't really around proprietary assets. And certainly the PGI options are very much standing the test of time with respect to performance and appropriateness for retirement plan investing. So, if for some reason that were to, again, have a higher threshold with respect to your own proprietary assets, which I think we can meet any threshold, but we'll do the same thing we've done for the other 40 legislative regulatory changes. We'll take a look at it, we'll adjust, we'll adapt, we'll find a path forward and net-net, Colin, as I said in my comments, I really believe that what's going to continue to happen is market share is going to continue to move from second and third tier providers to first tier providers. And I certainly consider Principal in that top tier. James P. McCaughan - President, Global Asset Management & Chief Executive Officer, Principal Global Investors: And Colin, can I add, please, to what Larry said. If we did get into a situation, and reiterating we don't expect it, where some unexpected feature of the DOL changes led to headwinds for our proprietary assets and to our Full Service Accumulation, then you would be in a situation where there was a huge opportunity on other people's platforms for our strongly performing investment options with very strong multi-asset and outcome oriented capabilities. So the situation you outlined could actually be a really good one for us given the choices we would have on other platforms.

Okay. Thank you for the comments on that. Because I think that certainly is one risk that people foresee is out there. Changing the subject a little bit with the DOL, if we look about what – and frankly, what you're doing right now in terms of in-plan annuities, can you talk a bit about the potential for that? Are you starting to see any measurable take-up on the sort of qualified life annuities? Larry D. Zimpleman - Chairman & Chief Executive Officer: Yeah, I can have Dan comment, too. I would say, first, with the direct question you asked with respect to the qualified life annuities, Colin, I think there's – it's fair to say there's interest, but there's not really much in the way of actual usage of that at the moment. And I don't think it has anything to do with DOL or retirement plans. I think it has to do with the low level of interest rates. So I think that's really a question of if and when interest rates increase, then I think there would be more consideration of that option. Obviously we put a full or will put and are putting a full array of in-plan solutions and have had for years, frankly, a full array of in-plan solutions inside of our qualified plans. And that includes all the way from, of course, at benefit events simply leaving in a personal retirement account. Again, it's kind of a quasi-separation from retirement plan. So that's more of an individual relationship, but the plan assets are still in-plan. It includes opportunities for systematic withdrawal for retirees, so if retirees decide they don't want to buy a fully guaranteed life annuity but they want to get systematic withdrawals, we can do that. Or, as we just said,…

Thank you. Now I have two final ones. M&A is clearly the topic of the day perhaps. As we look at look at the group business, Larry, Dan, what StanCorp went for (46:10), obviously your group business is doing very well. But it's not necessarily core to your retirement business. Does this give you pause to sort of rethink that? With that, is there any update perhaps you could share on where your largest shareholder stands in terms of Nippon Life? And then one other one for Larry. With respect to retirement at Principal, is it mandatory at 65? I appreciate you're sort of within a year of this now. Larry D. Zimpleman - Chairman & Chief Executive Officer: Okay. Thanks, Colin.

It's got to be asked at some point, Larry, I know. Larry D. Zimpleman - Chairman & Chief Executive Officer: Yeah, yeah. And the company might be the better for it, Colin. We'll see. With respect to the group business, again, appreciate your question. I would say the group business is really is strategic for us and offers a lot of really competitive advantages for us. It certainly continues to introduce us to a lot of brokers. It's very key for small-medium business, which is really the heart of our strategy. And probably as important in an element we don't necessarily give as much commentary about is, as I said in my comments, it is a great diversifier. And so from an overall company perspective, the quarter-by-quarter stability and the fact that the things that drive the group insurance business are not the things that drive fee-based businesses, we think is a real advantage for the company. So I know the board is very happy with how that business has been run. We have a tremendous team there led by Deanna Strable, and of course Dan as well. And I foresee us continuing to grow our market share in the group business and in the voluntary business. With respect to Nippon Life, I mean, they have been a large share – they've been a meaningful shareholder, but that's a 25-year relationship. And so it really just reflects a long-term view I think on their part and a good relationship between our two companies. But at the end of the day, we are executing on businesses, the retirement business, the mutual fund business, the asset management businesses that are not really consistent with the businesses that Nippon Life has been in historically and continues to have an interest in, which is…

Thank you. And I think they'll have a tough act to follow, but thanks. Larry D. Zimpleman - Chairman & Chief Executive Officer: Okay, Colin. Appreciate the words.

Your next question is from the line of Seth Weiss with Bank of America.

Hi, thanks for taking the question. I'd like to follow up on the theme of the Department of Labor and maybe specifically more so related to the seller's carve-out and the platform provider carve-out. I understand this is a fluid situation in terms of how the rules develop, but as written, what's your interpretation of the platform carve-out and how much of the business, particularly in the small case might apply to that exemption? Larry D. Zimpleman - Chairman & Chief Executive Officer: Seth, this is Larry. I'll just have Dan comment on that. Daniel J. Houston - President, Chief Operating Officer & Director: Yeah, Seth. Thanks for the question. And frankly, I think again, it's way too early to speculate. There's a lot of ground to still cover, not just about the carve-out but the balance of the regs that have been presented. And so when I think about this topic, I really start at the top and think about the DOL. They don't want to see workplace retirements to go away. There's no question in my mind about that. The second is if you look at the workplace retirement savings in the past, there's $22.5 trillion that's now been saved in the public and the private sector between DB and DC. Of that, $15 billion is defined contribution and IRAs, rollover IRAs for the most part, that's $15 trillion that have been saved in a voluntary system primarily through the workplace. You can look at the last few years, there's better plan designs that should improve coverage and adequacy. Advisors clearly have contributed in a meaningful way to the success of the workplace retirement plans as we know them today. And the reality is the average American worker needs advice and guidance and left to their own devices…

That does. And if I could just follow up on the topics of proprietary products, and I appreciate the commentary in terms of leading performance of Principal products and appropriateness of those suggestions. Just to be explicit about it, as currently sold, do agents – are agents' compensation directly tied to the uptake of proprietary products or is it completely independent of uptake of Principal's products among plan participants? Daniel J. Houston - President, Chief Operating Officer & Director: It's levelized commissions. It doesn't differentiate. Larry D. Zimpleman - Chairman & Chief Executive Officer: It's levelized commissions and proprietary or other assets are not a factor in terms of any compensation for the financial advisor. Daniel J. Houston - President, Chief Operating Officer & Director: I would say, Seth, to this point, and I appreciate the question, we're winning investment mandates because we got 91% of our investment options in the top two quartile rankings of Morningstar, that is just lights out performance for five year. One and three year kind of in that 87% plus. And, again, I can't emphasize enough, we've been in an open architecture choice environment for a decade. And employers know that, participants know that, and certainly the advisors know that. So, again, I don't think there's any sort of – because Principal provided the record keeping administration, they "had to take the proprietary options". They're separate decisions and, again, it's strong performance. And, frankly, strong performance across a broad set of asset classes made available. We've got 100% of our target date series in the top two quartiles. And, again, that's going to capture about a one-third of the assets. So, it will be open architecture, it's going to continue to be competitive. And even with the DOL, we'll have to continue to adequately represent the product for what the cost is and what the performance is.

Great. Appreciate the comments. Larry D. Zimpleman - Chairman & Chief Executive Officer: Thanks, Seth.

Your next question is from the line of Suneet Kamath with UBS.

Thanks. Good morning. Just wanted to start on the share repurchase program and just the way that you guys talk about capital deployment. So, the $150 million board authorization, so that is what you are committing to do in 2015? Larry D. Zimpleman - Chairman & Chief Executive Officer: We don't have any fixed period on that, Suneet. So, as we said in the opening comments, we are or have in the third quarter repurchased a very modest amount of shares with respect to that part of the authorization. But our strategies are always kind of open-ended with respect to that and it's very situational based on what we think is the most effective use of the capital at the time we put it to work.

Okay, got it. And then when we think about the benefit event that you talked about with respect to the FSA business and 401(k) rollovers, what – and maybe you answered this and I just missed it, but what percentage of the money in motion at those events goes into either a Principal Fund or a Principal Annuity, be it fixed or variable? Terrance J. Lillis - Chief Financial Officer & Executive Vice President: I think what you're asking there, Suneet, is kind of what percentage – so, again, we retain about 50% of assets at benefit event. And then part of that question is how much of it ultimately, I think, finds its way into, I will say a rollover IRA at Principal where it might go into an individual annuity or a mutual fund. As a respect of – again, one of the very popular options is what we called the personal retirement account, where the person simply continues to leave their assets invested as they were often prior to retirement. And their sort of account is walled off in terms of personal retirement account. And that is the single most popular choice at benefit event. And then they can make subsequent decisions on that. So, Dan, comments on how much is PRA versus goes into other retail products? Daniel J. Houston - President, Chief Operating Officer & Director: It's about half and half. Larry D. Zimpleman - Chairman & Chief Executive Officer: About half and half.

Got it. Okay. And then just the last thing for Terry on the increase in annuity earnings run rate. I think if I think back to what prior guidance was it looks like maybe a 10% increase midpoint to midpoint. Account value growth has been much lower than that, 10% I think it's been more like 2%. So is there anything going on there that's giving you the confidence to raise your earnings guidance, especially given the interest rate environment remains challenging? Terrance J. Lillis - Chief Financial Officer & Executive Vice President: Suneet, there's three different types of businesses within our Individual Annuity. You have the variable business that we sell through our proprietary network. We also have immediate or income annuities that we sell through a couple of different channels and then the fixed deferred annuity is also sold through bank channels. Now that fixed deferred annuity you're seeing spread compression in that, and so that's really been kind of a drag on operating earnings over the last few years. And it's really declined from probably closer to 60% to 70% of the account value. Now it's down in that 40% range. You're seeing a growth in the variable at a bigger pace. Now, that variable annuity is, again, it's probably closer to 45% of the account value, and probably closer to 50% of the earnings of that business. And that's growing at a little bit faster pace as well. Now, the third piece that I mentioned was the income annuities, and we've had a pretty nice, steady run on that business again; and that business, albeit, it's only probably around 10% of the account values and maybe 15% of the earnings. But those two, income and variable annuities, are growing faster than the fixed deferred annuity piece. And that's why we're seeing a little bit more of an uptick in that run rate for that business. Albeit, this quarter, we did have some strong variable investment income that we had called out, so that's why we thought that $32 million to $36 million is a good run rate for that business. Hope that helps.

Yeah, it does. Thanks.

We have reached the end of our Q&A. Mr. Zimpleman, your closing comments, please. Larry D. Zimpleman - Chairman & Chief Executive Officer: Thanks, everybody, for joining us for the call today. We're very, very pleased with our performance in second quarter, and frankly, our performance over the recent quarters and certainly in 2015. And we look forward to continuing that business momentum going forward. So thanks again for listening. Hope everybody has a great day.

Thank you for participating in today's conference call. This call will be available for replay beginning at approximately 1:00 P.M. Eastern Time until the end of the day, July 31, 2015. 71099087 is the access code for the replay. The number to dial for the replay is 855-859-2056 for U.S. and Canadian callers or 404-537-3406 for International callers.