Good morning, and welcome to the Principal Financial Group First Quarter 2016 Financial Results Conference Call. There will be a question-and-answer period after the speakers have completed their prepared remarks. 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 first quarter conference call. As always, our earnings release, financial supplement and slides related to today's call are available on our website at principal.com/investor. Following the reading of the Safe Harbor Provision, CEO, 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 Nora Everett, Retirement and Income Solutions; Jim McCaughan, Principal Global Investors; Luis Valdés, Principal International; Deanna Strable, U.S. Insurance Solutions; and Tim Dunbar, our Chief Investment Officer. 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, filed by the company with the U.S. Securities and Exchange Commission. Now, I'll turn the call over to Dan. Daniel Joseph Houston - President, Chief Executive Officer & Director: Thanks, John, and welcome to everyone on the call. This morning, I'll provide some high-level comments on the quarter. I'll also then give an update on how we continue to execute on our strategy, with a focus on long-term growth and generating value for our shareholders. I'll also provide some color on the Department of Labor's final fiduciary regulation, and the opportunities and the impact on our business. I'll then turn the call over to Terry, who will provide additional details on financial results. As John mentioned, slides related to today's call are available on our website. The key themes are outlined on slide four.…

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

Hi. Thank you. Jim, I was wondering if you could talk about the factors that pressured PGI margins this quarter? I know there are a couple of timing items on fees and other things. And what your outlook is, going forward? And how you think about balancing margins with investing for growth, particularly if markets remain choppy? Daniel Joseph Houston - President, Chief Executive Officer & Director: Hi, good morning, Erik. This is Dan. Thanks for the question. And you're right, let's get right to it and have Jim delve into some of those details. Jim?

Yeah, thank you, Erik. You all have seen from page three of the supplement that management fee revenue on a trailing 12-month basis, we show that in this thing called other revenue. The two biggest parts of other revenue are borrower fees on commercial mortgage origination and incentive fees on various strategies from hedge funds to real estate funds to various institutional accounts that have an incentive fee. So those are shown in other revenues. And you'll see, if you look back at the trailing 12-months, that's been typically, give or take, 20% to 25% of our total revenues at PGI. It's been pretty steady. What's happened during the first quarter is that borrowers on commercial mortgages delayed closing because of market instability, and it so happened – this is partly random, actually, that the incentive fees were actually basically zero in the first quarter. Now the incentive fees can be on a one-year cycle, a three-year cycle, or be dependent on the realization of the underlying asset. Those are really the three ways they tend to operate. And most quarters we get some, they're as you know, back-end loaded to the fourth quarter, which is partly why we show trailing 12-months in the supplement. But this preamble is really a build up to a couple of numbers I can give you, if I can identify them here in my notes. If you look at the quarter, the year-ago quarter, just for example, was a typical 20% other-revenue quarter. We had $264.2 million of management fees and $64.7 million of other revenue. The quarter just ended that we're reporting on had $265.4 million of management fees, so actually up slightly on the year-ago quarter, but only $44.2 million of other revenue, as all the phenomenon I mentioned were slowing client activities. We have done a pretty thorough bottom-up analysis of what other revenues will look like during the rest of the year. And we are basically anticipating that the year will be much more typical over the last two years or three years, and that really what has happened is a little bit random, but more important, the client activities will pick up again. So we remain pretty perky about what the year as a whole will look like.

Thank you. That's helpful. And then, so I guess two things. So it sounds like you're still comfortable with what your margin targets that you've laid out for the full year. And then secondly, just on the thoughts around balancing investment for growth, with maintaining margins in the short-term?

Yeah thank you, Erik. Yeah, absolutely. The slight depression of margins taking the first quarter on its own was simply due to a relatively low, an anomalously low revenues for the reasons I described. We're pretty confident that the 33% to 36% range that we mentioned for return on net revenue in the guidance call in December, that remains a pretty good guide to how we'll look for the year on all current indications. In terms of investment for growth, as you know, we're one of the few global asset managers who's actually growing revenues at the moment. There's a lot of rather vicious industry headwinds. The volumes in new business we're taking on are definitely leading to elevated costs, both the costs of taking the business on in terms of commission and set-up expenses, but also developing our sales force and our ability to serve clients, whether it's new share classes in mutual funds or new offices internationally, those are all expansionary things we're doing, but they're all costing money. And that's why 33% to 36% remains our guideline, not higher. There are asset managers with higher margins, there's a few, but they are mostly firms who are not growing, or even in some cases shrinking. I would rather have our balance. But I hope that answers the question, Erik.

Your next question - Daniel Joseph Houston - President, Chief Executive Officer & Director: Very good. Thanks, Jim. And, Erik, just one other comment I'll make relative to PGI, that gives me a lot of confidence about, Jim's recovering on the revenue line there, we still have very strong investment performance. Those three-year and five-year numbers are very strong, and if you look across the asset classes, again, whether it's fixed income, alternatives, real estate or equities, very strong performance in each one of those. And very broad distribution, both proprietary distribution, as well as third-party distribution. So a lot of very positive momentum behind Principal Global Investors to work with the rest of the organization. With that, we'll take the next question, operator.

Next question comes from the line of Ryan Krueger with KBW. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Hey, thanks. Good morning. I guess I have, also, an expense question, but more for the overall company. It seemed like you held down expenses pretty well in the first quarter, in a tough revenue environment. Can you talk a little bit about expectations for the rest of the year? And if you've been doing anything specific to cut back on expenses, given the choppiness out there? Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah, Ryan, I think what we want to do is be very smart about how we manage our expenses relative to our ability to increase revenues, do away with products and services customers are no longer willing to pay for. And then also ensure that we're making those proper investments, as Jim was describing, with that as a backdrop, I'll have Terry add some additional detail. Terrance J. Lillis - Chief Financial Officer & Executive Vice President: Yeah, thanks, Ryan for the question. As we talked about in the past, we look at the relationship between our growth in our revenue and our growth in our expenses. We've always tried to have this 1% to 2% differential, i.e. the revenue growing faster than expenses. But when you look back to 2014 as part of the trailing 12-months, and as always, we try to look at it over a longer period of time because of some volatility that could occur in any one particular period. 2014 was a pretty tough comparison because of the strong revenue growth, as well as the expenses that we had. So, looking at it in terms of more of a sequential basis, you've seen a pretty significant reduction in our…

Your next question comes from the line of Steven Schwartz with Raymond James. Steven D. Schwartz - Raymond James & Associates, Inc.: Good morning, everybody. A couple on the DOL. First, could you discuss maybe affiliated distribution? How their payments might change under the final rule, from what currently exists? Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah, be happy to do that. And I got to tell you, Steven, I just want to make a couple more comments on DOL more broadly, just to set the tone, in addition to my earlier prepared comments. We just can't, as a country, lose the fact that we've amassed $15 trillion in roll-over IRA's, 401(k)s. Another $7 trillion in defined benefit. There's $22 trillion in this country, which arguably would make it the most successful retirement system anywhere in the world. Secondly, the DOL, I believe their intentions are good. When I think about the intent of the law, it's to protect the interest of the U.S. retirement savers. It's about creating transparency around cost and benefits and value. It's also about making sure we have access to the competitive marketplace. There are some unintended consequences, and it's what Deanna will respond to in just a minute, relative to working with advisors. There's a view that the robo-solution solves all problems for small account balance holders. That's just not the case. And so, we have some more work to do there. The second is, we want to make sure that we're not creating barriers that reduce the number of advisors that have in the past, and will in the future, provide important education to individuals and to savers. And then, we also want to make sure that we don't limit the number of individualized solutions that we can present to planned participants. They're very dependent on that enroller, if you will. So with that as a backdrop, I'll ask Deanna to weigh in on the implications on Principal Advisor Network, and how we might have to do things slightly differently. Steven D. Schwartz - Raymond James & Associates, Inc.: Dan, thank you.

Yeah, thanks. Just a couple of comments. And first of all, I want to put into kind of context, the impact on our affiliated distribution. And so, first, I think it's important to point out that our advisors sell and service across the entire range of product offerings, including many products within Principal that are not impacted by the DOL regulation. In fact, the majority of that system's revenue comes from transactions that aren't impacted by the proposal. Having said that, I think there's a couple of points that I think is important to keep in mind, as we think about even those products that do fall under the regulation. First of all, as Dan mentioned in his opening remarks, the final regs did allow for a path forward on proprietary products, and that applies to both funds within a retirement plan, as well as retail products sold at the time of either retirement or when participants change jobs. I think the other thing to keep in mind is, our affiliated advisors already today have choice. We have both proprietary and non-proprietary products and solutions. And our proprietary offerings will have to continue to compete on items such as investment performance and service, as they do today. So, we will have some business model changes for that channel. That'll come in the realm of compensation changes, like you mentioned, compliance. But I think we're very confident that our business model can adjust, and feel good about our ability to comply, as well as continue to stay focused on meeting the needs of those customers that we serve. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. Deanna, if I remember correctly, the affiliated distribution does get paid more on proprietary. My understanding is that you could still do proprietary, but if you're going to use the BIC, that has to go away? Is that right?

Yeah, and those are things that we are looking at. In some of the places, we already have some comp leveling already in place, and other places, we will have to adjust. But I think it comes back to, our advisors already tried to do what's in the best interest of those clients. And, ultimately, we have great investment performance, we have great product features and good solutions, that we continue to feel that we'll have the ability to service our customers and sell both our products and the non-proprietary products within the platform, going forward. Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah, levelized commissions have been in place, Steven, for a long time. This is Dan. Levelized commissions have been in place for a long time. And I think it's only on the margin that we've had any additional sort of compensation, and that's going to be rationalized across the entire industry. And so, again, I don't see that as an impediment to the Principal Advisor Networks to continue going about doing what they do today, which is taking care of the customers and the participants. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. And on the independent side of distribution, do you have distribution in which you will be considered the financial institution? Daniel Joseph Houston - President, Chief Executive Officer & Director: I think that is on a very limited basis. And the way I would describe that is, already within our call centers, we are providing information, we're providing some education, and we're not dispensing advice. As you know, our wholesalers work with independent third-party administrators. They work with wire houses, and all of our alliance partners to distribute our product. We don't sell these plans on a direct basis. It's the advisor who would be acting in the capacity of the fiduciary, in order to help them pick and choose the investments in these plans, so... Go ahead. Steven D. Schwartz - Raymond James & Associates, Inc.: Well, Dan, that's what I'm asking. What I'm asking is, you have a situation over in West Des Moines here, where the insurance company deals with independent agents, and would be considered a financial institution, under the BIC. And the question is, how can they be the financial institution, have the liability, and still be able to manage independent people who are going to do what they're going to do? Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah. Good question. Let me add – Nora, is going to weigh in here and provide some additional color for you on that specific question.

Yeah, Steven, that's not our model. They've got a different model than we have. And if you're talking about the retirement business that Dan was addressing. Steven D. Schwartz - Raymond James & Associates, Inc.: Yeah.

Our model, as Dan said, is we're going to – we'll have a wholesaler who is working with that independent advisor, but to that point, that independent advisor in their firm would take on the obligations under the new DOL rule. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay, All right, thank you. That's what I wanted to know, Nora. Thanks. Daniel Joseph Houston - President, Chief Executive Officer & Director: All right. Thank you. Appreciate it, Steven.

Your next question comes from the line of Sean Dargan with Macquarie. Sean Dargan - Macquarie Capital (USA), Inc.: Thanks. Good morning. I was wondering if, Dan, you had any update on the board's thoughts of the CFO search? Daniel Joseph Houston - President, Chief Executive Officer & Director: Sure. Sean, thanks for the question this morning. Terry's a tough guy to replace. We all know that. And we do have a search going on for both internal and external candidates. There is a, what I would consider to be a really good pool of candidates out there. We'll have a board meeting later in May, at which I'll provide an update to the board on progress that we're making towards that end. But Terry's committed to staying on board as long as it takes, in order to get the new person appropriately aligned and on board here at Principal. So, again, we feel very good about where we're at today in that search process. Terrance J. Lillis - Chief Financial Officer & Executive Vice President: Sean, this is Terry. Thanks for the question. Appreciate it. Sean Dargan - Macquarie Capital (USA), Inc.: You're a hard man to replace, Terry. Given the $400 million authorization you got during the quarter, and where your shares were trading, I'm just wondering why – or if you can share with us your thoughts on why you didn't put the, I guess, the pedal to the floor and buy more stock when it was down at those levels? Daniel Joseph Houston - President, Chief Executive Officer & Director: Well, the first thing I would say is you never know what level the stock is ever going to trade at. And so, again, we're very disciplined on how we go about executing on the share…

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

Thanks. Good morning. Just wanted to go to the FSA business. You talked about hitting the 1% to 3% beginning of period, in terms of sales or blows in (44:40). I think in that commentary, there was some talk about balancing growth and discipline. So can you just give some color on what you're seeing in the pricing market in the 401(k) business? Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah. Thanks for the question, Suneet. Appreciate that. I'll make a couple of comments and throw it over to Nora. Clearly, there is a lot of questions being asked today in the qualified retirement plan market, with all of the DOL overhang, that's starting to consume, I think, a lot of people's time as they advise their clients on what's transpiring. Because this, as you know, has hit mainstream media in terms of the issues. We did an outstanding job in the current quarter retaining clients. We did a nice job acquiring clients. Strong investment performance certainly helped contribute to that success. Having said that, again, net cash flow was healthy for us, but these are things that are a little bit lumpy. And I'll have Nora kind of weigh in now and talk about some of that lumpiness and her views broadly on the FSA line.

Sure, thanks, Suneet. Good question. We certainly believe we're striking the right balance, and we think we have the proof points for it. With the kind of plan retention we're seeing, with the kind of sales we're seeing, we're always looking at – obviously, we've got a competitive market we're dealing in. But one of the things that we're seeing is, in particular in that small-to-medium, that core segment of our market, we're seeing just a tremendous opportunity for us as we move in that space. And what we've seen is, as we look at that growth both in our sales and retention that that's the piece of it that is really outperforming for us. The lumpiness that we talk about or the volatility we talk about comes when one or two larger cases, so you think in terms of $500 million, or north of $500 million. Now, oftentimes when we talk about the discipline between growth and profitability, it's with those larger cases and making a decision that we're not willing to race to the bottom on pricing. So that's the kind of lumpiness you'll see, and that's why we'll have quarters like we had this quarter with a $3 billion really outstanding net cash flow, but we don't want to get over our skis extrapolating that because we will have one or two large plan decisions over the year that will move that number, which is why we continue to reaffirm the guidance that if we look at a full year rather than quarter-to-quarter, if we look at a full year, we're confident, given what we see today, that we're going to be well within that 1% to 3% of beginning of year account value. But the caveat that we always throw out is because our core business is small and medium businesses, when you have one or two of those larger cases moving in or out, that can swing the numbers, which is why we tend to look full year rather than quarter-to-quarter.

That makes sense. But just to come back to the large account side, can you just give some quantum, in terms of how much pricing has changed, maybe year-over-year, in that large case market? Acknowledging that that's opportunistic for you?

Yeah. It some – there hasn't been in, from what we see it's not a year-over-year comparison. That large-case market has been extremely competitive for many, many years. And where we compete in that large-case market is one, investment performance, and Dan and Jim have talked about that, especially in that key asset class of Target Date. We have a tremendous amount of choice there, we've got extremely strong investment performance. So we compete in that space very well with regard to that suite, those key asset classes. In addition, on the service side, because of our scale, we're able to move up and down, whether it's a small business, a medium business, or a large business. And we've scaled our service platform to the point where that is seamless for us. So we compete very well in that space, both on the investment side and the service side, but, again, we're going to always be disciplined around this growth and profitability axis. Daniel Joseph Houston - President, Chief Executive Officer & Director: Suneet, this is Dan. Just a couple of comments. The TRS, the total retirement suite still is a very, very powerful tool for the Principal that can differentiate value from pure 401(k) players. And so that again is a differentiator – frozen defined benefits, deferred compensation, ESOP had a nice quarter here. So that is a nice differentiator. The other point I'd make is, because it was this generalization of large-case pricing, there are so many components that go into the pricing of a large plan. How many payroll centers, what is the current penetration rate relative to participant involvement, what is the customized communications package. All of those variables go into it. So when we lose a plan or win a plan, it's because we've done the homework behind the scenes to understand exactly what kind of resources are going to have to be deployed against that plan. So that's why at any given time you could lose a plan or win a plan. But, again, we like the model that we have. We think it resonates in the marketplace, and our retention rates would imply that those large plans appreciate it. Hopefully that helps.

No, it definitely does. One last quick one – or maybe not so quick. But as we think about the DOL, I think we all know there's been some fee pressure in the 401(k) business just for years. But do we think, or should we think, that the DOL rule could accelerate some of that pressure? Terrance J. Lillis - Chief Financial Officer & Executive Vice President: I don't – well, I think, as you pointed out very appropriately. And frankly, it's not limited to just this industry, it's all industries, where there's constant pressure. It's one of the advantages for being a leader in an industry, having critical mass and scale and capability, and having great partners out there. I would not anticipate there to be any pressure coming off fee structures because of DOL. Could it cause some additional discussion? It should, because it's really around transparency and making sure that people understand what they're paying and what they're getting for their money. So, again, I think on a marginal basis, I think we'll continue to have a lot of dialogue around cost and pricing. And Nora wanted to make one more comment here.

Yeah, Suneet, I think the one phenomenon that we expect is that when you look at the complexity of this reg, when you look at compliance cost, you really need to be a player that's at scale. You need to be a player that can come to the market, not just at scale, but with the kind of expertise to deal with this ERISA fiduciary duty. And when you think about that, the logical conclusion is you're going to have subscale players or folks that don't have this as their core business, having a moment in time here where they may be moving out of the market. So we see it as an opportunity around consolidation. And I think that goes back to your question about pricing. I think the irony here is that those of us who are at scale that have the expertise are going to stay in the market, and I think there will be a number of players who will take this as their opportunity to exit the market.

Got it. Thank you very much. Daniel Joseph Houston - President, Chief Executive Officer & Director: Thanks, Suneet.

Your next question comes from the line of John Nadel with Piper Jaffray. John M. Nadel - Piper Jaffray & Co. (Broker): Hi, good morning, everybody. I guess Dan, one maybe bigger picture question, as it relates to DOL. Do you think it has any impact on the pace of the rollover market? Daniel Joseph Houston - President, Chief Executive Officer & Director: Good question. So good morning, again, John, to you. John M. Nadel - Piper Jaffray & Co. (Broker): Good morning. Daniel Joseph Houston - President, Chief Executive Officer & Director: I think what it's going to cause is at the inflection point of a job changer or retiree. They're going to call into a call center like they always have, because that's the typical sort of process. And they're going to be having a conversation with a person providing education and guidance. And they're going to disclose what the pricing is in the current plan structure, in a qualified retirement plan, and it could be a larger plan. And there's going to be a certain price. And they're also, as they always have in the past, disclosed to them that there are other options for them to consider. They could move that money to a rollover IRA with the Principal, or they could rollover that money to a third-party, and the names are common. You would know all of those. And the burden that now falls on the advisor is that the participant has a very clear understanding that they're moving from one product to another. And they have to look at it on a couple of different dimensions. One dimension, of course, is the investment lineup. Is it same or is it different? Another dimension is what's the underlying performance of those investment options? The third…

Your next question comes from the line of Michael Kovac with Goldman Sachs. Michael Kovac - Goldman Sachs & Co.: Great. Thanks for squeezing me in. One more on international here, actually. Looking at China, which was actually very strong growth in the quarter, on a flows basis and an operating income basis. How sustainable do you think that is, both in terms of, obviously, very rapid growth, but also in terms of the persistency of the assets that are coming in? Daniel Joseph Houston - President, Chief Executive Officer & Director: Yeah. That's a great question, and frankly, Mike, we're really enthusiastic about China. You heard our earlier comments around reaching an agreement with the memorandum of understanding with China Construction Bank for now 11 years. It's just been a terrific partner for Principal. We were over there recently, and celebrated our 10-year anniversary. It's important to recognize those sorts of milestones. And as you point out, the flows and the earnings are now starting to be generated after a long incubation period. But with that I'll ask Luis to make some additional comments. Luis Valdés - President-Principal International: Yes, Mike, this is a pretty interesting question, as well. Net customer cash flows, as you could see in our supplement, we're reporting $17 billion just for China in the first quarter, trailing 12-months about $20 billion. So there has been a very impressive performance. I would say that we think that China is going to be very more much – its path and – it's going to be very much more in-line about what you can see in our trailing 12-month expectation, right? And what really happened in the first quarter of 2016. Having said that, we have been very focused on certain things like asset retention, about the products that we're putting ahead. And the thing that is important to keep in mind is that our joint venture has been perceived as a safe harbor in China. And also we have been perceived as a much more conservative asset manager and mutual fund company. So we have been benefit for the kind of noise in China, but certainly, we think that our run rate is going to be very much more in-line about the numbers that you could see in the trailing 12-months, right? And what really happened in the very last quarter in China. Michael Kovac - Goldman Sachs & Co.: Great. Thanks. Daniel Joseph Houston - President, Chief Executive Officer & Director: Is that helpful, Mike? Michael Kovac - Goldman Sachs & Co.: Yes, it is. Daniel Joseph Houston - President, Chief Executive Officer & Director: Okay, thank you for the call.

And we have reached the end of our Q&A. Mr. Houston, your closing comments, please. Daniel Joseph Houston - President, Chief Executive Officer & Director: Thank you. I'd just like to say, thank you, everyone, for joining the call today. Our growth opportunities remain strong and our strategies firmly in place. We'll continue to focus on managing our capital, we'll focus on the DOL implementation, we'll focus on running the businesses for the benefit of our customers and our shareholders, and certainly appreciate your commitment to continue to have confidence in the Principal Financial Group. Or I should say, The Principal. So, again, thank you for joining the call. We'll see you on the road.

Thank you for participating in today's conference call. This call will be available for replay beginning at approximately 1:00 p.m. Eastern Standard Time, until the end of the day, May 6, 2016. The ID number to access the code for the replay is 83129743. The number to dial is 855-859-2056 for U.S. and Canadian callers, or 404-537-3406 for international callers. Thank you. You may now disconnect.