Informal Business Valuation and Business Planning Report NEW and IMPROVED! For financial professional use only. Not for distribution to the public.

Complimentary informal business valuation (IBV) and buy-sell review services are core to our business, owner and executive solutions (BOES) platform. Great success Experience-driven improvement Transition from vendor software to proprietary valuation tool Core to BOES Platform Business Planning Services For financial professional use only. Not for distribution to the public.

Complimentary value-add service Providing comprehensive consultative support The intent An incentive for business owners to do comprehensive business planning Does not provide a certified valuation The process Complete the RFP, providing three most recent years’ business financials Submit to Advanced Solutions Receive valuation report and Enhanced IBV – What’s the Same? Executive Summary For financial professional use only. Not for distribution to the public.

Comprehensive proposal that tells a story Helps clients take action vs. just providing a value Updated valuation methodologies/names Additional graphics Easy identification of appropriate value Inclusion of exit planning solutions Enhanced IBV – What’s New? Executive Summary For financial professional use only. Not for distribution to the public.

Buy-sell agreement funding content – identifying values for both life and disability income (DI) insurance Inclusion of applicable solution pages Integration of applicable individual & business DI solutions Inclusion of Business Market Administration (BMA) Integration of planning considerations and next steps Enhanced IBV – What’s New? Executive Summary For financial professional use only. Not for distribution to the public.

Report Content Enhancements Content drives clients to take action 1.Importance of business valuation 2.Protecting business exit with a funded buy-sell agreement 3.Protecting business from the loss of a key employee 4.Planning for business owner retirement 5.Disability protection 6.Administrative services 7.Customized next steps 8.Why work with The Principal? For financial professional use only. Not for distribution to the public.

Asset Approach Adjusted book value Income Approach Capitalization of earnings method (consulting) Excess of earnings method (manufacturing/assets) Discounted cash flow method (mergers/acquisitions) Multiple of discretionary earnings method (service firms/goodwill) Market Approach Based on prices of similar or comparable businesses that have recently sold; challenging for small businesses and professional firms; not used in report Valuation Methods Enhancements Different names, similar profiles For financial professional use only. Not for distribution to the public.

Sample Report Enhancements Company Profile Outlines information received from the client Provides snapshot of three years’ financials and graphically represents their financial statement summary Informal Business Valuation Similar to graph page from prior valuation tool Highlights the appropriate value NEW! No “average value” For financial professional use only. Not for distribution to the public.

Sample Report Enhancements Calculations Provides assumptions and calculations for each method Protect Your Business NEW! Opportunity to discuss buy-sell agreement needs and estimated values Customized illustrations based on information collected in updated RFP (will not be included if necessary information is not received) For financial professional use only. Not for distribution to the public.

Sample Report Enhancements Solutions Advanced Solutions will choose from a variety of solutions options and insert those most applicable Arrow at bottom right of section overview page indicates if solution pages follow Buy-Sell Funding NEW! General information on the various funding methods Hypothetical example compares methods Full page addresses client’s specific funding needs –Highlights amounts for both life and disability income insurance For financial professional use only. Not for distribution to the public.

Sample Report Enhancements Administrative Services NEW! Promotes BMA services Planning Considerations Planning opportunities are specific to your client Provides a summary review of proposed solutions Allows client to rank priority and set target dates Identifies next steps –Consult with tax/legal advisors –Apply for appropriate insurance from The Principal ® For financial professional use only. Not for distribution to the public.

What’s New? If not fully completed, will be returned (no exceptions) Requesting additional information to provide more value RFP Must meet parameters of a good prospect Must meet business requirements Business Types The Process Request Timing Informal Business Valuation Report: 5-7 business days Buy-Sell Review: business days Provide product illustrations NSD Follow-up For financial professional use only. Not for distribution to the public.

Buy-Sell Reviews Business Planning Services Updates to Buy-Sell Review Summary Report Updates on timing Reorganized, based on best practices Buy-sell review database fueling thought capital –Business Owner Retirement Infographic and White Paper –Funding Buy-Sell Agreements Infographic For financial professional use only. Not for distribution to the public.

Provides more than just a number and helps clients take action Outlines needs/identifies sales opportunities Helps clients rank/prioritize planning and set target dates Offers funding levels approved for life and disability protection amounts Offers concrete next steps and opportunities for follow-up Makes products from The Principal a more prominent part of the process Enhanced IBV Report Benefits Summary

Insurance products issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co., Des Moines, IA Securities offered through Princor Financial Services Corp., , member SIPC and/or independent broker/dealers. Principal National, Principal Life, and Princor ® are members of the Principal Financial Group ®, Des Moines, IA BB11517 | 12/2014 | t dw For financial professional use only. Not for distribution to the public.