UNIDENTIFIED PARTICIPANT : That's right.
UNIDENTIFIED PARTICIPANT: Thanks Ryan.
OPERATOR: Your next question comes from the line of Jimmy Butler with J. P. Morgan.
JIMMY BUTLER (ph): I had a couple of questions. First just on the implied -- so, if you look at P. G. I. net
revenue guidance, you're talking about like I think 1 to 5% in 2019 improving to 4 to 7% longer term.
And I think in the comments it was mentioned that part of the weakness is because of the market as
well as just industry headwinds (ph). Um, what gives you the -- what gives you the – (INAUDIBLE) of the
industry headwinds (ph) albeit (ph)? Are you seeing any of that in the market or in the results? And then
similarly, in both the international and the retirement business, you're assuming better revenue growth
longer term than what you're seeing in um, 2019. And I'm just wondering, is 2019 more of a new normal
or is there – are there some concrete things besides the market that are pressuring you in either of
those businesses in ‘19?
UNIDENTIFIED PARTICIPANT: All good questions and right at the heart of the reason for having a call like
this for today, which is provide you with an outlook on that, on the -- on the business and the underlying
fundamental. So maybe I'll just ask Tim (ph) to respond to PGI and then go right to Nora.
UNIDENTIFIED PARTICIPANT: So for the net cash flows, we do expect that from an industry perspective,
cash flows will continue to be a bit anemic over the next few years. So certainly that's having an impact
on our Revenue growth rate for 2019. And as you can see, we brought down the long term guidance by
about a percentage, some of the other impacts that are happening in the marketplace today, which
would be concerned over global growth. As we see uneven tapering start to occur, rising interest rates,
currency volatility. Those are market conditions that we would see abating over some period of time.
Um As you know, we have a -- we have a really good multi boutique model. We have great capabilities
within those boutiques and good investment performance. So we are still seeing good demand for a lot
of our strategies that we have today. And then I'd say we have a very strong pipeline of new capabilities
that we've been seating and developing including our European real estate group, emerging market
debt and equities and our asset allocations solutions. So we think we have a lot of opportunities as we
go forward to expand those products not only within the U. S. But around the world as we work more
closely with P. I. and Aria.
UNIDENTIFIED PARTICIPANT: Nora, you want to take shots at RSNP (ph)?
NORA (ph): Sure. Well, certainly we don't believe that the 2019 outlook with regard to net revenue
growth is a new normal. We've got confidence around that long term 1-5%. And there's a number of
things and we talked about it already, but it's probably worth highlighting again. When you strike on
November 28, assumptions around the equity market, you're looking at year over year. Really knew that
year over year growth again, based on those assumptions less than 3%. That has a significant impact
than on the outputs around those assumptions, one. Two is that 2% drag you really do need to
recognize that drag on the top line, even though it doesn't filter through to the bottom line because it
does impact -- meaningfully impact that growth number coming from 2018 and 2019. And three, as I
talked about earlier, we are making the right investments around digital around the customer
experience and those investments give us confidence that long term. We will continue to be a top player
in the -- in this full service retirement space and continue to benefit the balance of the principal family.
UNIDENTIFIED PARTICIPANT: I'd say Jimmy (ph) as it relates to Principal International, I'm frankly very
enthusiastic. Brazil has a new president. I think pension policy and economic growth will continue to
lead back on track as it was at one time. Chile is in a very similar matter in terms of pension reform, we
have a front row seat to that. Those discussions feel good about it. But broadly I would say these
emerging markets, which we enjoyed all those tail winds for so long and the headwinds (ph) the last few
years. But the reality is their currencies will strengthen over time. We've already seen some, some signs
of that. GDP growth looks good. Uh there