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Principal Financial Group (NYSE:PFG)
Cash Flow from Operations
$3,021 Mil (TTM As of Sep. 2014)

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

For the three months ended in Sep. 2014, Principal Financial Group's Net Income From Continuing Operations was $253 Mil. Its DDA was $41 Mil. Its Change In Working Capital was $407 Mil. Its cash flow from deferred tax was $90 Mil. Its Cash Flow from Discontinued Operations was $0 Mil. Its Stock Based Compensation was $19 Mil. And its Cash Flow from Others was $10 Mil. In all, Principal Financial Group's Cash Flow from Operations for the three months ended in Sep. 2014 was $820 Mil.


Definition

Cash flow from operations refers to the cash brought in through a company’'s normal business operations. It is the cash flow before any investment or financing activities. It is the cash version of net income.

Principal Financial Group's Cash Flow from Operations for the fiscal year that ended in Dec. 2013 is calculated as:

Principal Financial Group's Cash Flow from Operations for the quarter that ended in Sep. 2014 is

Principal Financial Group Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2014 was 823.3 (Dec. 2013 ) + 591.3 (Mar. 2014 ) + 786 (Jun. 2014 ) + 820.3 (Sep. 2014 ) = $3,021 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

Cash flow from operations contains six items:

1. Net Income From Continuing Operations:
Net Income From Continuing Operations indicates the net income that a firm brings in from ongoing business activities. These activities are expected to continue into the next reporting period. It excludes extraordinary items, income from the cumulative effects of accounting changes, non-recurring items, income from tax loss carry forward, and preferred dividends.

Principal Financial Group's net income from continuing operations for the three months ended in Sep. 2014 was $253 Mil.

2. Depreciation, Depletion and Amortization:
Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.
Depletion and amortization are synonyms for depreciation.
Generally:
• The term “depreciation” is used when discussing man made tangible assets
• The term “depletion” is used when discussing natural tangible assets
• The term “amortization” is used when discussing intangible assets

Principal Financial Group's depreciation, depletion and amortization for the three months ended in Sep. 2014 was $41 Mil.

3. Change In Working Capital:
Working Capital is a measure of a company's short term liquidity or its ability to cover short term liabilities. It is defined as the difference between a company's current assets and current liabilities. Changes in Working Capital is reported in the cash flow statement since it is one of the major ways in which net income can differ from operating cash flow.

Principal Financial Group's change in working capital for the three months ended in Sep. 2014 was $407 Mil. It means Principal Financial Group's working capital increased by $407 Mil from Jun. 2014 to Sep. 2014 .

4. Deferred Tax:
It is the cash flow generated from deferred tax.

Principal Financial Group's cash flow from deferred tax for the three months ended in Sep. 2014 was $90 Mil.

5. Cash Flow from Discontinued Operations:
Cash received by a company that comes from the sale of part of business.

Principal Financial Group's cash flow from discontinued operations for the three months ended in Sep. 2014 was $0 Mil.

6. Stock Based Compensation:
It is a way corporations use stock options to reward employees. It provides executives and employees the opportunity to share in the growth of the company and, if structured properly, can align their interests with the interests of the company's shareholders and investors, without burning the company's cash on hand.

Principal Financial Group's stock based compensation for the three months ended in Sep. 2014 was $19 Mil.

7. Cash Flow from Others:
These are cash differences caused by the change of inventory, accounts payable, accounts receivable etc. For instance, if a company pays its suppliers slower, its cash position will build up faster. If a company receives payments from its customers slower, its account receivables will rise, and its cash position will grow more slowly (or even shrink).

Principal Financial Group's cash flow from others for the three months ended in Sep. 2014 was $10 Mil.


Related Terms

Net Income From Continuing Operations, Depreciation, Depletion and Amortization, Change In Working Capital, Cash Flow from Discontinued Operations, Stock Based Compensation, Cash Flow from Others, Cash Flow from Investing


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Principal Financial Group Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
NetIncomeFromContinuingOperations 9191,0358644666466816898259360
CF_DDA 3481011301451391651161321540
ChangeInWorkingCapital 07661,8101,3508531,0868832,4921,4590
CF_DeferredTax -453170-70-220664120182120
Cash Flow from Disc. Op. 0-210000000
Stock Based Compensation 072733237484364690
Cash Flow from Others 1,570133152452503771962-451-6080
Cash Flow from Operations 2,3842,2762,9602,2252,2432,7922,7133,0812,2210

Principal Financial Group Quarterly Data

Dec12Mar13Jun13Sep13Nov13Dec13Mar14Jun14Sep14Dec14
NetIncomeFromContinuingOperations 22719023725902503243192530
CF_DDA 333540390394141410
ChangeInWorkingCapital 7112038951305373914384070
CF_DeferredTax 48137-03903614100900
Cash Flow from Disc. Op. 0000000000
Stock Based Compensation 141917160172218190
Cash Flow from Others -326196-495-2520-57-200-130100
Cash Flow from Operations 70759618861408235917868200
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