Yahoo Finance

Segment Results

In millions except percentages, or otherwise noted except percentages or otherwise noted)

Retirement and Income Solutions

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating earnings³

$283.7

$262.2

8%

$1,077.7

$1,063.8

1%

Net revenue⁴

$724.2

$691.4

5%

$2,833.7

$2,731.6

4%

Operating margin⁵

39.2%

37.9%

38.0%

38.9%

Investment Management

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating earnings

$116.3

$122.2

(5)%

$572.9

$548.6

4%

Operating revenues less pass-through expenses⁶

$416.0

$398.6

4%

$1,686.0

$1,611.7

5%

Operating margin⁷

29.0%

31.0%

34.9%

34.3%

Assets under management (billions)

$555.8

$541.2

3%

International Pension

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating earnings

$71.2

$64.9

10%

$288.7

$268.4

8%

Net revenue

$146.7

$149.3

(2)%

$620.3

$628.0

(1)%

Operating margin⁸

48.5%

43.5%

46.5%

42.7%

Assets under management (billions)

$133.5

$139.1

(4)%

Specialty Benefits

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating earnings

$106.2

$102.0

4%

$463.8

$467.2

(1)%

Premium and fees

$831.5

$801.3

4%

$3,287.4

$3,114.2

6%

Operating margin⁹

12.8%

12.7%

14.1%

15.0%

Incurred loss ratio

60.7%

61.1%

60.4%

60.1%

Life Insurance

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating earnings (losses)

$13.3

$9.8

36%

$7.1

$82.9

(91)%

Premium and fees

$235.1

$234.0

0%

$928.6

$931.4

0%

Operating margin

5.7%

4.2%

0.8%

8.9%

Corporate

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating losses

$(105.6)

$(88.9)

(19)%

$(392.3)

$(389.6)

(1)%

Exhibit 1

Principal Financial Group

Impact of Significant Variances¹⁰ on Net Income Attributable to PFG; Non-GAAP Net Income Attributable to PFG, Excluding Exited Business; and Non-GAAP Operating Earnings

In millions except per share data

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

1Q25

1Q24

Net income (loss) attributable to PFG

$

(24.7

)

$

(25.1

)

$

(175.3

)

$

(90.0

)

(Income) loss from exited business

-

-

20.6

(0.1

)

Non-GAAP net income (loss) attributable to PFG, excluding exited business

(24.7

)

(25.1

)

(154.7

)

(90.1

)

Net realized capital (gains) losses, as adjusted

-

-

(3.7

)

4.2

Non-GAAP operating earnings

(24.7

)

(25.1

)

(158.4

)

(85.9

)

Income taxes

(5.6

)

(8.8

)

(36.2

)

43.4

Non-GAAP pre-tax operating earnings

$

(30.3

)

$

(33.9

)

$

(194.6

)

$

(42.5

)

Per diluted share:

Net income (loss) attributable to PFG

$

(0.11

)

$

(0.10

)

(Income) loss from exited business

-

-

Non-GAAP net income (loss) attributable to PFG, excluding exited business

(0.11

)

(0.10

)

Net realized capital (gains) losses, as adjusted

-

-

Non-GAAP operating earnings

$

(0.11

)

$

(0.10

)

Weighted average diluted common shares outstanding

228.8

239.4

Segment pre-tax operating earnings (losses):

Retirement and Income Solutions

$

(21.0

)

$

(20.0

)

$

(96.2

)

$

(13.6

)

Investment Management

-

-

-

-

International Pension

-

(2.9

)

11.1

(10.3

)

Principal Asset Management

-

(2.9

)

11.1

(10.3

)

Specialty Benefits

(5.0

)

(4.0

)

(17.9

)

5.7

Life Insurance

(0.6

)

(14.0

)

(92.9

)

(33.5

)

Benefits and Protection

(5.6

)

(18.0

)

(110.8

)

(27.8

)

Corporate

(3.7

)

7.0

1.3

9.2

Total segment pre-tax operating earnings (losses)

$

(30.3

)

$

(33.9

)

$

(194.6

)

$

(42.5

)

Summary of Principal Financial Group^® and Segment Results

Principal Financial Group, Inc. Results

(in millions)

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

1Q25

1Q24

Net income (loss) attributable to PFG

$

48.1

$

532.5

$

1,086.6

$

1,295.8

(Income) loss from exited business

251.3

(156.1

)

341.6

248.6

Non-GAAP net income (loss) attributable to PFG excluding exited business

$

299.4

$

376.4

$

1,428.2

$

1,544.4

Net realized capital (gains) losses, as adjusted

115.1

17.9

232.5

85.9

Non-GAAP Operating Earnings*

$

414.5

$

394.3

$

1,660.7

$

1,630.3

Income taxes

70.6

77.9

357.2

411.0

Non-GAAP Pre-Tax Operating Earnings

$

485.1

$

472.2

$

2,017.9

$

2,041.3

Segment Pre-Tax Operating Earnings (Losses):

Retirement and Income Solutions

$

283.7

$

262.2

$

1,077.7

$

1,063.8

Principal Asset Management

187.5

187.1

861.6

817.0

Benefits and Protection

119.5

111.8

470.9

550.1

Corporate

(105.6

)

(88.9

)

(392.3

)

(389.6

)

Total Segment Pre-Tax Operating Earnings

$

485.1

$

472.2

$

2,017.9

$

2,041.3

Per Diluted Share

Three Months Ended,

1Q25

1Q24

Net income (loss) attributable to PFG

$

0.21

$

2.22

(Income) loss from exited business

1.10

(0.64

)

Non-GAAP net income (loss) excluding exited business

$

1.31

$

1.58

Net realized capital (gains) losses, as adjusted

0.50

0.07

Non-GAAP Operating Earnings

$

1.81

$

1.65

Impact of significant variances¹⁵

0.11

0.10

Non-GAAP Operating Earnings, excluding significant variances

$

1.92

$

1.75

Weighted-average diluted common shares outstanding (in millions)

228.8

239.4

Selected Balance Sheet Statistics

Period Ended,

1Q25

4Q24

Total assets (in billions)

$

313.0

$

313.7

Stockholders’ equity (in millions)

$

11,268.3

$

11,131.3

Total common equity (in millions)

$

11,216.8

$

11,086.4

Total common equity excluding cumulative change in fair value of funds withheld embedded derivative and accumulated other comprehensive income (AOCI) other than foreign currency translation adjustment (in millions)

$

12,081.4

$

12,144.0

End of period common shares outstanding (in millions)

225.0

226.2

Book value per common share

$

49.85

$

49.01

Book value per common share excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment

$

53.70

$

53.69

Principal Financial Group, Inc.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in millions, except as indicated)

Period Ended,

1Q25

4Q24

Stockholders’ Equity, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment, Available to Common Stockholders:

Stockholders’ equity

$

11,268.3

$

11,131.3

Noncontrolling interest

(51.5

)

(44.9

)

Stockholders’ equity available to common stockholders

11,216.8

11,086.4

Cumulative change in fair value of funds withheld embedded derivative

(2,215.6

)

(2,381.3

)

AOCI, other than foreign currency translation adjustment

3,080.2

3,438.9

Stockholders’ equity, excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment, available to common stockholders

$

12,081.4

$

12,144.0

Book Value Per Common Share, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment:

Book value per common share

$

49.85

$

49.01

Cumulative change in fair value of funds withheld embedded derivative and AOCI, other than foreign currency translation adjustment

3.85

4.68

Book value per common share, excluding change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment

$

53.70

$

53.69

Principal Financial Group, Inc.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in millions)

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

1Q25

1Q24

Income Taxes:

Total GAAP income taxes (benefit)

$

(34.0

)

$

95.1

$

162.6

$

241.8

Net realized capital gains (losses) tax adjustments

25.2

11.1

30.2

24.9

Exited business tax adjustments

63.0

(41.5

)

86.9

75.3

Income taxes related to equity method investments and noncontrolling interest

16.4

13.2

77.5

69.0

Income taxes

$

70.6

$

77.9

$

357.2

$

411.0

Net Realized Capital Gains (Losses):

GAAP net realized capital gains (losses)

$

(117.1

)

$

(0.9

)

$

(143.5

)

$

(7.1

)

Market value adjustments to fee revenues

(0.1

)

-

-

1.3

Net realized capital gains (losses) related to equity method investments

4.6

(10.3

)

(2.4

)

(1.7

)

Derivative and hedging-related revenue adjustments

(13.2

)

18.1

14.7

39.3

Certain variable annuity fees

17.0

18.2

70.1

73.1

Sponsored investment funds and other adjustments

7.1

5.9

31.1

23.2

Capital gains distributed – operating expenses

33.4

(35.6

)

(41.5

)

(77.7

)

Amortization of actuarial balances

(1.9

)

(0.2

)

(3.5

)

(0.4

)

Derivative and hedging-related expense adjustments

0.5

(1.3

)

(1.7

)

0.5

Market value adjustments of embedded derivatives

(22.0

)

(4.1

)

(42.6

)

(5.4

)

Market value adjustments of market risk benefits

(43.9

)

3.3

(91.1

)

(61.5

)

Capital gains distributed – cost of interest credited

6.1

(24.7

)

(29.8

)

(79.5

)

Net realized capital gains (losses) tax adjustments

25.2

11.1

30.2

24.9

Net realized capital gains (losses) attributable to noncontrolling interest, after-tax

(10.8

)

2.6

(22.5

)

(14.9

)

Total net realized capital gains (losses) after-tax adjustments

2.0

(17.0

)

(89.0

)

(78.8

)

Net realized capital gains (losses), as adjusted

$

(115.1

)

$

(17.9

)

$

(232.5

)

$

(85.9

)

Income (Loss) from Exited Business:

Pre-tax impacts of exited business:

Amortization of reinsurance gains (losses)

$

(26.4

)

$

(10.1

)

$

(605.9

)

$

(56.7

)

Other impacts of exited business

(106.2

)

(36.8

)

68.5

(136.6

)

Net realized capital gains (losses) on funds withheld assets

28.0

47.5

68.2

131.5

Change in fair value of funds withheld embedded derivative

(209.7

)

197.0

40.7

(262.1

)

Tax impacts of exited business

63.0

(41.5

)

86.9

75.3

Total income (loss) from exited business

$

(251.3

)

$

156.1

$

(341.6

)

$

(248.6

)

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

1Q25

1Q24

Investment Management Operating Revenues Less Pass-Through Expenses:

Operating revenues

$

453.7

$

435.5

$

1,838.9

$

1,756.0

Commissions and other expenses

(37.7

)

(36.9

)

(152.9

)

(144.3

)

Operating revenues less pass-through expenses

$

416.0

$

398.6

$

1,686.0

$

1,611.7

¹ Use of non-GAAP financial measures and their reconciliations to the most directly comparable GAAP measures are included in this release. Non-GAAP operating earnings for total company is after tax.

² The total company impacts of significant variances, is after tax. See Exhibit 1 for details on the impact of 1Q 2025 and 1Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

³ Pre-tax operating earnings = operating earnings before income taxes and after noncontrolling interest.

⁴ Net revenue = operating revenues less: benefits, claims and settlement expenses, liability for future policy benefits remeasurement (gain) loss, market risk benefit remeasurement (gain) loss, and dividends to policyholders.

⁵ Operating margin for Retirement and Income Solutions = pre-tax operating earnings divided by net revenue.

⁶ The company has provided reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measures at the end of the release. The company has determined this measure is more representative of underlying operating revenues growth for Investment Management as it removes commissions and other expenses that are collected through fee revenue and passed through expenses with no impact to pre-tax operating earnings.

⁷ Operating margin for Investment Management = pre-tax operating earnings adjusted for noncontrolling interest divided by operating revenues less pass-through expenses.

⁸ Operating margin for International Pension = pre-tax operating earnings divided by net revenue.

⁹ Operating margin for Benefits and Protection = pre-tax operating earnings divided by premium and fees.

¹⁰ Significant variances (SVs) in 1Q25 include 1) lower than expected variable investment income in RIS, Specialty Benefits, Life Insurance and Corporate; 2) impact of GAAP-only regulatory closed block adjustment in Life Insurance. SVs in 1Q24 include 1) impact of higher than expected encaje performance in International Pension; 2) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable investment income in Corporate. SVs on a trailing twelve months in 1Q25 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable investment income in Corporate; 2) impacts of 2024 actuarial assumption review; 3) impact of model refinement in Specialty Benefits; 4) lower than expected encaje performance and Latin American inflation in International Pension; 5) impact of GAAP-only regulatory closed block adjustment in Life Insurance. SVs on a trailing twelve months in 1Q24 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, Life Insurance partially offset by higher than expected variable investment income in Corporate; 2) impacts of 2023 actuarial assumption review; 3) higher than expected encaje performance, Latin American inflation, Latin American non-economic LDTI discount rate impacts, and other items in International Pension; 4) mortality experience true-ups in RIS; 5) impact of LDTI model refinement in Specialty Benefits; 6) impact of GAAP-only regulatory closed block adjustment in Life Insurance.

¹¹ Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

¹² As of March 31, 2025

¹³ Ethisphere, 2025

¹⁴ Pensions & Investments, 2023

¹⁵ See Exhibit 1 for details on the impact of 1Q 2025 and 1Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.