Third Quarter Enterprise Results
In millions except percentages, earnings per share, or otherwise noted

Third Quarter Segment Highlights

• Retirement and Income Solutions (RIS) 40% operating margin³, excluding the significant variances outlined in Exhibit 1, and recurring deposit growth of 10%
• Principal Global Investors (PGI) managed AUM of $541 billion increased $28 billion over second quarter 2024 and $72 billion over third quarter 2023
• Principal International record pre-tax operating earnings of $121 million, record AUM of $185 billion, and strong net cash flow of $2.3 billion, including $2.1 billion from investment management
• Specialty Benefits premium and fees increased 6% from third quarter 2023
• Life Insurance business market premium and fees increased 12% from third quarter 2023

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

Retirement and Income Solutions

_{*Operating margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating margin was 39.7% for third quarter 2024 and 38.3% for third quarter 2023.}

• Pre-tax operating earnings decreased $58.6 million. Excluding the significant variances outlined in Exhibit 1, pre-tax operating earnings increased $32.0 million primarily due to higher net revenue and operating margin.
• Net revenue decreased $30.4 million. Excluding the significant variances outlined in Exhibit 1, net revenue increased $60.2 million, or 9%, due to growth in the business, favorable market performance and higher net investment income.

Principal Global Investors

• Pre-tax operating earnings decreased $3.7 million primarily driven by muted growth in operating revenues less pass-through expenses due to strong performance fees in the prior year quarter.
• Operating revenues less pass-through expenses increased $4.9 million primarily due to 6% growth in management fees, resulting from higher AUM, partially offset by lower performance fees and other revenue.

Principal International

_{*Operating margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating margin was 32.1% for third quarter 2024 and 31.6% for third quarter 2023.}

• Pre-tax operating earnings increased $50.0 million. Excluding the significant variances outlined in Exhibit 1, pre-tax operating earnings increased $5.9 million primarily due to improved operating margin.
• Combined net revenue (at PFG share) increased $42.1 million. Excluding the significant variances outlined in Exhibit 1, combined net revenue was stable as growth in the businesses was offset by foreign currency headwinds in Latin America.

Specialty Benefits

_{*Operating margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating margin was 14.1% for third quarter 2024 and 14.8% for third quarter 2023.}

• Pre-tax operating earnings decreased $46.1 million. Excluding the significant variances outlined in Exhibit 1, pre-tax operating earnings decreased $16.3 million primarily due to favorable underwriting results in 3Q23, partially offset by growth in the business.

• Premium and fees increased $47.5 million driven by growth in the business.
• Incurred loss ratio was 62.7%. Excluding the significant variances outlined in Exhibit 1, the incurred loss ratio of 61.5% increased due to unusually favorable LTD results in 3Q23 along with a higher group dental and group life loss ratio.

Life Insurance

_{*Operating margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating margin was 12.5% for third quarter 2024 and 13.6% for third quarter 2023.}

• Pre-tax operating earnings decreased $58.5 million. Excluding the significant variances outlined in Exhibit 1, pre-tax operating earnings increased $3.4 million driven by improved mortality experience.
• Premium and fees decreased $0.7 million. Excluding the significant variances outlined in Exhibit 1, premium and fees increased $1.0 million as strong business market growth outpaced the runoff of the legacy life business.

Corporate

• Pre-tax operating losses decreased $35.4 million. Excluding the significant variances outlined in Exhibit 1, pre-tax operating losses decreased $17.4 million due to lower operating expenses.

Exhibit 1
Principal Financial Group
Impact of 3Q 2024 and 3Q 2023 Significant Variances on Quarterly 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

Income statement line item details of the 3Q24 and 3Q23 significant variances are available in our earnings conference call presentation on our website.

Earnings Conference Call

On Friday, Oct. 25, 2024, at 10:00 a.m. (ET), Chairman and Chief Executive Officer Dan Houston and President and Chief Operating Officer Deanna Strable will lead a discussion of results and the impacts on future prospects, asset quality and capital adequacy during a live conference call, which can be accessed as follows:

• Via live Internet webcast. Please go to investors.principal.com at least 10-15 minutes prior to the start of the call to register, and to download and install any necessary audio software.
• Analysts who will be asking questions will be sent a dial in number and authorization code in advance of the call.
• Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at investors.principal.com.

The company’s financial supplement and slide presentation is currently available at investors.principal.com, and may be referred to during the call.

Forward Looking Statements

This release contains statements that constitute forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to share repurchases and planned dividends, the realization of our growth and business strategies and results from ongoing operations. Forward‑looking statements are made based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward‑looking statements are not guarantees of future performance and actual results may differ materially from the results anticipated in the forward-looking statements. We describe risks, uncertainties and factors that could cause or contribute to such material differences in our filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Note Concerning Forward-Looking Statements” sections in our annual report on Form 10-K for the year ended Dec. 31, 2023, as updated or supplemented from time to time in subsequent filings. We assume no obligation to update any forward-looking statement for any reason, which speaks as of its date.

Use of Non-GAAP Financial Measures

The company uses a number of non-GAAP financial measures that management believes are useful to investors because they illustrate the performance of normal, ongoing operations, which is important in understanding and evaluating the company’s financial condition and results of operations. They are not, however, a substitute for U.S. GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure at the end of the release. The company adjusts U.S. GAAP measures for items not directly related to ongoing operations. However, it is possible these adjusting items have occurred in the past and could recur in future reporting periods. Management also uses non-GAAP measures for goal setting, as a basis for determining employee and senior management awards and compensation and evaluating performance on a basis comparable to that used by investors and securities analysts.

About Principal^®13

Principal Financial Group^® (Nasdaq: PFG) is a global financial company with nearly 19,000 employees¹⁴ passionate about improving the wealth and well-being of people and businesses. In business for 145 years, we’re helping approximately 68 million customers¹⁴ plan, insure, invest, and retire, while working to support the communities where we do business, and build a diverse, inclusive workforce. Principal^® is proud to be recognized as one of the 2024 World’s Most Ethical Companies¹⁵, a member of the Bloomberg Gender Equality Index, and a “Best Place to Work in Money Management¹⁶.” Learn more about Principal and our commitment to building a better future at principal.com.

Summary of Principal Financial Group^® and Segment Results

*U.S. GAAP (GAAP) net income attributable to PFG versus non-GAAP operating earnings

Management uses non-GAAP operating earnings, which is a financial measure that excludes the effect of net realized capital gains and losses, as adjusted, income (loss) from exited business and other after-tax adjustments the company believes are not indicative of overall operating trends, for goal setting, as a basis for determining employee and senior management awards and compensation and evaluating performance on a basis comparable to that used by investors and securities analysts. Note: it is possible these adjusting items have occurred in the past and could recur in future reporting periods. While these items may be significant components in understanding and assessing our consolidated financial performance, management believes the presentation of non-GAAP operating earnings enhances the understanding of results of operations by highlighting earnings attributable to the normal, ongoing operations of the company’s businesses.

Selected Balance Sheet Statistics