Principal Financial Group · Earnings release

INVESTOR

CONTACT:

MEDIA CONTACT:

Humphrey Lee

Jane Slusark

Principal Financial Group Announces

Full Year and

Fourth Quarter 2024 Results

Raises first quarter 2025 common stock dividend, announces

$1.5 billion share repurchase authorization

(Des Moines, Iowa) – Principal Financial Group®(Nasdaq: PFG) announced results for full year and fourth quarter 2024.

Diluted earnings per common share

Net

income attributable to PFG (in

millions)

Net income attributable to PFG

Net income attributable to PFG

Non-GAAP net income attributable to PFG, excluding exited business1

Non-GAAP net income attributable to PFG, excluding exited business1

Non-GAAP operating earnings1

Non-GAAP operating earnings1

Full Year and Fourth Quarter 2024 Highlights

●

Full-year non-GAAP operating earnings per diluted share, excluding significant

variances2 of $7.65 increased 11%, in line with our long-term guidance of 9-12%

●

4Q24 non-GAAP operating earnings per diluted share, excluding

significant variances2 of $2.10

increased 16% over prior year quarter

●

Returned $1.7 billion of capital to shareholders for full year 2024, including

$1.0 billion of share repurchases and $0.7 billion of common stock dividends

●

Raised first quarter 2025 common stock dividend to $0.75

per share, a 2-cent increase over the fourth quarter 2024 dividend and 9% increase over first quarter 2024 dividend; the dividend will

●

The Board of Directors approved a new authorization for the

repurchase of $1.5 billion of the company’s outstanding common stock. As of December 31, 2024, approximately $0.8 billion remains

under the prior authorization.

●

Assets under management (AUM) of $712 billion, which is included in assets

under administration (AUA) of $1.7 trillion

●

Strong financial position with $1.6 billion of excess and

available capital

●

Statutory risk-based capital (RBC) ratio for Principal Life

Insurance Company of 404%

Deanna Strable, President and CEO of Principal®

“Strong business fundamentals, continued growth, and positive markets generated strong earnings in 2024, and we delivered on our growth and financial targets. Our strategic focus on higher growth markets, combined with our integrated product portfolio and strong distribution relationships, continues to create value and drive growth for customers and shareholders.

We returned $1.7 billion to shareholders in 2024, including $1.0 billion of share repurchases, delivering on our commitment to return excess capital to shareholders, while maintaining our strong capital position.”

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 4Q 2024 and 4Q 2023 significant variances on net income attributable to PFG; non-GAAP

net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

●

2025 outlook consistent with long-term targets:

o

G19-12% annual non-GAAP operating earnings per diluted share (EPS) growth3

o

G275-85% free capital flow conversion4

o

o

G4$1.4-$1.7 billion capital deployment

Fourth Quarter Enterprise Results

In millions except percentages, earnings per share, or

otherwise noted

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Net income (loss) attributable to PFG

N/M

N/M

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

(1)%

Non-GAAP operating earnings

2%

2%

Diluted earnings per common share6

Net income (loss) attributable to PFG

N/M

N/M

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

3%

Non-GAAP operating earnings

6%

6%

Non-GAAP operating earnings, excluding significant variances2

Assets under administration (billions)

5%

Assets under management (billions)

3%

AUM net cash flow (billions)

N/M

N/M

3 Based on 2024 results excluding significant variances.

See Exhibit 1 for details on the impact of 4Q 2024 and 4Q 2023 significant variances on net income attributable to PFG; non-GAAP net

income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

4 Based on non-GAAP net income attributable to PFG, excluding

income or loss from exited business.

5 Non-GAAP return on equity, excluding cumulative change

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

6 When a net loss is reported, our basic weighted-average

shares are used to calculate diluted earnings per share, as dilutive shares would have an antidilutive effect and result in a lower loss

per share.

Full Year Segment Highlights

●

Retirement and Income Solutions (RIS) recurring deposit growth of 7% and transfer

●

Investment Management AUM increased $32 billion to $559 billion

●

Specialty Benefits premium and fees increased 7% over 2023

Fourth Quarter Segment Highlights

●

RIS 4Q24 transfer deposits up 57% to $8.8 billion, including $0.9 billion

of PRT sales

●

Investment Management had a record quarter in retirement

investment sales driven by a $1.0 billion off-platform mandate

●

Life Insurance business market premium and fees increased 17%

Segment Results

In millions except percentages, or otherwise

noted except percentages or otherwise noted)

Retirement and Income Solutions

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings7

6%

0%

Net revenue8

6%

4%

Operating margin9

●

Pre-tax operating earnings increased $15.5 million

primarily due to higher net revenue.

●

Net revenue increased $38.7 million due to growth

in the business, favorable market performance, and higher net investment income.

7 Pre-tax operating earnings = operating earnings before

income taxes and after noncontrolling interest.

8 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.

9 Operating margin for Retirement and Income Solutions =

pre-tax operating earnings divided by net revenue.

Investment Management

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

6%

Operating revenues less pass-through expenses10

9%

4%

Operating margin11

Assets under management (billions)

6%

●

Pre-tax operating earnings increased $34.7 million primarily due to

higher operating revenues less pass-through expenses and higher operating margin.

●

Operating revenues less pass-through expenses increased $37.8 million

primarily due to 11%higher management fees, resulting from higher AUM, partially offset by lower performance fees and other revenue.

International Pension

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

5%

Net revenue

(1)%

Operating margin12

Assets under management (billions)

●

Pre-tax operating earnings decreased $38.0 million primarily due to

lower net revenue.

●

Net revenue decreased $46.7 million primarily due to encaje performance

and foreign currency headwinds.

●

Operating margin decreased primarily due to encaje performance.

10 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.

11 Operating margin for Investment Management = pre-tax operating

earnings adjusted for noncontrolling interest divided by operating revenues less pass-through expenses.

12 Operating margin for International Pension = pre-tax operating

earnings divided by net revenue.

Specialty Benefits

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

3%

Premium and fees

4%

7%

Operating margin13

Incurred loss ratio

●

Pre-tax operating earnings increased $27.9 million

primarily due to more favorable underwriting results in 4Q24 and growth in the business.

●

Premium and fees increased $32.2 million driven by

growth in the business.

●

Incurred loss ratio improved to 56.5% driven by more

favorable underwriting experience primarily in group life and group disability.

Life Insurance

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings (losses)

Premium and fees

(1)%

1%

Operating margin

●

Pre-tax operating earnings decreased $17.6 million

due to higher mortality driven by severity and a GAAP-only regulatory closed block dividend adjustment.

●

Premium and fees decreased $1.2 million as the runoff

of the legacy life business and impact of risk-reducing reinsurance transactions slightly outpaced strong business market growth.

Corporate

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating losses

5%

●

Pre-tax operating losses increased $15.4 million primarily

due to lower variable investment income compared to the year ago quarter.

13 Operating margin for Benefits and Protection = pre-tax

operating earnings divided by premium and fees.

Exhibit 1

Principal Financial Group

Impact of Significant Variances14on 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,

Net income (loss) attributable to PFG

(Income) loss from exited business

-

-

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

Net realized capital (gains) losses, as adjusted

-

-

Non-GAAP operating earnings

Income taxes

Non-GAAP pre-tax operating earnings

Per diluted share:

Net income (loss) attributable to PFG

(Income) loss from exited business

-

-

-

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

Net realized capital (gains) losses, as adjusted

-

-

Non-GAAP operating earnings

Weighted average diluted common shares outstanding

Segment pre-tax operating earnings (losses):

Retirement and Income Solutions

Investment Management

-

-

-

-

International Pension

Principal Asset Management

Specialty Benefits

Life Insurance

Benefits and Protection

Corporate

Total segment pre-tax operating earnings (losses)

Income statement line item details of significant variances are

available in our earnings conference call presentation on our website.

14 Significant variances (SVs)

in 4Q24 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, Life Insurance and

Corporate; 2) impact of lower than expected encaje performance and Latin American inflation in International Pension; 3) impact of GAAP-only

regulatory closed block adjustment in Life Insurance; 4) impact of model refinement in Specialty Benefits. SVs in 4Q23 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 4Q24 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) higher than expected encaje performance and Latin American inflation in International Pension; 4) impact of GAAP-only

regulatory closed block adjustment in Life Insurance; 5) impact of model refinement in Specialty Benefits. SVs on a trailing twelve months

in 4Q23 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.

Earnings Conference Call

and Chief Executive Officer Deanna Strable and Senior Vice President and Interim Chief Financial Officer Joel Pitz 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®15

Principal Financial Group® (Nasdaq: PFG) is a global

financial company with approximately 20,000 employees16 passionate about improving the wealth and well-being of people and

businesses. In business for 145 years, we’re helping approximately 70 million customers16 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 Companies17, a member of the Bloomberg Gender

Equality Index, and a “Best Place to Work in Money Management18.” Learn more about Principal and our commitment

to building a better future at principal.com.

###

Summary of Principal Financial Group®and Segment Results

Principal

Financial Group, Inc. Results

(in millions)

Three Months Ended,

Trailing Twelve Months,

Net income (loss) attributable to PFG

(Income) loss from exited business

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

Net realized capital (gains) losses, as adjusted

Non-GAAP Operating Earnings*

Income taxes

Non-GAAP Pre-Tax Operating Earnings

Segment Pre-Tax Operating Earnings (Losses):

Retirement and Income Solutions

Principal Asset Management

Benefits and Protection

Corporate

Total Segment Pre-Tax Operating Earnings

15 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.

Per Diluted Share

Three Months Ended,

Twelve Months Ended,

Net income (loss) attributable to PFG

(Income) loss from exited business

Non-GAAP net income (loss) excluding exited business

Net realized capital (gains) losses, as adjusted

Impact of dilutive shares19

Non-GAAP Operating Earnings

Impact of significant variances20

Non-GAAP Operating Earnings, excluding significant variances

Weighted-average diluted common shares outstanding (in millions)

*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

Period Ended,

Total assets (in billions)

Stockholders’ equity (in millions)

Total common equity (in millions)

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)

End of period common shares outstanding (in millions)

Book value per common share

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

19 When a net loss is reported, our basic weighted-average

shares are used to calculate diluted earnings per share, as dilutive

shares would have an antidilutive effect and result in a lower loss

per share.

20 See Exhibit 1 for details on the impact of 4Q 2024 and

4Q 2023 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business;

and non-GAAP operating earnings.

Principal Financial Group, Inc.

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

Measures

(in millions, except as indicated)

Period Ended,

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

Noncontrolling interest

Stockholders’ equity available to common stockholders

Cumulative change in fair value of funds withheld embedded derivative

AOCI, other than foreign currency translation adjustment

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

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

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

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

Principal Financial Group, Inc.

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

(in millions)

Three Months Ended,

Trailing Twelve Months,

Income Taxes:

Total GAAP income taxes (benefit)

Net realized capital gains (losses) tax adjustments

Exited business tax adjustments

Income taxes related to equity method investments and noncontrolling interest

Income taxes

Net Realized Capital Gains (Losses):

GAAP net realized capital gains (losses)

Market value adjustments to fee revenues

-

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

Derivative and hedging-related revenue adjustments

Certain variable annuity fees

Sponsored investment funds and other adjustments

Capital gains distributed – operating expenses

Amortization of actuarial balances

-

Derivative and hedging-related expense adjustments

Market value adjustments of embedded derivatives

Market value adjustments of market risk benefits

Capital gains distributed – cost of interest credited

Net realized capital gains (losses) tax adjustments

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

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

Net realized capital gains (losses), as adjusted

Income (Loss) from Exited Business:

Pre-tax impacts of exited business:

Amortization of reinsurance gains (losses)

Other impacts of reinsured business

Net realized capital gains (losses) on funds withheld assets

Change in fair value of funds withheld embedded derivative

Tax impacts of exited business

Total income (loss) from exited business

Principal Financial Group, Inc.

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

Measures

(in millions)

Three Months Ended,

Trailing Twelve Months,

Investment Management Operating Revenues Less Pass-Through Expenses:

Operating revenues

Commissions and other expenses

Operating revenues less pass-through expenses