Principal Financial Group · Earnings release

INVESTOR CONTACT:

MEDIA CONTACT:

Humphrey Lee

Jane Slusark

Principal Financial Group Announces Third

Raises fourth quarter 2024 common stock

dividend

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

Third

·

Net loss attributable to Principal Financial Group (PFG) of $220 million, or $0.95 per diluted share, driven by the loss from exited business

·

Non-GAAP net income attributable to PFG, excluding exited business, of $419 million, or $1.78 per diluted share

·

Non-GAAP operating earnings1 of $412 million, or $1.76 per diluted share; excluding impacts of the 3Q24 significant variances2, non-GAAP operating earnings of $480 million, or $2.05 per diluted share

·

Returned $416 million of capital to shareholders, including $251 million of share repurchases and $165 million of common stock dividends

·

Raised fourth quarter 2024 common stock dividend to $0.73 per share, a 1 cent increase over the third quarter 2024 dividend; the dividend will be payable on December 18, 2024, to shareholders of record as of December 2, 2024

·

Assets under management (AUM) of $741 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

Dan Houston, chairman and CEO of Principal®

“Strong business fundamentals, continued growth, and positive markets generated strong earnings in the third quarter, and we continue to be confident in our full-year target. 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 $416 million to shareholders in the quarter, including $251 million of share repurchases, delivering on our commitment to return excess capital to shareholders, while maintaining our strong capital position.”

1Use 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.

2The total company impacts of significant variances, including the actuarial assumption review, is after tax. See Exhibit 1 for

details on the 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.

Third

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

Non-GAAP operating earnings

(2)%

5%

Non-GAAP operating earnings, excluding impacts of significant variances2

7%

5%

Diluted earnings per common share

Net income (loss) attributable to PFG

N/M

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

Non-GAAP operating earnings

2%

Non-GAAP operating earnings, excluding impacts of significant variances2

Assets under administration (billions)

Assets under management (billions)

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

3Operating margin for RIS = pre-tax operating earnings divided by net revenue.

Segment

Results

In

millions except percentages, or otherwise noted

Retirement

and Income Solutions

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings4

5%

Net revenue5

(4)%

6%

Operating margin

*Operating

margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating

·

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

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

(2)%

(2)%

Operating revenues less pass-through expenses6

1%

2%

Operating margin7

Total PGI assets under management (billions)

PGI sourced assets under management (billions)

·

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.

4Pre-tax operating earnings = operating earnings before income taxes and after noncontrolling interest.

5Net 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.

6The 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 PGI 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.

7Operating margin for PGI = pre-tax operating earnings, adjusted for noncontrolling interest divided by operating revenues less

pass-through expenses.

Principal

International

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

Combined net revenue (at PFG share)8

6%

Operating margin9

Assets under management (billions)

*Operating

margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating

●

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

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

(2)%

Premium and fees

6%

8%

Operating margin10

Incurred loss ratio

*Operating

margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating

·

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.

8Combined net revenue (a non-GAAP financial measure): net revenue for all PI companies at 100% less pass-through commissions. The

company has determined combined net revenue (at PFG share) is more representative of underlying net revenue growth for PI as it reflects

our proportionate share of consolidated and equity method subsidiaries. In addition, using this net revenue metric provides a more meaningful

representation of our operating margin.

9Operating margin for PI = pre-tax operating earnings divided by combined net revenue (at PFG share).

10Operating margin for Benefits and Protection = pre-tax operating earnings divided by premium and fees.

Life Insurance

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings (losses)

N/M

Premium and fees

0%

2%

Operating margin

*Operating

margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating

·

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

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating losses

9%

·

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

Impacts of 3Q 2024 Significant Variances

Impacts of 3Q 2023 Significant Variances

Actuarial

assumption

review

Other

significant

significant

variances

Actuarial

assumption

review

Other

significant

significant

variances

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

Principal Global Investors

-

-

-

-

-

-

Principal International

-

Principal Asset Management

-

Specialty Benefits

-

Life Insurance

Benefits and Protection

Corporate

-

-

Total segment pre-tax operating earnings (losses)

Income

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

our website.

11Other significant variances in 3Q24 include 1) lower than expected variable investment income in RIS, Principal International,

Specialty Benefits and Life Insurance, partially offset by higher than expected variable investment income in Corporate; 2) impact of

higher than expected encaje performance and Latin American inflation in Principal International; 3) impact of GAAP-only regulatory closed

block adjustment in Life Insurance

12Other significant variances in 3Q23 include 1) lower than expected variable investment income in RIS, Life Insurance and Corporate;

2) impact of lower than expected encaje performance, Latin American inflation and other items in Principal International.

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.comat 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

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

$

$

$

$

Per Diluted Share

Three Months Ended,

Nine 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 shares17

Non-GAAP Operating Earnings

$

$

$

$

Weighted-average diluted common shares outstanding (in millions)

13Principal, 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.

17When 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.

*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

$

$

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:

Strategic review costs and impacts

$

-

$

-

$

-

$

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,

Principal Global Investors Operating Revenues Less Pass-Through Expenses:

Operating revenues

$

$

$

$

Commissions and other expenses

Operating revenues less pass-through expenses

$

$

$

$

Principal International Combined Net Revenue (at PFG Share):

Pre-tax operating earnings

$

$

$

$

Combined operating expenses other than pass-through commissions (at PFG share)

Combined net revenue (at PFG share)

$

$

$

$