FULLTEXT DEL 7 AV 8
10-K – 2026-02-18 – pfg-20251231x10k.htm
U.S. federal statutory tax rate 21 % 21 % Dividends received deduction ( 4 ) ( 10 ) Tax credits ( 4 ) ( 8 ) Impact of equity method presentation ( 1 ) ( 4 ) Interest exclusion from taxable income ( 1 ) ( 3 ) Foreign currency inflation — ( 1 ) Impact of noncontrolling interest presentation — ( 1 ) Low income housing tax credit amortization 2 5 State income taxes 2 2 Valuation allowance 1 1 Global Intangible Low-Taxed Income — 7 Other ( 1 ) — Effective income tax rate 15 % 9 % Income Taxes Paid Our income taxes paid, net of refunds received, were as follows: For the year ended December 31, 2025 (in millions) U.S. federal $ 159.1 U.S. state and local 33.5 Foreign 28.1 Total income taxes paid, net of refunds received $ 220.7 173 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 14. Income Taxes – (continued) Unrecognized Tax Benefits Our changes in unrecognized tax benefits were as follows: For the year ended December 31, 2025 2024 2023 (in millions) Balance at beginning of period $ 36.4 $ 39.3 $ 42.2 Additions based on tax positions related to the current year 0.7 0.3 0.3 Reductions for tax positions related to the current year ( 3.2 ) ( 3.2 ) ( 3.2 ) Settlements ( 15.3 ) — — Balance at end of period (1) $ 18.6 $ 36.4 $ 39.3 (1) If recognized, $ 1.3 million of the amount of unrecognized tax benefits would reduce our 2025 effective income tax rate. We recognize interest and penalties related to uncertain tax positions in operating expenses within the consolidated statements of operations. As of December 31, 2025 and 2024, we had recognized $( 0.1 ) million and $ 2.0 million of accumulated pre-tax interest and penalties expense (recovery) related to unrecognized tax benefits, respectively. Net Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Our significant components of net deferred income taxes were as follows: December 31, 2025 2024 (in millions) Deferred income tax assets: Net operating and capital loss carryforwards $ 97.8 $ 107.4 Tax credit carryforwards — 15.2 Net unrealized losses on available-for-sale securities 851.8 1,250.2 Employee benefits 319.7 334.3 Gross deferred income tax assets 1,269.3 1,707.1 Valuation allowance ( 82.1 ) ( 71.4 ) Total deferred income tax assets 1,187.2 1,635.7 Deferred income tax liabilities: Deferred acquisition costs ( 685.8 ) ( 689.7 ) Investments, including derivatives ( 299.8 ) ( 275.4 ) Funds withheld embedded derivative ( 520.3 ) ( 651.7 ) Real estate ( 124.1 ) ( 127.1 ) Intangible assets ( 345.5 ) ( 355.5 ) Insurance liabilities ( 736.8 ) ( 1,008.1 ) Other deferred income tax liabilities ( 111.6 ) ( 27.1 ) Total deferred income tax liabilities ( 2,823.9 ) ( 3,134.6 ) Total net deferred income tax liabilities $ ( 1,636.7 ) $ ( 1,498.9 ) 174 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 14. Income Taxes – (continued) Our net deferred income taxes by jurisdiction were as follows: December 31, 2025 2024 (in millions) Deferred income tax assets: State $ 43.0 $ 61.9 Foreign 176.7 145.2 Net deferred income tax assets 219.7 207.1 Deferred income tax liabilities: U.S. federal ( 1,547.2 ) ( 1,416.1 ) Foreign ( 309.2 ) ( 289.9 ) Net deferred income tax liabilities ( 1,856.4 ) ( 1,706.0 ) Total net deferred income tax liabilities $ ( 1,636.7 ) $ ( 1,498.9 ) In management’s judgment, total deferred income tax assets are more likely than not to be realized. Included in the deferred income tax asset are federal net operating loss, capital loss and tax credit carryforwards available to offset future taxable income or income taxes. As of December 31, 2024, we had a net operating loss carryforward of $ 16.9 million, a capital loss carryforward of $ 69.9 million and a federal tax credit carryforward of $ 15.2 million. As of December 31, 2025, these carryforwards have been fully utilized. 175 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 14. Income Taxes – (continued) As of December 31, 2025 and 2024, state net operating loss carryforwards were $ 288.4 million and $ 288.3 million, respectively, and will expire between 2032 and 2042. As of December 31, 2025 and 2024, foreign net operating loss carryforwards were $ 296.3 million and $ 264.3 million, respectively, with some expiring in 2025 while others never expire. We maintain valuation allowances by jurisdiction against the deferred income tax assets related to some of these carryforwards and other items, as utilization of these income tax benefits fail the more likely than not criteria in certain jurisdictions. As of December 31, 2025 and 2024, valuation allowances of $ 82.1 million and $ 71.4 million, respectively, had been recorded against the income tax benefits associated primarily with foreign net operating loss carryforwards and net unrealized capital losses on benefit plan trusts. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of the deferred income tax assets that are more likely than not to be realized. Deferred tax liabilities are recognized for taxes payable on the unremitted earnings from foreign operations of our subsidiaries, except where it is our intention to indefinitely reinvest a portion or all of these undistributed earnings. Deferred income taxes (including federal, state and foreign withholding) have not been provided on undistributed earnings from operations of foreign subsidiaries as of December 31, 2025. We currently do not intend to repatriate these unremitted earnings because we have several liquidity options to fund our domestic operations and obligations. These options include investing and financing activities, such as issuing debt, as well as cash flow and dividends from domestic operations. As of December 31, 2025 and 2024, it was not practicable to determine the amount of the unrecognized deferred tax liability that would arise if foreign earnings were remitted, due to the complexity of our international holding company structure, and other significant tax attributes and varying state tax laws. Taxes on remittances would be limited to foreign currency gains or losses, foreign withholding taxes and state income taxes, which we would anticipate to be immaterial. As of December 31, 2025, deferred taxes were also not provided on excess book carrying value over tax basis with respect to the original investment in our foreign subsidiaries. A tax liability will be recognized when we no longer plan to indefinitely reinvest a portion or all of these earnings or when we plan to sell a portion or all of our ownership interest. Effects of Tax Legislation On July 4, 2025, the United States enacted Public Law 119-21. The accounting consequences of a change in tax law are required to be recognized in the period legislation is enacted. Generally, a company is also required to consider the impact of new tax law on realizability of deferred tax assets (“DTAs”), including determination of whether a change in valuation allowance is necessary. We evaluated the provisions of Public Law 119-21 and incorporated the effects into our 2025 financial statements, which were not material. We will continue to monitor developments related to the legislation and assess any future impacts as additional guidance becomes available. We are currently monitoring the Pillar Two model rules proposed by the Organisation for Economic Co-operation and Development, including the Side-by-Side safe harbor agreement released in January 2026. The rules require a 15% global minimum tax but are expected to exempt U.S. multinationals from other countries’ top-up taxes once enacted. Generally, a company is required to consider the impact of new tax law on realizability of its DTAs, including determination of whether a change to its valuation allowance amounts is necessary. We made an accounting policy election to disregard the Pillar Two model rules when evaluating DTAs and rather recognize a current period tax expense when incurred. 176 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 14. Income Taxes – (continued) Other Tax Information Income tax returns are filed in the U.S. federal jurisdiction as well as various states and foreign jurisdictions where we and one or more of our subsidiaries conduct business. Although determined by jurisdiction, with few exceptions our tax uncertainties relate primarily to U.S. federal income tax matters. The Internal Revenue Service (“IRS”) has completed examination of our consolidated U.S. federal income tax returns for years prior to 2015. The U.S. federal statute of limitations has expired for years prior to 2015. The IRS is currently auditing our U.S. federal income tax returns for tax years 2015-2018 and 2019-2022. The statutes remain open through normal statute extensions. We do not expect the results of these audits, subsequent related adjustments or developments in other tax areas for all open tax years to significantly change the possible increase in the amount of unrecognized tax benefits, but the outcome of tax reviews is uncertain and unforeseen results can occur. We believe we have adequate defenses against, or sufficient provisions for, contested issues, but final resolution could take several years depending on whether legal remedies are pursued. Consequently, we do not believe issues that might arise in tax years subsequent to 2014 will have a material impact on our net income. 177 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits We provide a U.S. qualified defined benefit pension plan, covering U.S. employees that meet certain eligibility requirements and certain agents contracted on or before December 31, 2018. A final average pay benefit formula has been in place for plan participants employed prior to January 1, 2002. For agents, this formula ended on December 31, 2018, and for employees the formula ended on December 31, 2022. The final average pay benefit is based on the years of service and generally the employee’s or agent’s average annual compensation during the last five years prior to the earliest of termination, retirement or the formula end date. A cash balance benefit was added on January 1, 2002. A participant’s cash balance account is credited with an amount based on the participant’s salary, age and service. These credits accrue with interest. For plan participants hired on and after January 1, 2002, only the cash balance benefit applies. For pre-2002 participants, the pension benefit earned prior to the final average pay formula end date is the greater of the final average pay benefit or the cash balance benefit earned before the end date. They will also earn a new cash balance benefit for service after the formula end date. In addition, we sponsor non-qualified defined benefit plans subject to Section 409A of the Internal Revenue Code. This plan is for certain highly compensated employees and agents to replace the benefit that cannot be provided by the qualified defined benefit pension plan due to IRS limits. These nonqualified plans generally parallel the qualified plan but offer different payment options. No agent has been able to become a new participant in the nonqualified plan after 2018. We provide certain health care, life insurance and long-term care benefits for retired employees, their beneficiaries and covered dependents (“other postretirement benefits”). While virtually all U.S. employees continue to have access to the postretirement health care and life insurance benefits, only those U.S. employees that were hired prior to January 1, 2002, and retired prior to January 1, 2011, (post-65 medical) or January 1, 2020, (life insurance and pre-65 medical) were eligible to receive subsidized benefits. All others pay the full cost of coverage. The long-term care plan was subsidized only for those who retired prior to January 1, 2000, and is no longer accessible. The subsidy level for all benefits varies by plan, age, service and retirement date. The funding policy for all employee benefit plans is to fund the cost of providing pension benefits in the years that the employees and agents are providing service, taking into account the funding status of the trust. For the qualified defined benefit plan, this policy will be subject to an amount no lower than the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”), and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. While we designate assets to cover the computed liability of the nonqualified pension plan, the assets are not included as part of the asset balances presented in this footnote as they do not qualify as plan assets in accordance with U.S. GAAP. 178 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) Obligations and Funded Status The plans’ combined funded status, reconciled to amounts recognized in the consolidated statements of financial position, was as follows: Other postretirement Pension benefits benefits December 31, December 31, 2025 2024 2025 2024 (in millions) Change in benefit obligation Benefit obligation at beginning of year $ ( 3,245.9 ) $ ( 3,390.9 ) $ ( 61.6 ) $ ( 68.4 ) Service cost ( 59.3 ) ( 59.2 ) — — Interest cost ( 173.6 ) ( 161.5 ) ( 3.1 ) ( 3.2 ) Actuarial gain (loss) ( 49.6 ) 199.3 ( 1.1 ) 2.5 Participant contributions — — ( 6.3 ) ( 6.1 ) Benefits paid 177.4 165.0 13.1 13.6 Settlement 27.6 1.4 — — Benefit obligation at end of year $ ( 3,323.4 ) $ ( 3,245.9 ) $ ( 59.0 ) $ ( 61.6 ) Change in plan assets Fair value of plan assets at beginning of year $ 2,813.7 $ 2,909.6 $ 102.0 $ 99.8 Actual return on plan assets 249.3 ( 14.4 ) 12.5 8.4 Employer contribution 84.6 84.9 1.4 1.3 Participant contributions — — 6.3 6.1 Benefits paid ( 177.4 ) ( 165.0 ) ( 13.1 ) ( 13.6 ) Settlement ( 27.6 ) ( 1.4 ) — — Fair value of plan assets at end of year $ 2,942.6 $ 2,813.7 $ 109.1 $ 102.0 Amount recognized in statement of financial position Other assets $ 19.9 $ — $ 50.1 $ 40.4 Other liabilities ( 400.7 ) ( 432.2 ) — — Total $ ( 380.8 ) $ ( 432.2 ) $ 50.1 $ 40.4 Amount recognized in accumulated other comprehensive (income) loss Total net actuarial (gain) loss $ 305.9 $ 371.7 $ ( 35.2 ) $ ( 29.9 ) Prior service benefit ( 38.6 ) ( 53.9 ) ( 2.1 ) ( 3.2 ) Pre-tax accumulated other comprehensive (income) loss $ 267.3 $ 317.8 $ ( 37.3 ) $ ( 33.1 ) The accumulated benefit obligation for all defined benefit pension plans was $ 3,323.4 million and $ 3,245.9 million as of December 31, 2025 and 2024, respectively. Employer contributions to the pension plans include contributions made directly to the qualified pension plan assets and contributions from corporate assets to pay nonqualified pension benefits. Benefits paid from the pension plans include both qualified and nonqualified plan benefits. Nonqualified pension plan assets are not included as part of the asset balances presented in this footnote. The nonqualified pension plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The assets held in a Rabbi trust are available to satisfy the claims of general creditors only in the event of bankruptcy. Therefore, these assets are fully consolidated in our consolidated statements of financial position and are not reflected in our funded status as they do not qualify as plan assets under U.S. GAAP. The market value of assets held in these trusts was $ 352.7 million and $ 348.8 million as of December 31, 2025 and 2024, respectively. Pension Plan Changes and Plan Gains/Losses For the year ended December 31, 2025, the pension plans had an actuarial loss primarily due to a decrease in discount rate, which was partially offset by an asset gain. For the year ended December 31, 2024, the pension plans had an actuarial gain primarily due to an increase in discount rate. 179 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) Other Postretirement Plan Changes and Plan Gains/Losses For the year ended December 31, 2025, the other postretirement benefit plans had an actuarial loss primarily due to a decrease in discount rates. For the year ended December 31, 2024, the other postretirement benefit plans had an actuarial gain primarily due to an increase in discount rates. Information for Pension Plans With an Accumulated Benefit Obligation in Excess of Plan Assets For 2025, the qualified plan had assets in excess of the accumulated benefit obligation, and the nonqualified plan had an accumulated benefit obligation in excess of plan assets. For 2024, both the qualified and nonqualified plans had accumulated benefit obligations in excess of plan assets. As noted previously, the nonqualified plans have assets that are deposited in trusts that fail to meet the U.S. GAAP requirements to be included in plan assets; however, these assets are included in our consolidated statements of financial position. December 31, 2025 2024 (in millions) Projected benefit obligation $ 3,323.4 $ 3,245.9 Accumulated benefit obligation 3,323.4 3,245.9 Fair value of plan assets 2,942.6 2,813.7 We did not have any other postretirement benefit plans with an accumulated postretirement benefit obligation in excess of plan assets. Components of Net Periodic Benefit Cost Pension benefits Other postretirement benefits For the year ended December 31, 2025 2024 2023 2025 2024 2023 (in millions) Service cost $ 59.3 $ 59.2 $ 55.6 $ — $ — $ — Interest cost 173.6 161.5 160.1 3.1 3.2 3.4 Expected return on plan assets ( 171.8 ) ( 170.4 ) ( 163.2 ) ( 4.7 ) ( 4.5 ) ( 4.6 ) Amortization of prior service benefit ( 15.3 ) ( 16.7 ) ( 16.8 ) ( 1.1 ) ( 1.1 ) ( 0.8 ) Recognized net actuarial (gain) loss 34.9 39.0 41.0 ( 1.4 ) ( 0.9 ) ( 1.0 ) Settlement 3.0 0.2 — — — — Net periodic benefit cost (income) $ 83.7 $ 72.8 $ 76.7 $ ( 4.1 ) $ ( 3.3 ) $ ( 3.0 ) We use the fair market value of assets to determine components of net periodic benefit cost. The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations. 180 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) The pension plans’ actuarial gains and losses are amortized using a straight-line amortization method over the average remaining service period of plan participants. The other postretirement plans use a straight-line amortization over the average future lifetime of its remaining covered group of retirees. For the qualified pension plan, gains and losses are amortized without use of the 10 % allowable corridor. For the nonqualified pension plans and other postretirement benefit plans, the corridors allowed are used. Pension benefits Other postretirement benefits For the year ended December 31, 2025 2024 2025 2024 (in millions) Other changes recognized in accumulated other comprehensive (income) loss Net actuarial gain $ ( 27.9 ) $ ( 14.5 ) $ ( 6.7 ) $ ( 6.4 ) Amortization of gain (loss) ( 34.9 ) ( 39.0 ) 1.4 0.9 Amortization of prior service benefit 15.3 16.7 1.1 1.1 Settlement ( 3.0 ) ( 0.2 ) — — Total recognized in pre-tax accumulated other comprehensive income $ ( 50.5 ) $ ( 37.0 ) $ ( 4.2 ) $ ( 4.4 ) Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss $ 33.2 $ 35.8 $ ( 8.3 ) $ ( 7.7 ) Net actuarial (gain) loss and net prior service cost benefit have been recognized in AOCI. Assumptions Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded Status section Pension benefits December 31, 2025 2024 Discount rate 5.40 % 5.50 % Interest crediting rate - cash balance benefit 5.00 % 5.00 % Rate of compensation increase 4.50 % 4.52 % Other postretirement benefits December 31, 2025 2024 Discount rate 5.10 % 5.35 % Weighted average assumptions used to determine net periodic benefit cost Pension benefits For the year ended December 31, 2025 2024 2023 Discount rate 5.50 % 4.90 % 5.10 % Expected long-term return on plan assets 6.40 % 6.10 % 6.20 % Interest crediting rate - cash balance benefit: Pre-July 1, 2019 5.00 % 5.00 % 5.00 % On and post-July 1, 2019 4.00 % 4.00 % 4.00 % Rate of compensation increase 4.50 % 4.52 % 4.53 % Other postretirement benefits For the year ended December 31, 2025 2024 2023 Discount rate 5.35 % 4.80 % 5.00 % Expected long-term return on plan assets 4.70 % 4.65 % 5.05 % 181 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) For participants who entered the plan on/after July 1, 2019, the plan provides a fixed 4 % interest credit. For those who entered the plan prior to July 1, 2019, the interest crediting rate is indexed to 30 -year and 1 -year Treasury rates subject to a 5% floor. The assumed salary growth rate is the lifecount-weighted average rate of salary growth in the coming year only, as the impact of salary assumption for cash balance benefits are limited to the upcoming year service cost. For the pension benefits, the discount rate is determined by projecting future benefit payments inherent in the projected benefit obligation and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The expected return on plan assets is the long-term rate we expect to be earned based on the long-term investment policy of the plans and the various classes of invested funds. A weighted average rate was developed based on those overall rates and the target asset allocation of the plans. For other postretirement benefits, the discount rate is determined by projecting future benefit payments inherent in the accumulated postretirement benefit obligation and discounting those cash flows using a spot yield curve for high quality corporate bonds. The plans’ expected benefit payments are discounted to determine a present value using the yield curve and the discount rate is the level rate that produces the same present value. The 4.70 % expected long-term return on plan assets for 2025 was based on the weighted average expected long-term asset returns for the plans. The expected long-term rates for the home office and agent pre-65 medical/life plans and post-65 medical plans were 4.75 % and 4.60 %, respectively. Assumed Health Care Cost Trend Rates Used to Determine Net Periodic Benefit Cost December 31, 2025 2024 Health care cost trend rate assumed for next year under age 65 8.50 % 7.50 % Health care cost trend rate assumed for next year age 65 and over 6.25 % 6.50 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50 % 4.50 % Year that the rate reaches the ultimate trend rate (under age 65) 2034 2033 Year that the rate reaches the ultimate trend rate (65 and older) 2032 2032 Pension Plan and Other Postretirement Benefit Plan Assets Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. ● Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets. ● Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset, either directly or indirectly. ● Level 3 – Fair values are based on significant unobservable inputs for the asset. Our pension plan assets consist of investments in pooled separate accounts and single client separate accounts. Net asset value (“NAV”) of the pooled separate accounts is calculated in a manner consistent with U.S. GAAP for investment companies and is determinative of their fair value. Several of the pooled separate accounts invest in publicly quoted mutual funds or actively managed stocks. The fair value of the underlying mutual funds or stocks is used to determine the NAV of the separate account, which is not publicly quoted. Some of the pooled separate accounts also invest in fixed income securities. The fair value of the underlying securities is based on quoted prices of similar assets and used to determine the NAV of the separate account. Some of the pooled separate accounts invest in real estate properties. The fair value is based on discounted cash flow valuation models that utilize public real estate market data inputs such as transaction prices, market rent growth, vacancy levels, leasing absorption, market capitalization rates and discount rates. 182 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) The single client separate accounts invest in fixed income securities, hedge funds, a pooled separate account investment and other assets. The fixed income securities include U.S. Treasury bonds for which the fair value is based on quoted prices of identical assets in active markets. The fair value of the other fixed income securities is determined either from prices obtained from third party pricing vendors who use observable market information to determine prices or from internal models using substantially all observable inputs or a matrix pricing valuation approach. The hedge funds are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. The NAV of the pooled separate account investment is calculated in a manner consistent with U.S. GAAP for investment companies and is determinative of its fair value. The carrying amounts of other assets, which are highly liquid in nature, are used to approximate fair value. Our other postretirement benefit plan assets consist of cash, investments in fixed income security portfolios and investments in equity security portfolios. Because of the nature of cash, its carrying amount approximates fair value. The fair value of fixed income investment funds, U.S. equity portfolios and international equity portfolios is based on quoted prices in active markets for identical assets. Pension Plan Assets The fair value of the qualified pension plan’s assets by asset category as of the most recent measurement date was as follows: December 31, 2025 Assets Amount Fair value hierarchy level measured at measured at fair value net asset value Level 1 Level 2 Level 3 (in millions) Asset category Pooled separate account investments: U.S. large cap equity portfolios (1) $ 231.5 $ — $ — $ 231.5 $ — U.S. small/mid cap equity portfolios (2) 95.0 — — 95.0 — Balanced asset portfolios (3) 162.8 — — 162.8 — International equity portfolios (4) 138.0 — — 138.0 — Fixed income security portfolios (5) 0.2 — — 0.2 — Real estate investment portfolios (6) 111.7 — — 111.7 — Single client separate account investments: Fixed income securities: U.S. government and agencies 84.3 — 84.3 — — States and political subdivisions 16.7 — — 16.7 — Corporate 1,470.9 — — 1,470.9 — Private equity partnerships (7) 9.2 — — 9.2 — Mutual funds 144.2 78.5 65.7 — — Pooled separate account investment (8) 465.6 — — 465.6 — Other (9) 12.5 — — 12.5 — Total $ 2,942.6 $ 78.5 $ 150.0 $ 2,714.1 $ — 183 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) December 31, 2024 Assets Amount Fair value hierarchy level measured at measured at fair value net asset value Level 1 Level 2 Level 3 (in millions) Asset category Pooled separate account investments: U.S. large cap equity portfolios (1) $ 236.5 $ — $ — $ 236.5 $ — U.S. small/mid cap equity portfolios (2) 98.4 — — 98.4 — Balanced asset portfolios (3) 135.0 — — 135.0 — International equity portfolios (4) 135.9 — — 135.9 — Fixed income security portfolios (5) 26.8 — — 26.8 — Real estate investment portfolios (6) 133.6 — — 133.6 — Single client separate account investments: Fixed income securities: U.S. government and agencies 93.7 — 93.7 — — States and political subdivisions 15.5 — — 15.5 — Corporate 1,387.2 — — 1,387.2 — Private equity partnerships (7) 3.6 3.6 — — — Mutual funds 109.9 — 109.9 — — Pooled separate account investment (8) 423.0 — — 423.0 — Other (9) 14.6 — — 14.6 — Total $ 2,813.7 $ 3.6 $ 203.6 $ 2,606.5 $ — (1) The portfolios invest primarily in publicly traded equity securities of large U.S. companies. (2) The portfolios invest primarily in publicly traded equity securities of mid-sized and small U.S. companies. (3) The portfolios are a combination of underlying fixed income and equity investment options. These investment options may include balanced, asset allocation, target-date and target-risk investment options. Although typically lower risk than investment options that invest solely in equities, all investment options in this category have the potential to lose value. (4) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. (5) The portfolios invest primarily in fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations. (6) The portfolios invest primarily in U.S. commercial real estate properties through a separate account. (7) The private equity partnerships are investments primarily focused on North American and global private equity buyout and secondary private equity strategies. (8) The single client separate accounts invest in a money market pooled separate account. (9) Includes cash, net derivative assets (liabilities) and net receivables (payables) for the single client separate accounts. We have established an investment policy that provides the investment objectives and guidelines for the pension plan. Our investment strategy is to achieve the following: ● Obtain a reasonable long-term return consistent with the level of risk assumed and at a cost of operation within prudent levels. Performance benchmarks are monitored. ● Ensure sufficient liquidity to meet the emerging benefit liabilities for the plan. ● Provide for diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the pension plan consistent with market and economic risk. 184 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) In administering the qualified pension plan’s asset allocation strategy, we consider the projected liability stream of benefit payments, the relationship between current and projected assets of the plan and the projected actuarial liabilities streams, the historical performance of capital markets adjusted for the perception of future short- and long-term capital market performance and the perception of future economic conditions. According to our investment policy, the target asset allocation for the qualified plan is: Asset category Target allocation Fixed income security portfolios 70 % Equity portfolios 15 % Private investments 15 % Other Postretirement Benefit Plan Assets The fair value of the other postretirement benefit plans’ assets by asset category as of the most recent measurement date was as follows: December 31, 2025 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 0.8 $ 0.8 $ — $ — Fixed income security portfolios (1) 51.6 51.6 — — U.S. equity portfolios (2) 39.7 39.7 — — International equity portfolios (3) 17.0 17.0 — — Total $ 109.1 $ 109.1 $ — $ — December 31, 2024 Assets Fair value hierarchy level measured at fair value Level 1 Level 2 Level 3 (in millions) Asset category Cash and cash equivalents $ 1.0 $ 1.0 $ — $ — Fixed income security portfolios (1) 48.6 48.6 — — U.S. equity portfolios (2) 38.7 38.7 — — International equity portfolios (3) 13.7 13.7 — — Total $ 102.0 $ 102.0 $ — $ — (1) The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to, corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations. (2) The portfolios invest primarily in publicly traded equity securities of large U.S. companies. (3) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. The investment strategies for the other postretirement benefit plans are similar to those employed by the qualified pension plan. According to our investment policy, the target asset allocation for the other postretirement benefit plans is: Asset category Target allocation Fixed income security portfolios 50 % U.S. equity portfolios 35 % International equity portfolios 15 % 185 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) Contributions Our funding policy for our qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under ERISA and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. We do not anticipate contributions will be needed to satisfy the minimum funding requirements of ERISA for our qualified plan. We are unable to estimate the amount that may be contributed, but it is possible that we may fund the plans in 2026 up to $ 70.0 million. This includes funding for both our qualified and nonqualified pension plans. While we designate assets to cover the computed liability of the nonqualified plan, the assets are not included as part of the asset balances presented in this footnote as they do not qualify as plan assets in accordance with U.S. GAAP. We may contribute to our other postretirement benefit plans in 2026 pending future analysis. Estimated Future Benefit Payments The estimated future benefit payments, which reflect expected future service, are: Other postretirement benefits (gross benefit payments, including Pension benefits prescription drug benefits) (in millions) Year ending December 31: 2026 $ 221.1 $ 11.7 2027 215.0 10.7 2028 219.1 9.7 2029 226.3 9.0 2030 236.2 8.2 2031-2035 1,298.5 34.1 The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants’ share of the cost, which is funded by their contributions to the plan. The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2025. 186 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) Defined Benefit Pension Plans Supplemental Information Certain key summary data is shown below separately for qualified and nonqualified plans. For the year ended December 31, 2025 2024 Qualified Nonqualified Qualified Nonqualified Plan Plan Total Plan Plan Total (in millions) Amount recognized in statement of financial position Other assets $ 19.9 $ — $ 19.9 $ — $ — $ — Other liabilities — ( 400.7 ) ( 400.7 ) ( 34.9 ) ( 397.3 ) ( 432.2 ) Total $ 19.9 $ ( 400.7 ) $ ( 380.8 ) $ ( 34.9 ) $ ( 397.3 ) $ ( 432.2 ) Amount recognized in accumulated other comprehensive loss Total net actuarial loss $ 259.4 $ 46.5 $ 305.9 $ 331.0 $ 40.7 $ 371.7 Prior service benefit ( 34.6 ) ( 4.0 ) ( 38.6 ) ( 47.4 ) ( 6.5 ) ( 53.9 ) Pre-tax accumulated other comprehensive loss $ 224.8 $ 42.5 $ 267.3 $ 283.6 $ 34.2 $ 317.8 Components of net periodic benefit cost Service cost $ 54.4 $ 4.9 $ 59.3 $ 55.2 $ 4.0 $ 59.2 Interest cost 152.5 21.1 173.6 141.6 19.9 161.5 Expected return on plan assets ( 171.8 ) — ( 171.8 ) ( 170.4 ) — ( 170.4 ) Amortization of prior service benefit ( 12.8 ) ( 2.5 ) ( 15.3 ) ( 12.7 ) ( 4.0 ) ( 16.7 ) Recognized net actuarial loss 33.8 1.1 34.9 35.5 3.5 39.0 Settlement 3.0 — 3.0 0.2 — 0.2 Net periodic benefit cost $ 59.1 $ 24.6 $ 83.7 $ 49.4 $ 23.4 $ 72.8 Other changes recognized in accumulated other comprehensive (income) loss Net actuarial (gain) loss $ ( 34.8 ) $ 6.9 $ ( 27.9 ) $ 5.2 $ ( 19.7 ) $ ( 14.5 ) Amortization of net loss ( 33.7 ) ( 1.2 ) ( 34.9 ) ( 35.4 ) ( 3.6 ) ( 39.0 ) Amortization of prior service benefit 12.8 2.5 15.3 12.7 4.0 16.7 Settlement ( 3.0 ) — ( 3.0 ) ( 0.2 ) — ( 0.2 ) Total recognized in pre-tax accumulated other comprehensive (income) loss $ ( 58.7 ) $ 8.2 $ ( 50.5 ) $ ( 17.7 ) $ ( 19.3 ) $ ( 37.0 ) Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive loss $ 0.4 $ 32.8 $ 33.2 $ 31.7 $ 4.1 $ 35.8 Defined Contribution and Deferred Compensation Plans In addition, we have defined contribution plans that are generally available to all U.S. employees and agents. Eligible participants could not contribute more than $ 23,500 of their compensation to the plans in 2025. For all participants, we match the participant’s contributions at a 75 % contribution rate up to a maximum matching contribution of 6 % of the participant’s compensation. The defined contribution plans allow employees to choose among various investment options, including our common stock, which is available through our Employee Stock Ownership Plan (“ESOP”). We contributed $ 78.9 million, $ 75.4 million and $ 74.1 million in 2025, 2024 and 2023, respectively, to our qualified defined contribution plans. 187 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 15. Employee and Agent Benefits – (continued) The number of shares of our common stock allocated to participants in the ESOP was 1.4 million and 1.5 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the fair value of the ESOP, which includes earned and unearned common stock, was $ 125.1 million and $ 119.7 million, respectively. The ESOP’s total assets include our common stock and cash. The ESOP purchases our common stock on the open market. The number of shares of our common stock held within the ESOP is treated as outstanding in both our basic and diluted earnings per share calculations. We also have nonqualified deferred compensation plans available to select employees and agents that allow them to defer compensation amounts in excess of limits imposed by U.S. federal tax law with respect to the qualified plans. For certain nonqualified deferred compensation plans that include an employer matching contribution, in 2025 we matched the Grandfathered Choice Participant’s deferral at a 50 % match deferral rate up to a maximum matching deferral of 3 % of the participant’s compensation. For all other participants in nonqualified deferred compensation plans that include an employer matching contribution, we matched the participant’s deferral at a 75 % match deferral rate up to a maximum matching deferral of 6 % of the participant’s compensation. We contributed $ 4.1 million, $ 3.6 million and $ 3.1 million in 2025, 2024 and 2023, respectively, to our nonqualified deferred compensation plans. 188 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 16. Contingencies, Guarantees, Indemnifications and Leases Litigation and Regulatory Contingencies We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services, individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages. We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses. In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Department of Labor (“DOL”) and other regulatory agencies in the U.S. and in international locations in which we do business, regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future. While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate as of December 31, 2025. Guarantees and Indemnifications In the normal course of business, we have provided guarantees to third parties primarily related to former subsidiaries and joint ventures. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of December 31, 2025, was approximately $ 69.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. Furthermore, in connection with our contingent funding agreements, we are required to purchase any principal and interest strips of U.S. Treasury securities that are due and not paid from the associated unconsolidated trusts. The maximum exposure under these agreements as of December 31, 2025, was $ 850.0 million. See Note 13, Debt, for further details. We manage mandatory privatized social security funds in Chile. By regulation, we have a required minimum guarantee on the funds’ relative return. Because the guarantee has no limitation with respect to duration or amount, the maximum exposure of the guarantee in the future is indeterminable. 189 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 16. Contingencies, Guarantees, Indemnifications and Leases – (continued) We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions, financing and reinsurance transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period. Guaranty Funds Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. A state’s fund assesses its members based on their pro rata market share of written premiums in the state for the classes of insurance for which the insolvent insurer was engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. We accrue liabilities for guaranty fund assessments when an assessment is probable, can be reasonably estimated and when the event obligating us to pay has occurred. While we cannot predict the amount and timing of any future assessments, we have established reserves we believe are adequate for assessments relating to insurance companies that are currently subject to insolvency proceedings. As of December 31, 2025 and 2024, the liability balance for guaranty fund assessments, which is not discounted, was $ 18.8 million and $ 29.3 million, respectively, and was reported within other liabilities in the consolidated statements of financial position. As of December 31, 2025 and 2024, $ 14.3 million and $ 17.5 million, respectively, related to premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position. Leases As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various operating leases. We also lease buildings and hardware storage equipment under finance leases. Lease assets and liabilities are recognized at the commencement of a lease based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments. Lease term may include options to extend or terminate the lease when it is reasonably certain we will exercise the option. Leases with an initial term of twelve months or less are not recorded on the consolidated statements of financial position. We recognize lease expense for leases on a straight-line basis over the lease term. Some of our lease agreements include payments for property taxes, insurance, utilities or common area maintenance, which are not based on an index or rate. These payments are recognized in net income in the period in which the obligation has occurred. We sublease certain office space to third parties, which are primarily operating leases. We record sublease income on a straight-line basis over the lease term. 190 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 16. Contingencies, Guarantees, Indemnifications and Leases – (continued) The lease assets and liabilities were as follows: December 31, 2025 2024 (in millions) Assets Operating lease assets (1) $ 125.8 $ 151.4 Finance lease assets (1) 41.0 67.6 Total lease assets $ 166.8 $ 219.0 Liabilities Operating lease liabilities (2) $ 124.0 $ 150.6 Finance lease liabilities (2) 42.6 69.0 Total lease liabilities $ 166.6 $ 219.6 (1) Operating and finance lease assets are primarily reported within property and equipment on the consolidated statements of financial position. (2) Operating and finance lease liabilities are reported within other liabilities on the consolidated statements of financial position. The lease cost was as follows: For the year ended December 31, 2025 2024 2023 (in millions) Finance lease cost (1): Amortization of right-of-use assets $ 27.3 $ 29.8 $ 32.9 Interest on lease liabilities 2.2 2.6 1.9 Operating lease cost (1) 49.4 55.3 56.1 Other lease cost (1) (2) 8.6 9.2 9.5 Sublease income (3) ( 1.2 ) ( 0.5 ) ( 0.3 ) Total lease cost $ 86.3 $ 96.4 $ 100.1 (1) Finance, operating and other lease costs are primarily included in operating expenses on the consolidated statements of operations. (2) Other lease cost primarily reflects variable and short-term lease costs. (3) Sublease income is included in fees and other revenues on the consolidated statements of operations. 191 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 16. Contingencies, Guarantees, Indemnifications and Leases – (continued) Payments for operating leases for the years ended December 31, 2025, 2024 and 2023, were $ 54.0 million, $ 50.3 million and $ 60.1 million, respectively. Payments for finance leases for the years ended December 31, 2025, 2024 and 2023, were $ 29.3 million, $ 32.0 million and $ 34.3 million, respectively. The following represents future payments due by period for lease obligations: Operating leases Finance leases Total (in millions) For the twelve months ending December 31: 2026 $ 40.7 $ 24.7 $ 65.4 2027 36.3 15.0 51.3 2028 22.6 4.4 27.0 2029 12.1 0.2 12.3 2030 8.2 — 8.2 2031 and thereafter 19.3 — 19.3 Total lease payments 139.2 44.3 183.5 Less: interest 15.2 1.7 16.9 Present value of lease liabilities $ 124.0 $ 42.6 $ 166.6 The weighted-average remaining lease term and weighted-average discount rates were as follows: For the year ended December 31, 2025 2024 2023 Weighted-average remaining lease term (in years): Operating leases 5.5 5.5 6.0 Finance leases 2.0 2.8 3.0 Weighted-average discount rate: Operating leases 3.8 % 3.7 % 3.6 % Finance leases 4.1 % 4.0 % 3.5 % 192 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 17. Stockholders’ Equity Common Stock Dividends For the year ended December 31, 2025 2024 2023 Dividends declared per common share $ 3.08 $ 2.85 $ 2.60 Reconciliation of Outstanding Common Shares For the year ended December 31, 2025 2024 2023 Beginning balance 226,225,161 236,438,294 243,549,782 Shares issued 2,149,324 2,455,503 2,469,841 Treasury stock acquired ( 10,993,573 ) ( 12,668,636 ) ( 9,581,329 ) Ending balance 217,380,912 226,225,161 236,438,294 In January 2022, our Board of Directors (“Board”) authorized a $ 1.6 billion increase to a June 2021 share repurchase program authorization that was previously completed. The increased repurchase authorization was completed in April 2024. In February 2024, our Board authorized a share repurchase program of up to $ 1.5 billion of our outstanding common stock, which was completed in December 2025. In February 2025, our Board authorized a share repurchase program of up to $ 1.5 billion of our outstanding common stock, which has no expiration date. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. 193 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 17. Stockholders’ Equity – (continued) Other Comprehensive Income For the year ended December 31, 2025 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 1,710.8 $ ( 367.1 ) $ 1,343.7 Reclassification adjustment for losses included in net income (1) 144.1 ( 30.3 ) 113.8 Adjustments for assumed changes in amortization patterns ( 1.0 ) 0.2 ( 0.8 ) Adjustments for assumed changes in policyholder liabilities 9.0 ( 1.9 ) 7.1 Net unrealized gains on available-for-sale securities 1,862.9 ( 399.1 ) 1,463.8 Net unrealized losses on derivative instruments during the period ( 100.5 ) 21.1 ( 79.4 ) Reclassification adjustment for gains included in net income (2) ( 5.6 ) 1.2 ( 4.4 ) Adjustments for assumed changes in amortization patterns 0.1 — 0.1 Net unrealized losses on derivative instruments ( 106.0 ) 22.3 ( 83.7 ) Liability for future policy benefits discount rate remeasurement loss (3) ( 799.2 ) 173.5 ( 625.7 ) Market risk benefit nonperformance risk remeasurement gain (4) 2.0 ( 0.4 ) 1.6 Foreign currency translation adjustment during the period 228.7 2.0 230.7 Reclassification adjustment for losses included in net income (5) 0.4 — 0.4 Foreign currency translation adjustment 229.1 2.0 231.1 Unrecognized postretirement benefit obligation during the period 34.7 ( 8.6 ) 26.1 Amortization of amounts included in net periodic benefit cost (6) 20.1 ( 5.1 ) 15.0 Net unrecognized postretirement benefit obligation 54.8 ( 13.7 ) 41.1 Other comprehensive income $ 1,243.6 $ ( 215.4 ) $ 1,028.2 For the year ended December 31, 2024 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ ( 1,033.4 ) $ 227.0 $ ( 806.4 ) Reclassification adjustment for losses included in net income (1) 138.4 ( 26.2 ) 112.2 Adjustments for assumed changes in amortization patterns 9.8 ( 2.1 ) 7.7 Adjustments for assumed changes in policyholder liabilities 10.8 ( 2.3 ) 8.5 Net unrealized losses on available-for-sale securities ( 874.4 ) 196.4 ( 678.0 ) Net unrealized gains on derivative instruments during the period 71.2 ( 15.0 ) 56.2 Reclassification adjustment for gains included in net income (2) ( 3.5 ) 0.8 ( 2.7 ) Adjustments for assumed changes in amortization patterns 0.5 ( 0.1 ) 0.4 Net unrealized gains on derivative instruments 68.2 ( 14.3 ) 53.9 Liability for future policy benefits discount rate remeasurement gain (3) 1,281.9 ( 271.9 ) 1,010.0 Market risk benefit nonperformance risk remeasurement loss (4) ( 10.3 ) 2.2 ( 8.1 ) Foreign currency translation adjustment ( 301.5 ) 4.9 ( 296.6 ) Unrecognized postretirement benefit obligation during the period 20.7 ( 5.1 ) 15.6 Amortization of amounts included in net periodic benefit cost (6) 20.3 ( 5.2 ) 15.1 Net unrecognized postretirement benefit obligation 41.0 ( 10.3 ) 30.7 Other comprehensive income $ 204.9 $ ( 93.0 ) $ 111.9 194 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 17. Stockholders’ Equity – (continued) For the year ended December 31, 2023 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 1,986.8 $ ( 419.8 ) $ 1,567.0 Reclassification adjustment for losses included in net income (1) 351.1 ( 73.5 ) 277.6 Adjustments for assumed changes in amortization patterns ( 2.6 ) 0.6 ( 2.0 ) Adjustments for assumed changes in policyholder liabilities 0.7 ( 0.2 ) 0.5 Net unrealized gains on available-for-sale securities 2,336.0 ( 492.9 ) 1,843.1 Net unrealized losses on derivative instruments during the period ( 44.9 ) 9.4 ( 35.5 ) Reclassification adjustment for gains included in net income (2) ( 7.4 ) 1.6 ( 5.8 ) Adjustments for assumed changes in amortization patterns ( 0.9 ) 0.2 ( 0.7 ) Adjustments for assumed changes in policyholder liabilities 0.2 — 0.2 Net unrealized losses on derivative instruments ( 53.0 ) 11.2 ( 41.8 ) Liability for future policy benefits discount rate remeasurement loss (3) ( 365.9 ) 53.2 ( 312.7 ) Market risk benefit nonperformance risk remeasurement loss (4) ( 39.2 ) 8.3 ( 30.9 ) Foreign currency translation adjustment during the period 68.0 5.1 73.1 Reclassification adjustment for losses included in net income (5) 0.6 — 0.6 Foreign currency translation adjustment 68.6 5.1 73.7 Unrecognized postretirement benefit obligation during the period ( 19.3 ) 5.2 ( 14.1 ) Amortization of amounts included in net periodic benefit cost (6) 22.4 ( 5.9 ) 16.5 Net unrecognized postretirement benefit obligation 3.1 ( 0.7 ) 2.4 Other comprehensive income $ 1,949.6 $ ( 415.8 ) $ 1,533.8 (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) and net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. (2) See Note 5, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Includes the discount rate remeasurement gain (loss) associated with the LFPB and the associated reinsurance recoverable. See Note 10, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details. (4) See Note 11, Market Risk Benefits, for further details. (5) Relates to the release of cumulative translation adjustment from the dissolution of foreign subsidiaries. (6) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 15, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. 195 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 17. Stockholders’ Equity – (continued) Accumulated Other Comprehensive Loss MRB Net unrealized Net unrealized LFPB nonperformance Foreign Unrecognized Accumulated losses on gains (losses) discount rate risk currency postretirement other available-for-sale on derivative remeasurement remeasurement translation benefit comprehensive securities (1) instruments gain loss adjustment obligation loss (in millions) Balances as of January 1, 2023 $ ( 5,857.9 ) $ 39.7 $ 740.9 $ 24.0 $ ( 1,571.6 ) $ ( 254.1 ) $ ( 6,879.0 ) Other comprehensive income during the period, net of adjustments 1,565.5 ( 36.0 ) ( 312.7 ) ( 30.9 ) 73.0 ( 14.1 ) 1,244.8 Amounts reclassified from AOCI 277.6 ( 5.8 ) — — 0.6 16.5 288.9 Other comprehensive income 1,843.1 ( 41.8 ) ( 312.7 ) ( 30.9 ) 73.6 2.4 1,533.7 Balances as of December 31, 2023 ( 4,014.8 ) ( 2.1 ) 428.2 ( 6.9 ) ( 1,498.0 ) ( 251.7 ) ( 5,345.3 ) Other comprehensive loss during the period, net of adjustments ( 790.3 ) 56.6 1,010.0 ( 8.1 ) ( 287.9 ) 15.6 ( 4.1 ) Amounts reclassified from AOCI 112.2 ( 2.7 ) — — — 15.1 124.6 Other comprehensive income ( 678.1 ) 53.9 1,010.0 ( 8.1 ) ( 287.9 ) 30.7 120.5 Balances as of December 31, 2024 ( 4,692.9 ) 51.8 1,438.2 ( 15.0 ) ( 1,785.9 ) ( 221.0 ) ( 5,224.8 ) Other comprehensive income during the period, net of adjustments 1,350.0 ( 79.3 ) ( 625.7 ) 1.6 238.9 26.1 911.6 Amounts reclassified from AOCI 113.8 ( 4.4 ) — — 0.4 15.0 124.8 Other comprehensive income 1,463.8 ( 83.7 ) ( 625.7 ) 1.6 239.3 41.1 1,036.4 Balances as of December 31, 2025 $ ( 3,229.1 ) $ ( 31.9 ) $ 812.5 $ ( 13.4 ) $ ( 1,546.6 ) $ ( 179.9 ) $ ( 4,188.4 ) (1) Net unrealized losses on available-for-sale securities for which an allowance for credit loss has been recorded were $ 9.0 million, $ 3.8 million and $ 4.3 million as of December 31, 2025, 2024 and 2023, respectively. Noncontrolling Interest Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position. The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is excluded from stockholders’ equity and reported separately as redeemable noncontrolling interest on the consolidated statements of financial position. Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds. For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital. 196 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 17. Stockholders’ Equity – (continued) Following is a reconciliation of the changes in the redeemable noncontrolling interest: For the year ended December 31, 2025 2024 2023 (in millions) Beginning balance $ 337.7 $ 248.9 $ 262.0 Net income attributable to redeemable noncontrolling interest 63.2 11.8 23.7 Redeemable noncontrolling interest of deconsolidated entities (1) ( 24.9 ) ( 185.6 ) ( 3.0 ) Contributions from redeemable noncontrolling interest 185.0 330.0 43.3 Distributions to redeemable noncontrolling interest ( 69.6 ) ( 55.8 ) ( 75.0 ) Purchase of subsidiary shares from redeemable noncontrolling interest (2) ( 7.6 ) ( 0.6 ) ( 1.6 ) Change in redemption value of redeemable noncontrolling interest — ( 4.4 ) ( 1.1 ) Stock-based compensation attributable to redeemable noncontrolling interest 0.2 0.2 0.1 Other comprehensive income (loss) attributable to redeemable noncontrolling interest ( 9.7 ) ( 6.8 ) 0.5 Ending balance $ 474.3 $ 337.7 $ 248.9 (1) We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation. (2) In 2025, we acquired an additional interest in Principal Real Estate USA Fondo de Inversion. In 2024 and 2023, we acquired an additional interest in Origin Asset Management. Dividend Limitations The declaration and payment of our common stock dividends is subject to the discretion of our Board of Directors and will depend on our overall financial condition, results of operations, capital levels, cash requirements, future prospects, receipt of dividends or other distributions from Principal Life (as described below), risk management considerations and other factors deemed relevant by the Board. No significant restrictions limit the payment of dividends by us, except those generally applicable to corporations incorporated in Delaware. Under Iowa law, Principal Life may pay dividends or make other distributions only from the earned surplus arising from its business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa (“the Commissioner”) to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10 % of Principal Life’s statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on this limitation and 2025 statutory results, Principal Life could pay approximately $ 1,234.0 million in ordinary stockholder dividends in 2026 without prior regulatory approval. However, because the dividend test is based on dividends previously paid over rolling twelve-month periods, if paid before a specified date during 2026, some or all of such dividends may be extraordinary and require regulatory approval. 197 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements. Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability. ● Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Fair values are based on at least one significant unobservable input for the asset or liability. Determination of Fair Value The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below. Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2025. Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities. 198 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data for specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may also be impacted by company specific factors. If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of December 31, 2025, approximately 3 % of our total fixed maturities were Level 3 securities valued using internal pricing models. The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below. U.S. Government and Agencies/Non-U.S. Governments . Inputs include recently executed market transactions, interest rate yield curves, maturity dates, market price quotations and credit spreads relating to similar instruments. States and Political Subdivisions . Inputs include Municipal Securities Rulemaking Board reported trades, U.S. Treasury and other benchmark curves, material event notices, new issue data and obligor credit ratings. Corporate . Inputs include recently executed transactions, market price quotations, benchmark yields, issuer spreads and observations of equity and credit default swap curves related to the issuer. For private placement corporate securities valued through the matrix valuation approach inputs include the current Treasury curve and risk spreads based on sector, rating and average life of the issuance. RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations . Inputs include cash flows, priority of the tranche in the capital structure, expected time to maturity for the specific tranche, reinvestment period remaining and performance of the underlying collateral including prepayments, defaults, deferrals, loss severity of defaulted collateral and, for RMBS, prepayment speed assumptions. Other inputs include market indices and recently executed market transactions. Equity Securities Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the NAV, which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. 199 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Mortgage Loans Mortgage loans reported at fair value included those of a consolidated VIE for which the fair value option was elected. Fair values of commercial mortgage loans were primarily determined by discounting the expected cash flows at current treasury rates plus an applicable risk spread, which reflected credit quality and maturity of the loans. The risk spread was based on market clearing levels for loans with comparable credit quality, maturities and risk. These were reflected in Level 3. Mortgage loans valued using securitized pricing based on observable market data should be reflected in Level 2 of the fair value hierarchy. The consolidated VIE was deconsolidated during 2025. Derivatives The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses utilize the secured overnight financing rate (“SOFR”) curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3. Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the SOFR curve to value our positions. Counterparty credit risk is routinely monitored to ensure our adjustment for nonperformance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the nonperformance risk on these trades. Interest Rate Contracts. For non-cleared contracts, which include interest rate swaps and interest rate options, we use discounted cash flow valuation techniques to determine the fair value using observable swap curves as the inputs. These are reflected in Level 2. We have forward contracts for which we obtain prices from third party pricing vendors. These are reflected in Level 2. For centrally cleared contracts we use published prices from clearinghouses. These are reflected in Level 2. In addition, we have forward contracts that are valued using broker quotes. These are reflected in Level 3. Foreign Exchange Contracts. We use discounted cash flow valuation techniques that utilize observable swap curves and exchange rates as the inputs to determine the fair value of foreign currency swaps. These are reflected in Level 2. Currency forwards are valued using observable market inputs, including forward currency exchange rates. These are reflected in Level 2. In addition, we had a limited number of non-standard currency swaps that were valued using broker quotes. These were reflected within Level 3. Equity Contracts. We use an option pricing model using observable implied volatilities, dividend yields, index prices and swap curves as the inputs to determine the fair value of equity options. Certain total return swaps use an accrual method comparing both cash flows to determine fair value. These are reflected in Level 2. Certain equity option contracts are valued using broker quotes. These are reflected in Level 3. Credit Contracts. We use either the ISDA Credit Default Swap Standard discounted cash flow model that utilizes observable default probabilities and recovery rates as inputs to determine the fair value of credit default swaps. These are reflected in Level 2. In addition, we have total return swaps and a limited number of credit default swaps that are valued using broker quotes. These are reflected within Level 3. 200 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Other Investments Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, other loans of a consolidated VIE for which the fair value option was elected and certain redeemable and nonredeemable preferred stock. Invested assets of consolidated sponsored investment funds include equity securities, fixed maturities and derivative assets, for which fair values are determined as previously described, and are reflected in Level 1 and Level 2. The fair value of unconsolidated sponsored investment funds and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2. Other loans of a consolidated VIE for which the fair value option was elected are reflected in Level 3. The fair value of these loans is estimated using a discounted cash flow valuation model that utilizes standard assumption-setting methodology accepted by market participants in the industry. The assumptions are formed based on historical performance of the loans and utilizes market data inputs such as charge-off rates, prepayment rates, recovery rates and discount rates. Cash Equivalents Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2. Separate Account Assets Separate account assets include equity securities, debt securities, cash equivalents and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3. 201 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Market Risk Benefits MRBs are measured at fair value at the contract level on a recurring basis and are reflected in Level 3 as either an asset or a liability, depending on certain inputs at the reporting date. The key assumptions for calculating the fair value are market assumptions and policyholder behavior. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk. The assumption for our own nonperformance risk is based on current market credit spreads for debt-like instruments we have issued and are available in the market. Refer to Note 11, Market Risk Benefits, for further information on the determination of fair value measurement of MRBs. Investment and Universal Life Contracts Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse and mortality). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using models that incorporate a spread reflecting our own creditworthiness. The assumption for our own nonperformance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Funds Withheld Payable The funds withheld payable includes an embedded derivative that has been bifurcated from the host contract and is measured at fair value on a recurring basis, which is reflected in Level 3. The fair value is determined based on the change in the estimated fair value of the underlying funds withheld investments. The fair value of these assets is determined as previously described. Long-Term Debt Long-term debt reported at fair value included that of a consolidated VIE for which the fair value option was elected. The long-term debt was a secured credit facility that was primarily financing for commercial real estate loans. The fair value was estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. These were reflected in Level 2. The consolidated VIE was deconsolidated during 2025. Other Liabilities Derivative liabilities of consolidated sponsored investment funds are reported at fair value within other liabilities. Fair values of these derivatives are determined as previously described and are reflected in Level 1 and Level 2. 202 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis were as follows: December 31, 2025 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,867.6 $ — $ 1,515.2 $ 352.4 $ — Non-U.S. governments 517.7 — — 517.7 — States and political subdivisions 7,138.7 — — 7,070.3 68.4 Corporate 37,547.5 — 27.8 35,042.0 2,477.7 Residential mortgage-backed pass-through securities 3,805.1 — — 3,805.1 — Commercial mortgage-backed securities 5,371.6 — — 5,369.2 2.4 Collateralized debt obligations (1) 6,422.3 — — 6,422.3 — Other debt obligations 10,690.2 — — 8,934.5 1,755.7 Total fixed maturities, available-for-sale 73,360.7 — 1,543.0 67,513.5 4,304.2 Fixed maturities, trading 1,243.8 — 0.1 786.3 457.4 Equity securities 2,237.3 — 778.6 1,458.7 — Derivative assets (2) 1,224.5 — — 1,199.8 24.7 Other investments 1,112.0 106.4 332.8 505.6 167.2 Cash equivalents 3,236.1 — 183.7 3,052.4 — Market risk benefit asset (3) 197.1 — — — 197.1 Sub-total excluding separate account assets 82,611.5 106.4 2,838.2 74,516.3 5,150.6 Separate account assets 193,622.6 7,613.8 121,376.6 63,889.7 742.5 Total assets $ 276,234.1 $ 7,720.2 $ 124,214.8 $ 138,406.0 $ 5,893.1 Liabilities Investment and universal life contracts (4) $ ( 1,410.2 ) $ — $ — $ — $ ( 1,410.2 ) Market risk benefit liability (3) ( 66.9 ) — — — ( 66.9 ) Funds withheld payable embedded derivative (4) 2,633.4 — — — 2,633.4 Derivative liabilities (2) ( 552.1 ) — — ( 545.3 ) ( 6.8 ) Other liabilities ( 1.3 ) — — ( 1.3 ) — Total liabilities $ 602.9 $ — $ — $ ( 546.6 ) $ 1,149.5 Net assets $ 276,837.0 $ 7,720.2 $ 124,214.8 $ 137,859.4 $ 7,042.6 203 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) December 31, 2024 Assets/ Amount (liabilities) measured at Fair value hierarchy level measured at net asset fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,637.9 $ — $ 1,231.9 $ 406.0 $ — Non-U.S. governments 495.7 — — 495.7 — States and political subdivisions 6,076.5 — — 6,009.7 66.8 Corporate 35,702.6 — 29.1 33,323.1 2,350.4 Residential mortgage-backed pass-through securities 3,674.2 — — 3,674.2 — Commercial mortgage-backed securities 5,188.0 — — 5,185.3 2.7 Collateralized debt obligations (1) 6,560.4 — — 6,560.4 — Other debt obligations 8,915.7 — — 7,437.4 1,478.3 Total fixed maturities, available-for-sale 68,251.0 — 1,261.0 63,091.8 3,898.2 Fixed maturities, trading 1,023.3 — — 460.7 562.6 Equity securities 2,295.0 — 990.2 1,304.8 — Mortgage loans 140.6 — — — 140.6 Derivative assets (2) 648.2 — — 626.8 21.4 Other investments 905.6 106.7 262.2 405.5 131.2 Cash equivalents 2,950.5 — 271.6 2,678.9 — Market risk benefit asset (3) 199.5 — — — 199.5 Sub-total excluding separate account assets 76,413.7 106.7 2,785.0 68,568.5 4,953.5 Separate account assets 173,327.1 7,573.6 112,920.3 52,106.5 726.7 Total assets $ 249,740.8 $ 7,680.3 $ 115,705.3 $ 120,675.0 $ 5,680.2 Liabilities Investment and universal life contracts (4) $ ( 578.4 ) $ — $ — $ — $ ( 578.4 ) Market risk benefit liability (3) ( 62.1 ) — — — ( 62.1 ) Funds withheld payable embedded derivative (4) 3,014.5 — — — 3,014.5 Long-term debt ( 21.8 ) — — ( 21.8 ) — Derivative liabilities (2) ( 506.2 ) — — ( 498.3 ) ( 7.9 ) Other liabilities ( 5.2 ) — ( 5.2 ) — — Total liabilities $ 1,840.8 $ — $ ( 5.2 ) $ ( 520.1 ) $ 2,366.1 Net assets $ 251,581.6 $ 7,680.3 $ 115,700.1 $ 120,154.9 $ 8,046.3 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 5, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Refer to Note 11, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $ 2.9 million and $ 3.1 million as of December 31, 2025 and December 31, 2024, respectively. Separate account assets using the NAV practical expedient consist of certain funds with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. 204 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Changes in Level 3 Fair Value Measurements The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows: For the year ended December 31, 2025 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2025 (2) income (3) (4) Level 3 Level 3 2025 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 66.8 $ — $ 3.4 $ ( 1.8 ) $ — $ — $ 68.4 Corporate 2,350.4 ( 5.6 ) ( 24.9 ) 157.8 — — 2,477.7 Commercial mortgage-backed securities 2.7 — 0.1 ( 0.4 ) — — 2.4 Other debt obligations 1,478.3 0.1 17.3 256.5 122.5 ( 119.0 ) 1,755.7 Total fixed maturities, available-for-sale 3,898.2 ( 5.5 ) ( 4.1 ) 412.1 122.5 ( 119.0 ) 4,304.2 Fixed maturities, trading 562.6 ( 18.1 ) — ( 82.3 ) — ( 4.8 ) 457.4 Mortgage loans 140.6 — — ( 140.6 ) — — — Other investments 131.2 ( 5.1 ) — 41.1 — — 167.2 Separate account assets (1) 726.7 23.1 — ( 7.3 ) — — 742.5 Liabilities Investment and universal life contracts ( 578.4 ) ( 258.7 ) — ( 573.1 ) — — ( 1,410.2 ) Funds withheld payable embedded derivative 3,014.5 ( 381.1 ) — — — — 2,633.4 Derivatives Net derivative assets (liabilities) 13.5 4.3 — 0.1 — — 17.9 For the year ended December 31, 2024 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2024 (2) income (3) (4) Level 3 Level 3 2024 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 69.9 $ — $ ( 1.5 ) $ 0.8 $ 15.5 $ ( 17.9 ) $ 66.8 Corporate 2,305.9 ( 28.2 ) ( 25.1 ) 38.9 58.9 — 2,350.4 Commercial mortgage-backed securities 3.0 — — ( 0.3 ) — — 2.7 Collateralized debt obligations 75.4 — ( 0.7 ) ( 71.7 ) — ( 3.0 ) — Other debt obligations 1,182.6 0.2 ( 0.8 ) 267.7 140.2 ( 111.6 ) 1,478.3 Total fixed maturities, available-for-sale 3,636.8 ( 28.0 ) ( 28.1 ) 235.4 214.6 ( 132.5 ) 3,898.2 Fixed maturities, trading 415.8 ( 0.7 ) — 147.5 — — 562.6 Mortgage loans — — — 140.6 — — 140.6 Other investments 165.1 ( 22.8 ) — ( 11.1 ) — — 131.2 Separate account assets (1) 752.8 ( 17.5 ) — ( 8.6 ) — — 726.7 Liabilities Investment and universal life contracts ( 115.5 ) ( 166.3 ) — ( 296.6 ) — — ( 578.4 ) Funds withheld payable embedded derivative 2,567.1 447.4 — — — — 3,014.5 Derivatives Net derivative assets (liabilities) 5.5 7.5 — 0.8 0.1 ( 0.4 ) 13.5 205 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) For the year ended December 31, 2023 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included Included in issuances balance as of in net other and Transfers Transfers as of January 1, income comprehensive settlements into out of December 31, 2023 (2) income (3) (4) Level 3 Level 3 2023 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 70.9 $ — $ 0.7 $ ( 1.7 ) $ — $ — $ 69.9 Corporate 1,568.3 ( 4.5 ) 13.3 593.6 212.4 ( 77.2 ) 2,305.9 Commercial mortgage-backed securities 3.4 — — ( 0.4 ) — — 3.0 Collateralized debt obligations 56.2 — 1.9 165.8 — ( 148.5 ) 75.4 Other debt obligations 467.8 1.3 1.2 537.0 239.5 ( 64.2 ) 1,182.6 Total fixed maturities, available-for-sale 2,166.6 ( 3.2 ) 17.1 1,294.3 451.9 ( 289.9 ) 3,636.8 Fixed maturities, trading 134.0 2.4 — 279.4 — — 415.8 Other investments 1.9 ( 5.7 ) — 168.9 — — 165.1 Separate account assets (1) 1,034.9 ( 8.7 ) — ( 273.4 ) — — 752.8 Liabilities Investment and universal life contracts ( 46.4 ) ( 37.7 ) — ( 31.4 ) — — ( 115.5 ) Funds withheld payable embedded derivative 3,652.8 ( 1,085.7 ) — — — — 2,567.1 Derivatives Net derivative assets (liabilities) ( 3.4 ) 3.9 — 4.9 0.1 — 5.5 (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal Asset Management separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were : For the year ended December 31, 2025 2024 2023 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 31.5 $ ( 39.1 ) $ 0.3 Other debt obligations — 0.2 1.9 Total fixed maturities, available-for-sale 31.5 ( 38.9 ) 2.2 Fixed maturities, trading ( 3.6 ) ( 6.2 ) 2.0 Other investments 6.0 ( 10.0 ) ( 5.2 ) Separate account assets 37.8 ( 9.8 ) ( 80.3 ) Liabilities Investment and universal life contracts ( 253.4 ) ( 155.8 ) ( 29.2 ) Funds withheld payable embedded derivative ( 381.1 ) 447.4 ( 1,085.7 ) Derivatives Net derivative assets (liabilities) 3.3 7.8 7.5 206 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) (3) Changes in unrealized gains (losses) included in OCI, including foreign currency translation adjustments related to Principal Asset Management, relating to positions still held were : For the year ended December 31, 2025 2024 2023 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 3.5 $ ( 1.4 ) $ ( 4.1 ) Corporate ( 24.8 ) ( 25.7 ) ( 38.9 ) Commercial mortgage-backed securities 0.1 — — Collateralized debt obligations — 0.1 0.7 Other debt obligations 19.8 ( 0.5 ) ( 29.8 ) Total fixed maturities, available-for-sale ( 1.4 ) ( 27.5 ) ( 72.1 ) (4) Gross purchases, sales, issuances and settlements were: For the year ended December 31, 2025 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 1.8 ) $ ( 1.8 ) Corporate 627.4 ( 236.4 ) — ( 233.2 ) 157.8 Commercial mortgage-backed securities — — — ( 0.4 ) ( 0.4 ) Other debt obligations 703.6 ( 177.7 ) — ( 269.4 ) 256.5 Total fixed maturities, available-for-sale 1,331.0 ( 414.1 ) — ( 504.8 ) 412.1 Fixed maturities, trading 293.3 ( 235.1 ) — ( 140.5 ) ( 82.3 ) Mortgage loans — — — ( 140.6 ) ( 140.6 ) Other investments 203.9 ( 1.5 ) — ( 161.3 ) 41.1 Separate account assets (5) — ( 49.9 ) — 42.6 ( 7.3 ) Liabilities Investment and universal life contracts — — ( 625.4 ) 52.3 ( 573.1 ) Derivatives Net derivative assets (liabilities) ( 1.9 ) 2.0 — — 0.1 207 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) For the year ended December 31, 2024 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 2.5 $ — $ — $ ( 1.7 ) $ 0.8 Corporate 659.3 ( 322.2 ) — ( 298.2 ) 38.9 Commercial mortgage-backed securities — — — ( 0.3 ) ( 0.3 ) Collateralized debt obligations 35.1 ( 90.0 ) — ( 16.8 ) ( 71.7 ) Other debt obligations 601.3 ( 101.4 ) — ( 232.2 ) 267.7 Total fixed maturities, available-for-sale 1,298.2 ( 513.6 ) — ( 549.2 ) 235.4 Fixed maturities, trading 422.9 ( 166.9 ) — ( 108.5 ) 147.5 Mortgage loans 140.6 — — — 140.6 Other investments 182.3 — — ( 193.4 ) ( 11.1 ) Separate account assets (5) — ( 30.3 ) ( 60.0 ) 81.7 ( 8.6 ) Liabilities Investment and universal life contracts — — ( 364.4 ) 67.8 ( 296.6 ) Derivatives Net derivative assets (liabilities) 0.4 0.4 — — 0.8 For the year ended December 31, 2023 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 1.7 ) $ ( 1.7 ) Corporate 815.2 ( 27.7 ) — ( 193.9 ) 593.6 Commercial mortgage-backed securities — — — ( 0.4 ) ( 0.4 ) Collateralized debt obligations 167.0 — — ( 1.2 ) 165.8 Other debt obligations 563.3 — — ( 26.3 ) 537.0 Total fixed maturities, available-for-sale 1,545.5 ( 27.7 ) — ( 223.5 ) 1,294.3 Fixed maturities, trading 439.3 ( 145.2 ) — ( 14.7 ) 279.4 Other investments 194.2 — — ( 25.3 ) 168.9 Separate account assets (5) — ( 286.3 ) ( 109.1 ) 122.0 ( 273.4 ) Liabilities Investment and universal life contracts — — ( 69.9 ) 38.5 ( 31.4 ) Derivatives Net derivative assets (liabilities) 0.8 4.1 — — 4.9 (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. 208 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: For the year ended December 31, 2025 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Other debt obligations $ — $ 122.5 $ — $ 119.0 Total fixed maturities, available-for-sale — 122.5 — 119.0 Fixed maturities, trading — — — 4.8 For the year ended December 31, 2024 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ 15.5 $ — $ 17.9 Corporate — 58.9 — — Collateralized debt obligations — — — 3.0 Other debt obligations — 140.2 — 111.6 Total fixed maturities, available-for-sale — 214.6 — 132.5 Derivatives Net derivative assets (liabilities) — 0.1 — 0.4 For the year ended December 31, 2023 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ 212.4 $ — $ 77.2 Collateralized debt obligations — — — 148.5 Other debt obligations — 239.5 — 64.2 Total fixed maturities, available-for-sale — 451.9 — 289.9 Derivatives Net derivative assets (liabilities) — 0.1 — — Assets transferred into Level 3 during 2025, 2024 and 2023, primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations. Assets transferred out of Level 3 during 2025, 2024 and 2023, included those assets for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. 209 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes. The MRB asset and liability are excluded from the table. Refer to Note 11, Market Risk Benefits, for information on the unobservable inputs used for fair value measurement of MRBs. The funds withheld payable embedded derivative is excluded from the table as the determination of its fair value incorporates the fair value of the invested assets supporting the reinsurance agreement. The commercial mortgage loans of a consolidated VIE are excluded from the table as the determination of fair value was based on transaction price due to proximity of purchase to year-end, and thus no inputs to be provided. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary. December 31, 2025 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 2,017.3 Discounted cash flow Discount rate (1) 2.7 %- 13.1 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Illiquidity premium 30 basis points (“bps”)- 771 bps 146 bps Comparability adjustment ( 120 ) bps- 3,462 bps 122 bps Other debt obligations 1,745.4 Discounted cash flow Discount rate (1) 3.4 %- 8.6 % 4.2 % Illiquidity premium ( 83 ) bps- 415 bps 179 bps Comparability adjustment ( 10 ) bps- 285 bps 66 bps Fixed maturities, trading 257.6 Discounted cash flow Discount rate (1) 8.5 %- 13.0 % 9.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Comparability adjustment ( 88 ) bps- 2,047 bps 114 bps Other investments 167.1 Discounted cash flow Discount rate (1) 12.0 %- 13.5 % 12.2 % Probability of default 6.0 %- 10.0 % 8.0 % Potential loss severity 87.0 %- 100.0 % 92.9 % Separate account assets 742.5 Discounted cash flow - real estate Discount rate (1) 6.8 %- 9.3 % 7.3 % Terminal capitalization rate 5.5 %- 8.0 % 6.0 % Average market rent growth rate 2.0 %- 3.3 % 2.7 % Discounted cash flow - real estate debt Loan to value 47.2 %- 69.3 % 52.7 % Market interest rate 5.3 %- 6.4 % 5.8 % Liabilities Investment and universal life contracts (4) ( 1,410.2 ) Discounted cash flow Long duration interest rate 3.5 %- 4.8 % (2) 4.8 % Long-term equity market volatility 16.1 %- 33.4 % 21.8 % Nonperformance risk 0.5 %- 1.1 % 0.9 % Lapse rate 0.0 %- 55.0 % 8.0 % Mortality rate See note (3) 210 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) December 31, 2024 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 1,817.8 Discounted cash flow Discount rate (1) 2.1 %- 12.7 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 1.1 x- 1.7 x 1.3 x Illiquidity premium 30 bps- 791 bps 142 bps Comparability adjustment ( 42 ) bps- 2,947 bps 149 bps Other debt obligations 1,343.1 Discounted cash flow Discount rate (1) 4.9 %- 7.7 % 5.4 % Illiquidity premium ( 83 ) bps- 260 bps 120 bps Comparability adjustment ( 19 ) bps- 415 bps 128 bps Fixed maturities, trading 289.6 Discounted cash flow Discount rate (1) 9.5 %- 13.0 % 9.9 % Earnings before interest, taxes, depreciation and amortization multiple 1.1 x 1.1 x Comparability adjustment ( 32 ) bps- 2,947 bps 152 bps Other investments 129.0 Discounted cash flow Discount rate (1) 11.5 %- 13.5 % 12.4 % Probability of default 6.0 %- 10.0 % 8.1 % Potential loss severity 87.0 %- 100.0 % 92.0 % Separate account assets 726.7 Discounted cash flow - real estate Discount rate (1) 7.0 %- 11.0 % 7.2 % Terminal capitalization rate 5.5 %- 9.5 % 6.0 % Average market rent growth rate 2.0 %- 4.5 % 2.7 % Discounted cash flow - real estate debt Loan to value 46.4 %- 69.5 % 59.2 % Market interest rate 4.9 %- 7.2 % 6.1 % Liabilities Investment and universal life contracts (4) ( 578.4 ) Discounted cash flow Long duration interest rate 3.0 %- 4.9 % (2) 4.8 % Long-term equity market volatility 14.5 %- 49.3 % 21.4 % Nonperformance risk 0.4 %- 1.1 % 0.8 % Lapse rate 0.0 %- 55.0 % 8.5 % Mortality rate See note (3) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable. (2) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. The use of a higher or lower discount rate would have caused the fair value of the assets to significantly decrease or increase, respectively. Additionally, we may adjust the base discount rate or the modeled price by applying an illiquidity premium given the highly structured nature of certain assets. The use of a higher or lower illiquidity premium would have caused significant decreases or increases, respectively, in the fair value of the asset. Embedded derivatives within our investment and universal life contracts liability can be in either an asset or liability position, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. The use of a higher or lower market volatility would have caused significant decreases or increases, respectively, in the fair value of embedded derivatives in investment and universal life contracts. Long duration interest rates are used as the mean return when projecting the growth in the value of associated account value and impact the discount rate used in the discounted future cash flows valuation. The use of higher or lower risk-free rates would have caused the fair value of the embedded derivative to significantly increase or decrease, respectively. The use of a higher or lower rate for our own credit risks, which impact the rates used to discount future cash flows, would have significantly increased or decreased, respectively, the fair value of the embedded derivative. The use of a lower or higher mortality rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. The use of a lower or higher overall lapse rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. 211 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis No significant assets and liabilities were measured at fair value on a nonrecurring basis for the years ended December 31, 2025, 2024 and 2023. Fair Value Option We elected fair value accounting for: ● Certain other loans of a consolidated VIE that were subject to amortized cost accounting and a valuation allowance so that credit losses are recognized within the changes in fair value in the consolidated statements of operations. ● Certain mortgage loans and long-term debt of a consolidated VIE to provide alignment between the consolidated VIE’s financial reporting and the calculation of net asset value per share used to determine the prices at which investors could purchase and redeem shares of the entity’s stock. The consolidated VIE was deconsolidated during 2025. The following table presents information regarding the assets and liabilities for which the fair value option was elected. December 31, 2025 December 31, 2024 (in millions) Mortgage loans of consolidated VIE (1) Fair value (1) $ — $ 140.6 Aggregate contractual principal — 140.6 Other loans of consolidated VIE (2) Fair value (2) $ 167.1 $ 129.0 Aggregate contractual principal 175.8 139.9 Long-term debt of consolidated VIE (1) Fair value (1) $ — $ 21.8 Aggregate contractual principal — 21.8 (1) Assets and liabilities from consolidated VIE, which are reported as mortgage loans and long-term debt on the consolidated statements of financial position, originated in December 2024 with no change in fair value recognized due to timing of origination. The consolidated VIE was deconsolidated during first quarter 2025 with no change in fair value recognized due to timing of the deconsolidation and an immaterial amount of interest expense recognized on the long-term debt. (2) Reported with other investments on the consolidated statements of financial position. See Note 4, Investments, for additional information relating to other loans more than 90 days past due or in non-accrual status. The following table presents information regarding the consolidated statements of operations impact of assets for which the fair value option was elected. For the year ended December 31, 2025 2024 2023 (in millions) Other loans of consolidated VIE Change in fair value pre-tax loss - instrument specific credit risk $ ( 6.1 ) $ ( 22.8 ) $ ( 5.6 ) Change in fair value pre-tax loss (1) ( 6.1 ) ( 22.8 ) ( 5.6 ) Interest income (2) 19.7 31.0 8.1 (1) Reported in net realized capital gains (losses) on the consolidated statements of operations. (2) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rate of the loans. 212 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 18. Fair Value Measurements – (continued) Financial Instruments Not Reported at Fair Value The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis but required to be disclosed at fair value were as follows: December 31, 2025 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 21,008.3 $ 19,800.9 $ — $ — $ 19,800.9 Policy loans 866.7 906.0 — — 906.0 Other investments 265.7 255.4 — 77.6 177.8 Cash and cash equivalents 1,194.9 1,194.9 1,181.0 13.9 — Reinsurance deposit receivable 4,076.2 3,825.7 — — 3,825.7 Cash collateral receivable 5.4 5.4 5.4 — — Investment contracts ( 34,139.0 ) ( 33,655.5 ) — ( 8,200.1 ) ( 25,455.4 ) Short-term debt ( 27.7 ) ( 27.7 ) — ( 27.7 ) — Long-term debt ( 3,926.3 ) ( 3,833.5 ) — ( 3,830.9 ) ( 2.6 ) Separate account liabilities ( 178,620.2 ) ( 177,621.6 ) — — ( 177,621.6 ) Bank deposits (1) ( 423.8 ) ( 427.8 ) — ( 427.8 ) — Cash collateral payable ( 857.6 ) ( 857.6 ) ( 857.6 ) — — December 31, 2024 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 20,343.6 $ 18,466.5 $ — $ — $ 18,466.5 Policy loans 867.5 879.3 — — 879.3 Other investments 294.9 292.4 — 127.5 164.9 Cash and cash equivalents 1,261.4 1,261.4 1,238.5 22.9 — Reinsurance deposit receivable 4,897.5 4,401.9 — — 4,401.9 Cash collateral receivable 3.0 3.0 3.0 — — Investment contracts ( 34,140.3 ) ( 32,922.2 ) — ( 8,306.5 ) ( 24,615.7 ) Short-term debt ( 152.7 ) ( 152.7 ) — ( 152.7 ) — Long-term debt ( 3,933.5 ) ( 3,715.7 ) — ( 3,713.2 ) ( 2.5 ) Separate account liabilities ( 157,939.3 ) ( 157,010.7 ) — — ( 157,010.7 ) Bank deposits (1) ( 440.4 ) ( 442.1 ) — ( 442.1 ) — Cash collateral payable ( 428.9 ) ( 428.9 ) ( 428.9 ) — — (1) Excludes deposit liabilities without defined or contractual maturities. 213 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 19. Statutory Insurance Financial Information Principal Life, the largest indirect subsidiary of PFG, prepares statutory financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Division of the Department of Insurance & Financial Services of the State of Iowa (the “Iowa Insurance Division”). The Iowa Insurance Division recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company to determine its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual has been adopted as a component of prescribed practices by the State of Iowa. The Commissioner has the right to permit other specific practices that deviate from prescribed practices. Statutory accounting practices differ from U.S. GAAP primarily due to charging policy acquisition costs to expense as incurred, establishing reserves using different actuarial assumptions, valuing investments on a different basis and not admitting certain assets, including certain net deferred income tax assets. Principal Life cedes certain term, ULSG and Closed Block life insurance statutory reserves to its affiliated reinsurance subsidiaries on a funds withheld coinsurance basis. The reserves are secured by cash, invested assets and financing provided by highly rated third parties. As of December 31, 2025 and 2024, Principal Life’s affiliated reinsurance subsidiaries assumed statutory reserves of $ 19,424.2 million and $ 19,013.3 million from Principal Life, respectively. In the states of Vermont and Delaware, Principal Life’s affiliated reinsurance subsidiaries had permitted practices allowing for the admissibility of certain assets backing these reserves. As of December 31, 2025 and 2024, assets admitted under these practices totaled $ 4,321.7 million and $ 4,254.5 million, respectively. In addition, as of December 31, 2025 and 2024, one of Principal Life’s affiliated reinsurance subsidiaries in Vermont ceded $ 11,245.3 million and $ 10,847.6 million, respectively, of the ULSG reserves it assumed from Principal Life to an unaffiliated reinsurance company. Principal Life cedes certain pension risk transfer and term life reserves to an affiliated Bermuda reinsurer. The reinsurer has permitted practices under Bermuda regulatory reporting allowing for the valuation of certain assets and liabilities to address mismatches in interest rate discounting used under U.S. GAAP. These permitted practices were approved by the Bermuda Monetary Authority (“BMA”) for 2025, 2024 and 2023. Use of these permitted practices resulted in a $( 5.4 ) million, $( 14.5 ) million and $ 22.2 million increase (decrease) to the reinsurer’s regulatory capital and surplus as of December 31, 2025, 2024 and 2023, respectively, and a $( 73.0 ) million $ 104.9 million and $( 190.4 ) million increase (decrease) to the reinsurer’s net income for the years ended December 31, 2025, 2024 and 2023, respectively. Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be determined based on the various risk factors related to it. As of December 31, 2025, Principal Life met the minimum RBC requirements. Statutory net income (loss) and statutory capital and surplus of Principal Life were as follows: As of or for the year ended December 31, 2025 2024 2023 (in millions) Statutory net income $ 1,128.8 $ 1,093.6 $ 1,285.0 Statutory capital and surplus 4,802.3 4,695.5 4,753.4 214 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Asset Management and Benefits and Protection. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities (including RILAs), pension risk transfer, investment only and our exited retail fixed annuities business. The Principal Asset Management segment provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Investment Management, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to serve a breadth of client investment objectives; and International Pension, which provides long-term savings and retirement solutions through pension accumulation and income annuities in Asia and Latin America. The Benefits and Protection segment focuses on solutions primarily for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc. (“PSI”), our retail broker-dealer and registered investment advisor (“RIA”); and our exited group medical and long-term care insurance businesses are reported in this segment. Our chief operating decision maker (“CODM”) is our chief executive officer. Our CODM and management team, use segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. In addition, the financial information provided to our CODM is used in making decisions about the allocation of resources and determining annual incentive compensation paid to our employees. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. 215 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings: ● Periodic settlements and accruals on derivative instruments not designated as hedging instruments, ● Certain market value adjustments of derivatives and embedded derivatives and ● Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives. Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments, ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments, ● Certain variable annuity fees, ● Market value adjustments of market risk benefits, ● Related changes in the amortization pattern of actuarial balances, ● Certain hedge accounting market value expense adjustments and ● Net realized capital gains (losses) distributed. Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses as well as amounts associated with other exited or divested businesses. Pre-tax income (loss) from exited business includes the change in fair value of the funds withheld embedded derivative, net realized capital gains (losses) on funds withheld assets, amortization of reinsurance gain (loss) and other impacts of exited business. Other impacts of exited business primarily includes change in reserves and DAC amortization. Other impacts of exited business in 2025 also include the impairment of assets associated with an exited business. Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding: ● Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain variable annuity fees, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments and ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments. 216 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) ● Pre-tax revenues from exited business, ● Pre-tax other revenue adjustments and income taxes of equity method investments and ● Pre-tax other revenue adjustments management believes are not indicative of overall operating trends. Segment expenses reflect consolidated U.S. GAAP total expenses excluding: ● Pre-tax expenses associated with net realized capital gains (losses), ● Periodic settlements and accruals on derivatives used to hedge MRBs, ● Pre-tax expenses from exited business and ● Pre-tax expense adjustments management believes are not indicative of overall operating trends. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and OPEB costs. The Corporate segment reflects the non-service components of pension and OPEB costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. The following tables summarize select financial information by segment and reconcile segment totals to those reported in the consolidated financial statements. Segment Assets December 31, 2025 December 31, 2024 (in millions) Retirement and Income Solutions $ 238,141.5 $ 222,967.0 Principal Asset Management 52,267.1 43,029.4 Benefits and Protection 48,165.5 46,006.7 Corporate 2,802.4 1,660.5 Total assets per consolidated statements of financial position $ 341,376.5 $ 313,663.6 217 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) Segment Operating Revenues For the year ended December 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 4,806.7 $ 1,848.2 $ 4,274.1 $ 269.3 $ 11,198.3 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 70.3 ) — 28.8 — ( 41.5 ) Net investment income included in operating revenues 3,409.3 437.2 653.3 193.3 4,693.1 Operating revenues from equity method investments — 209.6 — ( 0.4 ) 209.2 Inter-segment operating revenues 36.2 315.9 8.9 325.9 686.9 Eliminations of inter-segment operating revenues — — — ( 686.9 ) ( 686.9 ) Segment operating revenues (3) $ 8,181.9 $ 2,810.9 $ 4,965.1 $ 101.2 16,059.1 Net realized capital gains, net of related revenue adjustments 41.0 Revenues from exited business (4) ( 364.4 ) Adjustments related to equity method investments ( 69.4 ) Market risk benefit derivative settlements ( 40.8 ) Total revenues per consolidated statements of operations $ 15,625.5 For the year ended December 31, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 4,957.8 $ 1,824.5 $ 4,142.5 $ 240.9 $ 11,165.7 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 74.7 ) — 25.1 — ( 49.6 ) Net investment income included in operating revenues 3,040.5 426.7 613.6 200.4 4,281.2 Operating revenues from equity method investments — 235.4 — ( 0.4 ) 235.0 Inter-segment operating revenues 52.5 303.8 7.8 285.5 649.6 Eliminations of inter-segment operating revenues — — — ( 649.6 ) ( 649.6 ) Segment operating revenues (3) $ 7,976.1 $ 2,790.4 $ 4,789.0 $ 76.8 15,632.3 Net realized capital gains, net of related revenue adjustments 102.7 Revenues from exited business (4) 513.3 Adjustments related to equity method investments ( 74.8 ) Market risk benefit derivative settlements ( 45.8 ) Total revenues per consolidated statements of operations $ 16,127.7 218 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) For the year ended December 31, 2023 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 4,647.5 $ 1,775.5 $ 3,938.1 $ 204.7 $ 10,565.8 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 80.6 ) — 12.7 — ( 67.9 ) Net investment income included in operating revenues 2,648.1 492.7 584.4 220.8 3,946.0 Operating revenues from equity method investments — 216.3 — — 216.3 Inter-segment operating revenues 35.2 297.8 16.1 202.6 551.7 Eliminations of inter-segment operating revenues — — — ( 551.7 ) ( 551.7 ) Segment operating revenues (3) $ 7,250.2 $ 2,782.3 $ 4,551.3 $ 76.4 14,660.2 Net realized capital gains, net of related revenue adjustments 57.9 Revenues from exited business (4) ( 927.5 ) Adjustments related to equity method investments ( 78.9 ) Market risk benefit derivative settlements ( 45.9 ) Total revenues per consolidated statements of operations $ 13,665.8 (1) Includes amounts reported in premiums and other considerations as well as fees and other revenues on the consolidated statement of operations. (2) Includes certain revenues associated with our exited U.S. retail fixed annuity and ULSG businesses and fees associated with net realized capital gains (losses) that are not included in segment operating revenue. (3) See Note 21, Revenues from Contracts with Customers, for additional detail relating to segment operating revenues. (4) Revenues from exited business included: For the year ended December 31, 2025 2024 2023 (in millions) Change in fair value of funds withheld embedded derivative $ ( 381.1 ) $ 447.4 $ ( 1,085.7 ) Net realized capital gains on funds withheld assets 43.2 87.7 165.0 Amortization of reinsurance gain 2.4 3.3 5.9 Other impacts of exited business ( 28.9 ) ( 25.1 ) ( 12.7 ) Total revenues from exited business $ ( 364.4 ) $ 513.3 $ ( 927.5 ) 219 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) Segment Expenses The expense categories within total segment expenses included: For the year ended December 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 5,251.9 $ 297.7 $ 2,807.9 $ 20.9 Liability for future policy benefits remeasurement (gain) loss ( 17.9 ) ( 0.4 ) 67.8 — Market risk benefit remeasurement loss 3.8 — — — Dividends to policyholders 0.2 — 91.5 — Commission expense 293.2 200.3 554.0 106.3 Capitalization of deferred acquisition costs and contract costs ( 166.7 ) ( 37.2 ) ( 308.9 ) — Amortization of deferred acquisition costs and contract costs 86.5 32.4 256.8 — Depreciation and amortization 74.2 56.8 17.2 16.2 Interest expense on corporate debt — 1.5 — 175.8 Compensation and other 1,470.5 1,313.1 955.6 170.8 Total operating expenses 1,757.7 1,566.9 1,474.7 469.1 Total segment expenses $ 6,995.7 $ 1,864.2 $ 4,441.9 $ 490.0 $ 13,791.8 Net realized capital losses expense adjustments 191.0 Market risk benefit derivative settlements ( 40.8 ) Expenses from exited business (1) 267.5 Total expenses per consolidated statements of operations $ 14,209.5 For the year ended December 31, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 5,147.7 $ 362.2 $ 2,638.4 $ 5.7 Liability for future policy benefits remeasurement (gain) loss ( 4.9 ) 1.0 154.5 — Market risk benefit remeasurement loss 32.2 — — — Dividends to policyholders 0.2 — 99.7 — Commission expense 268.6 189.7 537.4 80.2 Capitalization of deferred acquisition costs and contract costs ( 143.2 ) ( 31.2 ) ( 316.2 ) — Amortization of deferred acquisition costs and contract costs 80.4 32.6 253.0 — Depreciation and amortization 80.5 66.4 21.0 18.8 Interest expense on corporate debt — 3.3 — 166.9 Compensation and other 1,458.9 1,290.8 938.0 176.4 Total operating expenses 1,745.2 1,551.6 1,433.2 442.3 Total segment expenses $ 6,920.4 $ 1,914.8 $ 4,325.8 $ 448.0 $ 13,609.0 Net realized capital losses expense adjustments 245.0 Market risk benefit derivative settlements ( 45.8 ) Expenses from exited business (1) 429.9 Total expenses per consolidated statements of operations $ 14,238.1 220 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) For the year ended December 31, 2023 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 4,624.0 $ 422.9 $ 2,576.3 $ 9.4 Liability for future policy benefits remeasurement (gain) loss ( 68.0 ) 0.9 16.0 — Market risk benefit remeasurement loss 3.7 — — — Dividends to policyholders 0.2 — 89.0 — Commission expense 201.4 178.0 496.7 67.2 Capitalization of deferred acquisition costs and contract costs ( 93.7 ) ( 28.1 ) ( 307.5 ) — Amortization of deferred acquisition costs and contract costs 78.6 31.8 247.6 — Depreciation and amortization 85.3 76.0 23.9 17.7 Interest expense on corporate debt — 3.7 — 171.6 Compensation and other 1,367.3 1,272.8 871.7 187.7 Total operating expenses 1,638.9 1,534.2 1,332.4 444.2 Total segment expenses $ 6,198.8 $ 1,958.0 $ 4,013.7 $ 453.6 $ 12,624.1 Net realized capital losses expense adjustments 146.5 Market risk benefit derivative settlements ( 45.9 ) Expenses from exited business (1) 202.3 Total expenses per consolidated statements of operations $ 12,927.0 (1) Expenses from exited business included: For the year ended December 31, 2025 2024 2023 (in millions) Amortization of reinsurance loss $ 86.5 $ 592.9 $ 74.6 Other impacts of exited business 181.0 ( 163.0 ) 127.7 Total expenses from exited business $ 267.5 $ 429.9 $ 202.3 221 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) Segment Pre-Tax Operating Earnings For the year ended December 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 1,185.6 $ 930.2 $ 523.2 $ ( 381.2 ) $ 2,257.8 Pre-tax net realized capital losses, as adjusted (1) ( 150.0 ) Pre-tax loss from exited business (2) ( 631.9 ) Adjustments related to equity method investments and noncontrolling interest ( 59.9 ) Total income before income taxes per consolidated statements of operations $ 1,416.0 For the year ended December 31, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 1,056.2 $ 861.2 $ 463.2 $ ( 375.6 ) $ 2,005.0 Pre-tax net realized capital losses, as adjusted (1) ( 142.3 ) Pre-tax income from exited business (2) 83.4 Adjustments related to equity method investments and noncontrolling interest ( 56.5 ) Total income before income taxes per consolidated statements of operations $ 1,889.6 For the year ended December 31, 2023 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 1,051.4 $ 817.7 $ 537.6 $ ( 396.8 ) $ 2,009.9 Pre-tax net realized capital losses, as adjusted (1) ( 88.6 ) Pre-tax loss from exited business (2) ( 1,129.8 ) Adjustments related to equity method investments and noncontrolling interest ( 52.7 ) Total income before income taxes per consolidated statements of operations $ 738.8 222 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) (1) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the year ended December 31, 2025 2024 2023 (in millions) Net realized capital gains (losses) $ 27.7 $ ( 27.3 ) $ ( 72.2 ) Derivative and hedging-related revenue adjustments ( 101.4 ) 46.0 23.3 Market value adjustments to fee revenues ( 0.1 ) 0.1 1.3 Certain variable annuity fees 68.0 71.3 73.3 Equity method investments 5.3 ( 17.3 ) 8.8 Sponsored investment funds and other adjustments 41.5 29.9 23.4 Net realized capital gains, net of related revenue adjustments 41.0 102.7 57.9 Amortization of actuarial balances ( 14.5 ) ( 1.8 ) ( 0.2 ) Capital gains distributed ( 54.0 ) ( 171.1 ) ( 78.5 ) Derivative and hedging-related expense adjustments 1.6 ( 3.5 ) 1.8 Market value adjustments of market risk benefits ( 100.1 ) ( 43.9 ) ( 71.3 ) Market value adjustments of embedded derivatives ( 24.0 ) ( 24.7 ) 1.7 Net realized capital losses, net of related expense adjustments ( 191.0 ) ( 245.0 ) ( 146.5 ) Pre-tax net realized capital losses, as adjusted (a) $ ( 150.0 ) $ ( 142.3 ) $ ( 88.6 ) (a) As adjusted before noncontrolling interest capital gains (losses). (2) Pre-tax income (loss) from exited business included: For the year ended December 31, 2025 2024 2023 (in millions) Change in fair value of funds withheld embedded derivative $ ( 381.1 ) $ 447.4 $ ( 1,085.7 ) Net realized capital gains on funds withheld assets 43.2 87.7 165.0 Amortization of reinsurance loss ( 84.1 ) ( 589.6 ) ( 68.7 ) Other impacts of exited business ( 209.9 ) 137.9 ( 140.4 ) Total pre-tax income (loss) from exited business $ ( 631.9 ) $ 83.4 $ ( 1,129.8 ) 223 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 20. Segment Information – (continued) Income Tax Expense For the year ended December 31, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment income tax expense (benefit) $ 140.0 $ 253.7 $ 101.2 $ ( 102.6 ) $ 392.3 Tax benefit related to net realized capital losses, as adjusted ( 33.5 ) Tax benefit from exited business (1) ( 129.8 ) Certain adjustments related to equity method investments and noncontrolling interest ( 68.5 ) Total income taxes per consolidated statements of operations $ 160.5 For the year ended December 31, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment income tax expense (benefit) $ 129.3 $ 230.8 $ 89.0 $ ( 84.6 ) $ 364.5 Tax benefit related to net realized capital losses, as adjusted ( 16.1 ) Tax expense from exited business (1) 17.6 Certain adjustments related to equity method investments and noncontrolling interest ( 74.3 ) Total income taxes per consolidated statements of operations $ 291.7 For the year ended December 31, 2023 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment income tax expense (benefit) $ 130.9 $ 220.7 $ 97.7 $ ( 42.2 ) $ 407.1 Tax benefit related to net realized capital losses, as adjusted ( 22.0 ) Tax benefit from exited business (1) ( 238.1 ) Certain adjustments related to equity method investments and noncontrolling interest ( 78.3 ) Total income taxes per consolidated statements of operations $ 68.7 (1) Income tax expense (benefit) related to exited business included: For the year ended December 31, 2025 2024 2023 (in millions) Change in fair value of funds withheld embedded derivative $ ( 80.0 ) $ 94.0 $ ( 228.0 ) Net realized capital gains on funds withheld assets 9.1 18.4 34.6 Global Intangible Low-Taxed Income allocated to exited business — — ( 0.9 ) Amortization of reinsurance loss ( 17.7 ) ( 123.8 ) ( 14.4 ) Other impacts of exited business ( 41.2 ) 29.0 ( 29.4 ) Total income tax expense (benefit) related to exited business $ ( 129.8 ) $ 17.6 $ ( 238.1 ) 224 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 21. Revenues from Contracts with Customers The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations. For the year ended December 31, 2025 2024 2023 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions $ 606.7 $ 667.1 $ 556.3 Principal Asset Management: Investment Management 1,757.8 1,694.5 1,627.6 International Pension 363.7 371.6 383.1 Eliminations ( 19.8 ) ( 15.8 ) ( 21.1 ) Total Principal Asset Management 2,101.7 2,050.3 1,989.6 Benefits and Protection: Specialty Benefits 15.4 15.4 15.9 Life Insurance 93.0 94.4 74.0 Eliminations ( 0.1 ) ( 0.1 ) ( 0.1 ) Total Benefits and Protection 108.3 109.7 89.8 Corporate 245.8 226.3 179.2 Total segment revenue from contracts with customers 3,062.5 3,053.4 2,814.9 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 1,292.0 1,192.4 1,200.5 Pre-tax other adjustments (2) 70.3 74.7 80.5 Total fees and other revenues per consolidated statements of operations $ 4,424.8 $ 4,320.5 $ 4,095.9 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments to fee revenues. Retirement and Income Solutions Retirement and Income Solutions offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Individual retirement accounts (“IRAs”) are offered through Principal Bank. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions. Administrative service fee revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Administrative service fee revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer. Administrative service fee revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client’s investments or assets under administration. If the consideration for this series of performance obligations is based on market value, it is considered variable during the billing period as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each billing period’s series of distinct services once the market value of the client’s investments or assets under administration is determined at market close. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion. 225 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 21. Revenues from Contracts with Customers – (continued) IRAs are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Deposit account fee revenues are earned as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients’ portfolios. The types of revenues from contracts with customers were as follows: For the year ended December 31, 2025 2024 2023 (in millions) Administrative service fee revenue $ 587.5 $ 651.1 $ 539.5 Deposit account fee revenue 13.3 12.4 11.3 Commission income 5.9 3.6 1.9 Other fee revenue — — 3.6 Total revenues from contracts with customers 606.7 667.1 556.3 Fees and other revenues not within the scope of revenue recognition guidance 1,190.4 1,123.3 1,118.7 Total fees and other revenues 1,797.1 1,790.4 1,675.0 Premiums and other considerations 2,979.1 3,136.9 2,935.0 Net investment income 3,405.7 3,048.8 2,640.2 Total operating revenues $ 8,181.9 $ 7,976.1 $ 7,250.2 Principal Asset Management Fees and other revenues earned for asset management, investment advisory and distribution services provided to institutional and retail clients in addition to trustee and/or administrative services performed for retirement savings plans. Fees are based largely upon contractual rates applied to the specified amounts of the clients’ portfolios. Each service is a distinct performance obligation; however, if the services are not distinct on their own, we combine them into a distinct bundle or we have a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues received for performance obligations such as asset management and other services are typically recognized over time utilizing the output method as the service is performed. Performance fees and transaction fees on certain accounts are recognized in income when the probability of significant reversal will not occur upon resolution of the uncertainty, which could be based on a variety of factors such as market performance or other internal metrics. Asset management fees are accrued each month based on the fee terms within the applicable agreement and are generally billed quarterly when values used for the calculation are available. Management fees and performance fees are variable consideration as they are subject to fluctuation based on assets under management (“AUM”) and other constraints. These fees are not recognized until unconstrained at the end of each reporting period. Incentive-based fees are recognized in income when the probability of significant reversal will not occur upon the resolution of the uncertainty, which is based on market performance. Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these contracts as services are performed over the life of the contract and review annually. 226 Table of Contents Principal Financial Group, Inc. Notes to Consolidated Financial Statements – (continued) December 31, 2025 21. Revenues from Contracts with Customers – (continued) The types of revenues from contracts with customers were as follows: For the year ended December 31, 2025 2024 2023 (in millions) Investment Management: Management fee revenue $ 1,592.2 $ 1,533.8 $ 1,441.0 Other fee revenue 165.6 160.7 186.6 Total revenues from contracts with customers 1,757.8 1,694.5 1,627.6 Fees and other revenues not within the scope of revenue recognition guidance 29.5 20.9 24.4 Total fees and other revenues 1,787.3 1,715.4 1,652.0 Net investment income 100.2 105.3 97.6 Total operating revenues $ 1,887.5 $ 1,820.7 $ 1,749.6 For the year ended December 31, 2025 2024 2023 (in millions) International Pension: Management fee revenue $ 349.6 $ 356.6 $ 363.8 Other fee revenue 14.1 15.0 19.3 Total revenues from contracts with customers 363.7 371.6 383.1 Fees and other revenues not within the scope of revenue recognition guidance 9.6 5.4 5.8 Total fees and other revenues 373.3 377.0 388.9 Premiums and other considerations 5.9 28.7 29.0 Net investment income 564.0 580.4 636.8 Total operating revenues $ 943.2 $ 986.1 $ 1,054.7 Benefits and Protection Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed. Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue. 227