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10-Q – 2025-10-29 – pfg-20250930x10q.htm
Interest rate contracts $ 22.8 $ 35.4 $ 136.2 $ 246.9 Foreign exchange contracts 28.2 20.0 21.1 34.8 Equity contracts 845.8 405.0 160.2 119.8 Credit contracts 10.1 17.4 9.1 1.0 Other contracts — — ( 1,330.4 ) ( 2,436.1 ) Total derivatives not designated as hedging instruments 906.9 477.8 ( 1,003.8 ) ( 2,033.6 ) Total derivative instruments $ 1,037.9 $ 648.2 $ ( 807.2 ) $ ( 1,929.9 ) (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $ 1,228.8 million and $ 578.4 million as of September 30, 2025 and December 31, 2024, respectively, are reported with contractholder funds on the consolidated statements of financial position. Embedded derivatives with a net (asset) liability fair value of $( 2,559.2 ) million and $( 3,014.5 ) million as of September 30, 2025 and December 31, 2024, respectively, are reported with funds withheld payable on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. Our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps” or “single name total return swaps”). These instruments are either referenced in an OTC credit derivative transaction or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also may have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of September 30, 2025 and December 31, 2024, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. 44 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The following tables show our derivative protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above. September 30, 2025 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt AA $ 96.7 $ 1.0 $ 96.7 6.6 A 168.8 ( 2.3 ) 168.8 7.3 BBB 130.0 2.7 130.0 1.7 Total single name credit default swaps 395.5 1.4 395.5 5.3 Single name total return swaps Government/municipalities AAA 40.0 ( 0.1 ) 40.0 29.8 AA 195.0 ( 1.0 ) 195.0 20.7 A 210.0 2.5 210.0 21.9 BBB 55.0 0.2 55.0 15.5 Total single name total return swaps 500.0 1.6 500.0 21.4 Total credit derivatives sold $ 895.5 $ 3.0 $ 895.5 14.3 December 31, 2024 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.2 $ 40.0 0.5 BBB 160.0 3.6 160.0 2.1 Sovereign A 20.0 0.1 20.0 0.5 Total single name credit default swaps 220.0 3.9 220.0 1.7 Single name total return swaps Government/municipalities AAA 40.0 2.3 40.0 30.6 AA 130.0 6.4 130.0 26.5 A 80.0 4.8 80.0 30.7 Total single name total return swaps 250.0 13.5 250.0 28.5 Total credit derivatives sold $ 470.0 $ 17.4 $ 470.0 15.9 45 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Fair Value and Cash Flow Hedges Fair Value Hedges We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and also use them to align the interest rate characteristics of certain liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes. We enter into currency exchange swap agreements to convert certain foreign denominated assets into U.S. dollar denominated instruments to hedge the exposure to future currency volatility on those items. The net interest effect of interest rate swap and currency swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The currency related impacts of currency swap transactions for derivatives in fair value hedges is recorded as an adjustment to net realized capital gains or losses of the underlying hedged item in our consolidated statements of operations. The following amounts were recorded on the consolidated statements of financial position related to cumulative basis adjustments for fair value hedges. The amortized cost includes the amortized cost basis and the fair value hedging basis adjustment. Cumulative amount of fair value hedging basis adjustment Line item in the consolidated statements increase/(decrease) included in the of financial position in which the Carrying amount of hedged item carrying amount of the hedged item hedged item is included September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 (in millions) Fixed maturities, available-for-sale (1): Active hedging relationships $ 2,898.7 $ 3,208.4 $ ( 18.5 ) $ ( 33.1 ) Discontinued hedging relationships 693.1 528.6 ( 7.5 ) ( 7.0 ) Total fixed maturities, available-for-sale in active or discontinued hedging relationships $ 3,591.8 $ 3,737.0 $ ( 26.0 ) $ ( 40.1 ) Mortgage loans (2): Active hedging relationships $ 1,530.7 $ 1,707.1 $ ( 0.9 ) $ ( 8.4 ) Total mortgage loans in active or discontinued hedging relationships $ 1,530.7 $ 1,707.1 $ ( 0.9 ) $ ( 8.4 ) Investment contracts: Active hedging relationships $ 3,720.5 $ 2,769.6 $ 36.3 $ ( 22.0 ) Total investment contracts in active or discontinued hedging relationships $ 3,720.5 $ 2,769.6 $ 36.3 $ ( 22.0 ) (1) These amounts include the amortized cost basis of closed portfolios used to designate portfolio layer hedging relationships in which the hedged layer amount is expected to remain at the end of the hedging relationship. As of September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $ 2,461.3 million and $ 2,849.3 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $( 18.9 ) million and $( 55.7 ) million, respectively, and the amount of the designated hedged items were $ 1,030.0 million and $ 1,160.0 million, respectively. (2) These amounts include the amortized cost basis of closed portfolios used to designate portfolio layer hedging relationships in which the hedged layer amount is expected to remain at the end of the hedging relationship. As of September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $ 1,530.7 million and $ 1,707.1 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $( 0.9 ) million and $( 8.4 ) million, respectively, and the amount of the designated hedged items were $ 220.0 million and $ 220.0 million, respectively. 46 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Derivative instruments’ gains (losses) excluded from the assessment of hedge effectiveness were $ 2.8 million and $ 0.8 million for the three months ended September 30, 2025 and 2024, respectively, and $ 1.5 million and $ 1.5 million for the nine months ended September 30, 2025 and 2024, respectively. Cash Flow Hedges We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities. We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed rate instruments to eliminate the exposure to future currency volatility on those items. We use bond forwards and floating-to-fixed rate interest rate swaps to hedge forecasted transactions. The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 1.4 years. As of September 30, 2025, we had $ 21.0 million of net gains reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of financial position. Amount of gain (loss) recognized in AOCI on derivatives For the three months ended For the nine months ended Derivatives in cash September 30, September 30, flow hedging relationships Related hedged item 2025 2024 2025 2024 (in millions) Interest rate contracts Fixed maturities, available-for-sale $ 10.5 $ 18.0 $ 21.0 $ 7.9 Interest rate contracts Investment contracts — ( 2.3 ) — ( 9.0 ) Foreign exchange contracts Fixed maturities, available-for-sale 74.8 ( 64.2 ) ( 123.8 ) 6.4 Total $ 85.3 $ ( 48.5 ) $ ( 102.8 ) $ 5.3 We expect to reclassify net gains of $ 33.6 million from AOCI into net income in the next twelve months, which includes both net deferred gains on discontinued hedges and net gains on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions. 47 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations The following tables show the effect of derivatives in fair value and cash flow hedging relationships and the related hedged items on the consolidated statements of operations. For the three months ended September 30, 2025 Net realized Net investment capital gains Benefits, claims income related (losses) related to and settlement to hedges of hedges of fixed expenses related fixed maturities, maturities, to hedges of available-for-sale available- investment and mortgage loans for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 1,200.5 $ 85.7 $ 1,964.1 Gains (losses) on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 7.0 $ — $ 6.6 Loss recognized on derivatives ( 7.2 ) — ( 3.1 ) Amortization of hedged item basis adjustments 0.9 — — Amounts related to periodic settlements on derivatives 9.0 — ( 5.6 ) Foreign exchange contracts: Gain recognized on hedged item — 0.2 — Loss recognized on derivatives — ( 0.2 ) — Amounts related to periodic settlements on derivatives 0.8 — — Total gain (loss) recognized for fair value hedging relationships $ 10.5 $ — $ ( 2.1 ) Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 0.6 $ — $ ( 0.1 ) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.1 — Amounts related to periodic settlements on derivatives ( 0.1 ) — — Foreign exchange contracts: Loss reclassified from AOCI on derivatives — ( 0.2 ) — Amounts related to periodic settlements on derivatives 8.2 — — Total gain (loss) recognized for cash flow hedging relationships $ 8.7 $ ( 0.1 ) $ ( 0.1 ) 48 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the three months ended September 30, 2024 Net realized Net investment capital gains Benefits, claims income related (losses) related to and settlement to hedges of hedges of fixed expenses related fixed maturities, maturities, to hedges of available-for-sale available- investment and mortgage loans for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 1,167.6 $ 77.4 $ 1,778.1 Gains (losses) on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 49.2 $ — $ 47.4 Loss recognized on derivatives ( 45.6 ) — ( 44.9 ) Amortization of hedged item basis adjustments 0.7 — — Amounts related to periodic settlements on derivatives 14.9 — ( 6.8 ) Foreign exchange contracts: Gain recognized on hedged item — 8.0 — Loss recognized on derivatives — ( 7.7 ) — Amounts related to periodic settlements on derivatives 0.8 — — Total gain (loss) recognized for fair value hedging relationships $ 20.0 $ 0.3 $ ( 4.3 ) Gains on cash flow hedging relationships: Interest rate contracts: Gain reclassified from AOCI on derivatives $ 0.8 $ — $ — Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.3 — Amounts related to periodic settlements on derivatives — — 2.2 Foreign exchange contracts: Loss reclassified from AOCI on derivatives — ( 0.2 ) — Amounts related to periodic settlements on derivatives 6.9 — — Total gain recognized for cash flow hedging relationships $ 7.7 $ 0.1 $ 2.2 49 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the nine months ended September 30, 2025 Net realized Net investment capital gains Benefits, claims income related (losses) related to and settlement to hedges of hedges of fixed expenses related fixed maturities, maturities, to hedges of available-for-sale available- investment and mortgage loans for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,529.0 $ ( 26.0 ) $ 6,024.0 Gains (losses) on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 49.4 $ — $ 58.3 Loss recognized on derivatives ( 49.7 ) — ( 59.7 ) Amortization of hedged item basis adjustments 2.8 — — Amounts related to periodic settlements on derivatives 29.1 — ( 15.4 ) Foreign exchange contracts: Gain recognized on hedged item — 25.2 — Loss recognized on derivatives — ( 25.2 ) — Amounts related to periodic settlements on derivatives 2.3 — — Total gain (loss) recognized for fair value hedging relationships $ 33.9 $ — $ ( 16.8 ) Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 1.9 $ — $ ( 0.2 ) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.1 — Amounts related to periodic settlements on derivatives ( 0.4 ) — — Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 2.5 — Amounts related to periodic settlements on derivatives 25.8 — — Total gain (loss) recognized for cash flow hedging relationships $ 27.3 $ 2.6 $ ( 0.2 ) 50 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the nine months ended September 30, 2024 Net realized Net investment capital gains Benefits, claims income related (losses) related to and settlement to hedges of hedges of fixed expenses related fixed maturities, maturities, to hedges of available-for-sale available- investment and mortgage loans for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 3,325.9 $ 61.3 $ 5,925.7 Gains (losses) on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 33.0 $ — $ 29.1 Loss recognized on derivatives ( 30.5 ) — ( 26.3 ) Amortization of hedged item basis adjustments 1.7 — — Amounts related to periodic settlements on derivatives 47.1 — ( 16.9 ) Foreign exchange contracts: Gain recognized on hedged item — 2.3 — Loss recognized on derivatives — ( 2.3 ) — Amounts related to periodic settlements on derivatives 2.3 — — Total gain (loss) recognized for fair value hedging relationships $ 53.6 $ — $ ( 14.1 ) Gains on cash flow hedging relationships: Interest rate contracts: Gain (loss) reclassified from AOCI on derivatives $ 2.6 $ — $ ( 0.1 ) Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 0.4 — Amounts related to periodic settlements on derivatives — — 9.8 Foreign exchange contracts: Loss reclassified from AOCI on derivatives — ( 0.2 ) — Amounts related to periodic settlements on derivatives 19.2 — — Total gain recognized for cash flow hedging relationships $ 21.8 $ 0.2 $ 9.7 Net Investment Hedges We may take measures to hedge our net equity investments in our foreign operations from currency risk. This is accomplished with the use of currency forwards. Gains and losses associated with net investment hedges are recorded in AOCI and will be released into net income if our investment in the foreign operation is sold or substantially liquidated. 51 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The following tables show the effect of foreign exchange contracts used to hedge a portion of our net investment in certain sponsored investment funds on the consolidated financial statements. Amount of loss Amount of loss recognized reclassified from AOCI into in AOCI on derivatives net realized capital gains (losses) for the three months ended for the three months ended September 30, September 30, Derivatives in net investment hedging relationships 2025 2024 2025 2024 (in millions) Foreign exchange contracts $ — $ ( 1.3 ) $ — $ — Total $ — $ ( 1.3 ) $ — $ — Amount of loss Amount of gain (loss) recognized reclassified from AOCI into in AOCI on derivatives net realized capital gains (losses) for the nine months ended for the nine months ended September 30, September 30, Derivatives in net investment hedging relationships 2025 2024 2025 2024 (in millions) Foreign exchange contracts $ ( 3.6 ) $ 0.2 $ — $ — Total $ ( 3.6 ) $ 0.2 $ — $ — Derivatives Not Designated as Hedging Instruments We use futures, certain swaptions and swaps, option collars, options and forwards in effective economic hedges that have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations. However, the change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. Additionally, mark-to-market gains and losses as well as periodic and final settlements for derivatives used to hedge market risk benefits are reported in market risk benefit (gain) loss on the consolidated statements of operations. The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations and are net of amounts on funds withheld invested assets that are passed directly to the reinsurer. See Note 11, Reinsurance, for further details. Amount of gain (loss) recognized in Amount of gain (loss) recognized in net income on derivatives for the net income on derivatives for the three months ended September 30, nine months ended September 30, Derivatives not designated as hedging instruments 2025 2024 2025 2024 (in millions) Interest rate contracts $ ( 13.6 ) $ ( 20.0 ) $ ( 200.2 ) $ ( 151.8 ) Foreign exchange contracts ( 24.7 ) 28.0 ( 8.7 ) 11.8 Equity contracts 217.5 26.6 239.8 18.1 Credit contracts 19.1 4.3 ( 9.0 ) 5.7 Other contracts (1) ( 631.1 ) ( 914.8 ) ( 1,105.7 ) ( 599.4 ) Total $ ( 432.8 ) $ ( 875.9 ) $ ( 1,083.8 ) $ ( 715.6 ) (1) Includes the change in fair value of the funds withheld embedded derivative. 52 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 6. Deferred Acquisition Costs and Other Actuarial Balances Deferred Acquisition Costs Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contracts are capitalized in the period they are incurred. Maintenance costs and acquisition costs that are not deferrable are charged to operating expenses as incurred. For our long-duration insurance products and certain investment contracts, DAC is amortized on a constant level basis over the expected life of the contracts using groupings and assumptions consistent with those used in computing policyholder liabilities. For each of our long-duration insurance products, we select an inforce measure as a basis for amortization that will result in a constant level amortization pattern for the expected life of the contract. If our actual contract terminations differ from our expectation, the amortization pattern is adjusted on a prospective basis. Some of our life and disability products within the Benefits and Protection segment have renewal commissions resulting in new DAC capitalizations in the years following the initial capitalization. We also have life products that allow for underwritten death benefit increases and cost of living adjustments, resulting in an immaterial amount of new DAC capitalizations each year. The new capitalizations are added to the existing DAC balance when incurred and amortized over the remaining life of the business. DAC on short-duration group benefits contracts is amortized over the estimated life of the underlying contracts. We review and update actuarial experience assumptions (such as mortality, surrenders, lapse, and premium persistency) serving as inputs to the models that establish the expected life for DAC and other actuarial balances during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. We make model refinements as necessary, and any changes resulting from these assumption updates are applied prospectively. DAC amortization expense of $ 103.4 million and $ 98.4 million for the three months ended September 30, 2025 and 2024, and $ 300.6 million and $ 293.0 million for the nine months ended September 30, 2025 and 2024, respectively, related to our long-duration and short-duration contracts was recorded in operating expenses on the consolidated statements of operations. 53 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The following tables summarize disaggregated DAC amounts and reconcile the totals to those reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 525.0 $ 515.5 Individual variable annuities 368.6 323.4 Pension risk transfer 23.8 21.1 Individual fixed deferred annuities 71.1 84.2 Investment only 11.9 13.0 Total Retirement and Income Solutions 1,000.4 957.2 Benefits and Protection: Specialty Benefits: Individual disability 710.6 696.9 Life Insurance: Universal life 1,517.8 1,527.7 Term life 720.0 710.8 Participating life 72.8 77.8 Total Benefits and Protection 3,021.2 3,013.2 Short-duration contracts 34.5 30.6 Other balances (1) 1.2 5.9 Total DAC per consolidated statements of financial position $ 4,057.3 $ 4,006.9 (1) Includes insignificant balances for long-duration contracts. Retirement and Income Solutions The balances and changes in DAC were as follows: Workplace Individual savings and Individual Pension fixed retirement variable risk deferred Investment solutions annuities transfer annuities only (in millions) Balances as of January 1, 2024 $ 506.4 $ 279.5 $ 15.4 $ 106.1 $ 11.5 Costs deferred 47.7 72.7 6.6 — 6.5 Amortized to expense ( 38.6 ) ( 28.8 ) ( 0.9 ) ( 21.9 ) ( 5.0 ) Balances as of December 31, 2024 515.5 323.4 21.1 84.2 13.0 Costs deferred 37.6 70.9 3.6 — 2.6 Amortized to expense ( 28.1 ) ( 25.7 ) ( 0.9 ) ( 13.1 ) ( 3.7 ) Balances as of September 30, 2025 $ 525.0 $ 368.6 $ 23.8 $ 71.1 $ 11.9 54 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Benefits and Protection The balances and changes in DAC were as follows: Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balances as of January 1, 2024 $ 667.7 $ 1,545.3 $ 695.1 $ 84.7 Costs deferred 79.0 76.7 78.3 1.7 Amortized to expense ( 49.8 ) ( 94.3 ) ( 62.6 ) ( 8.6 ) Balances as of December 31, 2024 696.9 1,527.7 710.8 77.8 Costs deferred 54.0 61.2 56.3 1.0 Amortized to expense ( 40.3 ) ( 71.1 ) ( 47.1 ) ( 6.0 ) Balances as of September 30, 2025 $ 710.6 $ 1,517.8 $ 720.0 $ 72.8 Unearned Revenue Liability An unearned revenue liability is established when we collect fees or other policyholder assessments, inclusive of cost of insurance charges, administrative charges and other similar fees, for services to be provided in future periods. These unearned front-end fees are deferred and the amortization is recorded using an approach consistent with DAC. The unearned revenue liability is included within other policyholder funds in the consolidated statements of financial position. The following table summarizes disaggregated unearned revenue liability amounts and reconciles the totals to those reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Benefits and Protection - Life Insurance: Universal life $ 527.5 $ 510.1 Other balances (1) — 5.3 Total unearned revenue liability $ 527.5 $ 515.4 (1) Includes insignificant balances for long-duration contracts. Benefits and Protection The balances and changes in the unearned revenue liability for Life Insurance – Universal life contracts were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 (in millions) Balance at beginning of period $ 510.1 $ 485.5 Deferrals 42.3 56.1 Revenue recognized ( 24.9 ) ( 31.5 ) Balance at end of period 527.5 510.1 Reinsurance impact ( 216.9 ) ( 220.8 ) Balance at end of period after reinsurance $ 310.6 $ 289.3 55 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 7. Separate Account Balances The separate accounts are legally segregated and are not subject to claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. Refer to Note 17, Fair Value Measurements, for further information on the valuation methodologies. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. The Retirement and Income Solutions segment offers variable annuity contracts that allow the policyholder to allocate deposits into various investment options in a separate account. The variable annuity contracts can also include GMWB riders and guaranteed minimum death benefit (“GMDB”) riders that are accounted for as MRBs. Retirement and Income Solutions also offers certain group annuity contracts that have separate accounts as an investment option. The Principal Asset Management segment offers certain retirement accumulation products in Latin America where the segregated funds and associated obligation to the client are consolidated as separate account assets and liabilities within the financial statements. We have determined that summary totals are the most meaningful presentation for these funds. The Benefits and Protection segment offers variable universal life products with separate account investment options. Refer to Note 10, Market Risk Benefits, for further information on the MRBs associated with the contracts mentioned above. As of September 30, 2025 and December 31, 2024, the separate accounts included a separate account valued at $ 78.9 million and $ 79.8 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. 56 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Separate Account Assets The aggregate fair value of assets, by major investment category, supporting separate accounts were as follows: September 30, 2025 December 31, 2024 (in millions) Fixed maturities: U.S. government and agencies $ 8,860.0 $ 7,537.1 Non-U.S. governments 8,890.8 8,461.5 States and political subdivisions 165.4 170.1 Corporate 12,827.4 12,590.9 Residential mortgage-backed pass-through securities 4,244.6 3,746.0 Commercial mortgage-backed securities 305.0 201.4 Other debt obligations 449.5 594.1 Total fixed maturities 35,742.7 33,301.1 Equity securities 138,191.3 126,575.0 Real estate 444.9 441.3 Other investments 8,886.4 8,160.2 Cash and cash equivalents 4,812.1 4,021.7 Other assets 1,174.1 827.8 Total separate account assets per consolidated statements of financial position $ 189,251.5 $ 173,327.1 Separate Account Liabilities The following tables summarize disaggregated separate account liability amounts and reconcile the totals to separate account liabilities reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Retirement and Income Solutions: Group retirement contracts $ 135,296.5 $ 125,103.1 Individual variable annuities 7,676.2 8,334.9 Total Retirement and Income Solutions 142,972.7 133,438.0 Principal Asset Management – International Pension: Latin America: Pension 38,300.6 32,802.2 Benefits and Protection - Life Insurance: Universal life 7,668.9 6,806.7 Other balances (1) 309.3 280.2 Total separate account liabilities per consolidated statements of financial position $ 189,251.5 $ 173,327.1 (1) Includes insignificant balances for long-duration contracts. 57 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Retirement and Income Solutions The balances and the changes in separate account liabilities were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 Group Individual Group Individual retirement variable retirement variable contracts annuities contracts annuities (in millions) Balance at beginning of period $ 125,103.1 $ 8,334.9 $ 117,518.5 $ 9,131.9 Premiums and deposits (1) 11,249.3 122.9 16,573.1 344.5 Policy charges ( 261.4 ) ( 126.7 ) ( 365.6 ) ( 197.6 ) Surrenders, withdrawals and benefit payments (1) ( 12,155.7 ) ( 1,357.0 ) ( 19,191.4 ) ( 1,977.7 ) Investment performance 13,266.6 721.2 14,632.1 1,079.0 Net transfers (to) from general account (1) ( 1,870.7 ) ( 19.1 ) ( 4,148.3 ) ( 2.1 ) Other (2) ( 34.7 ) — 84.7 ( 43.1 ) Balance at end of period $ 135,296.5 $ 7,676.2 $ 125,103.1 $ 8,334.9 Cash surrender value (3) $ 134,152.0 $ 7,571.7 $ 123,965.4 $ 8,219.1 (1) Within the policyholder account balances rollforwards in Note 8, Contractholder Funds, amounts in these lines for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in net transfers from (to) separate account. (2) Includes amounts to be settled between the separate account and general account due to the timing of trade settlements as of the reporting date. (3) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Principal Asset Management – International Pension The balances and the changes in separate account liabilities for Latin America – Pension were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 (in millions) Balance at beginning of period $ 32,802.2 $ 34,580.6 Premiums and deposits 2,573.5 3,347.7 Policy charges ( 13.0 ) ( 16.6 ) Surrenders, withdrawals and benefit payments ( 2,934.7 ) ( 3,638.0 ) Investment performance 4,751.9 2,890.1 Other 7.3 22.8 Foreign currency translation adjustment 1,113.4 ( 4,384.4 ) Balance at end of period $ 38,300.6 $ 32,802.2 Cash surrender value $ 38,300.6 $ 32,802.2 58 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Benefits and Protection The balances and the changes in separate account liabilities for Life Insurance – Universal life were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 (in millions) Balance at beginning of period $ 6,806.7 $ 5,982.5 Premiums and deposits (1) 455.1 557.2 Policy charges ( 101.6 ) ( 132.7 ) Surrenders, withdrawals and benefit payments (1) ( 306.5 ) ( 492.2 ) Investment performance 814.2 880.5 Net transfers (to) from general account (1) 1.0 11.4 Balance at end of period $ 7,668.9 $ 6,806.7 Cash surrender value (2) $ 7,742.2 $ 6,869.5 (1) Within the policyholder account balances rollforwards in Note 8, Contractholder Funds, amounts in these lines are reflected in net transfers from (to) separate account. (2) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Certain products include surrender value enhancement riders that result in cash surrender values greater than account balances. 59 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 8. Contractholder Funds Contractholder funds include policyholder account balances related to contracts with significant insurance risk and investment contracts. The following tables summarize disaggregated policyholder account balance amounts and reconcile the totals to contractholder funds reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 15,077.2 $ 13,982.8 Individual variable annuities 3,252.7 1,746.0 Individual fixed deferred annuities 3,928.2 4,462.3 Total Retirement and Income Solutions 22,258.1 20,191.1 Benefits and Protection – Life Insurance: Universal life 6,863.1 6,930.4 Corporate: Inter-segment eliminations ( 351.8 ) ( 361.2 ) Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue 28,769.4 26,760.3 Reconciling items: Investment contracts without significant fee revenue (1) 14,818.8 15,805.8 Embedded derivatives and other balances (2) 833.2 533.5 Total contractholder funds per consolidated statements of financial position $ 44,421.4 $ 43,099.6 (1) Includes GICs, funding agreements, individual fixed income annuities and guaranteed pension contracts. These contracts are not included within the disaggregated rollforward or guaranteed minimum interest rate (“GMIR”) disclosures below. (2) Includes insignificant balances for long-duration contracts, embedded derivative (assets) liabilities, including associated host contract (asset) liability adjustments, and amounts that are not accrued to the benefit of the contractholder and, therefore, are not included within the disaggregated rollforward or GMIR disclosures below. Refer to Note 17, Fair Value Measurements, for details on the changes in Level 3 fair value measurements of embedded derivatives. 60 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Policyholder Account Balances Retirement and Income Solutions The changes in policyholder account balances were as follows: For the nine months ended September 30, 2025 For the year ended December 31, 2024 Workplace Workplace savings and Individual Individual savings and Individual Individual retirement variable fixed deferred retirement variable fixed deferred solutions annuities annuities (1) solutions annuities annuities (1) ($ in millions) Balance at beginning of period $ 13,982.8 $ 1,746.0 $ 4,462.3 $ 12,721.5 $ 514.2 $ 5,538.3 Premiums and deposits 4,061.0 1,704.6 20.3 4,945.1 1,686.5 43.2 Policy charges ( 27.6 ) — — ( 36.7 ) — — Surrenders, withdrawals and benefit payments ( 2,932.0 ) ( 1,457.6 ) ( 646.3 ) ( 3,791.8 ) ( 2,098.2 ) ( 1,255.7 ) Net transfers from (to) separate account (2) ( 364.9 ) 1,253.2 — ( 220.5 ) 1,635.3 — Interest credited 377.6 5.1 91.9 395.9 8.0 136.5 Other ( 19.7 ) 1.4 — ( 30.7 ) 0.2 — Balance at end of period $ 15,077.2 $ 3,252.7 $ 3,928.2 $ 13,982.8 $ 1,746.0 $ 4,462.3 Weighted-average crediting rate (3) 3.75 % 3.37 % 3.19 % 3.26 % 3.39 % 3.09 % Cash surrender value (4) $ 13,813.1 $ 3,573.4 $ 3,709.2 $ 12,524.6 $ 1,778.7 $ 4,208.5 (1) We use the deposit method of accounting for the reinsurance of this exited business. (2) Within the separate account liabilities rollforwards in Note 7, Separate Account Balances, these transfers for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (3) The weighted-average crediting rate is the crediting rate as of the end of each reporting period weighted by account value. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. The cash surrender value for RILA products also includes an equity and bond adjustment that may result in cash surrender value being greater than account balance. The net amount at risk for policyholder account balances for Individual variable annuities is equal to the MRB net amount at risk, as reported in Note 10, Market Risk Benefits. Workplace savings and retirement solutions and Individual fixed deferred annuities do not have guarantees that provide for benefits in excess of the current policyholder account balances. 61 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Benefits and Protection The changes in policyholder account balances for Life Insurance – Universal life were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 ($ in millions) Balance at beginning of period $ 6,930.4 $ 6,910.4 Premiums and deposits 997.7 1,283.7 Policy charges ( 662.7 ) ( 877.1 ) Surrenders, withdrawals and benefit payments ( 456.3 ) ( 591.7 ) Net transfers from (to) separate account (1) ( 149.6 ) ( 76.4 ) Interest credited 203.9 282.6 Other ( 0.3 ) ( 1.1 ) Balance at end of period 6,863.1 6,930.4 Reinsurance impact ( 3,088.9 ) ( 3,232.8 ) Balance at end of period after reinsurance $ 3,774.2 $ 3,697.6 Weighted-average crediting rate (2) 4.02 % 4.13 % Net amount at risk (3) $ 86,087.9 $ 86,141.3 Cash surrender value (4) $ 6,048.8 $ 6,052.5 (1) Within the separate account liabilities rollforwards in Note 7, Separate Account Balances, these transfers are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (2) The weighted-average crediting rate is the crediting rate as of the end of each reporting period weighted by account value, including indexed credits. (3) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the death benefit in excess of the current account balance or the fixed death benefit at the consolidated statement of financial position date. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. 62 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Guaranteed Minimum Interest Rate The account values, for contracts with significant insurance risk and investment contracts with significant fee revenue by range of GMIR and the related range of difference, in basis points, between rates credited to policyholders and the respective GMIR were as follows. The amounts are before reinsurance impacts of our exited U.S. retail fixed annuity and ULSG businesses. September 30, 2025 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00 % $ — $ — $ — $ — $ — $ — 1.01 % - 2.00 % — 2,868.6 — 749.9 — 3,618.5 2.01 % - 3.00 % 347.4 102.8 681.6 3,549.8 4,035.2 8,716.8 3.01 % - 4.00 % 7.8 — — — — 7.8 4.01 % and above 12.9 — — — — 12.9 Subtotal 368.1 2,971.4 681.6 4,299.7 4,035.2 12,356.0 No GMIR 2,721.2 Total $ 15,077.2 Individual variable annuities Up to 1.00 % $ 16.5 $ — $ — $ — $ — $ 16.5 1.01 % - 2.00 % 3.9 — — — — 3.9 2.01 % - 3.00 % 204.9 — — — — 204.9 3.01 % - 4.00 % — — — — — — 4.01 % and above — — — — — — Subtotal 225.3 — — — — 225.3 No GMIR 3,027.4 Total $ 3,252.7 Individual fixed deferred annuities Up to 1.00 % $ 174.5 $ 14.2 $ 29.2 $ 89.5 $ 1,045.5 $ 1,352.9 1.01 % - 2.00 % 69.3 0.2 3.3 34.9 7.7 115.4 2.01 % - 3.00 % 2,170.1 — — — — 2,170.1 3.01 % - 4.00 % 134.1 — — — — 134.1 4.01 % and above — — — — — — Subtotal 2,548.0 14.4 32.5 124.4 1,053.2 3,772.5 No GMIR 155.7 Total $ 3,928.2 Benefits and Protection - Life Insurance Universal life Up to 1.00 % $ — $ — $ 0.3 $ 15.3 $ 29.1 $ 44.7 1.01 % - 2.00 % 247.3 — 347.8 610.5 453.3 1,658.9 2.01 % - 3.00 % 587.8 602.6 724.1 389.8 5.2 2,309.5 3.01 % - 4.00 % 1,560.3 56.6 20.9 119.7 3.4 1,760.9 4.01 % and above 17.6 5.5 20.0 7.8 — 50.9 Subtotal 2,413.0 664.7 1,113.1 1,143.1 491.0 5,824.9 No GMIR 1,038.2 Total $ 6,863.1 63 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) December 31, 2024 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00 % $ — $ — $ — $ 1,041.7 $ 445.2 $ 1,486.9 1.01 % - 2.00 % 3,727.0 — — 1,056.3 — 4,783.3 2.01 % - 3.00 % 4.6 186.9 1.8 2,900.0 2,740.1 5,833.4 3.01 % - 4.00 % 7.6 — — — — 7.6 4.01 % and above 13.9 — — — — 13.9 Subtotal 3,753.1 186.9 1.8 4,998.0 3,185.3 12,125.1 No GMIR 1,857.7 Total $ 13,982.8 Individual variable annuities Up to 1.00 % $ 19.2 $ — $ — $ — $ — $ 19.2 1.01 % - 2.00 % 3.8 — — — — 3.8 2.01 % - 3.00 % 231.5 — — — — 231.5 3.01 % - 4.00 % — — — — — — 4.01 % and above — — — — — — Subtotal 254.5 — — — — 254.5 No GMIR 1,491.5 Total $ 1,746.0 Individual fixed deferred annuities Up to 1.00 % $ 213.1 $ 27.5 $ 56.0 $ 196.9 $ 1,093.2 $ 1,586.7 1.01 % - 2.00 % 78.8 0.3 4.8 48.2 7.4 139.5 2.01 % - 3.00 % 2,416.4 — — — — 2,416.4 3.01 % - 4.00 % 142.0 — — — — 142.0 4.01 % and above — — — — — — Subtotal 2,850.3 27.8 60.8 245.1 1,100.6 4,284.6 No GMIR 177.7 Total $ 4,462.3 Benefits and Protection - Life Insurance Universal life Up to 1.00 % $ — $ — $ 1.5 $ 14.9 $ 4.9 $ 21.3 1.01 % - 2.00 % 268.6 — 424.0 518.6 452.3 1,663.5 2.01 % - 3.00 % 646.0 632.2 771.9 368.7 6.3 2,425.1 3.01 % - 4.00 % 1,559.7 56.7 34.5 105.4 7.0 1,763.3 4.01 % and above 23.5 2.5 7.0 18.9 — 51.9 Subtotal 2,497.8 691.4 1,238.9 1,026.5 470.5 5,925.1 No GMIR 1,005.3 Total $ 6,930.4 64 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 9 . Future Policy Benefits and Claims Future policy benefits and claims include reserves for short-duration contracts and long-duration contracts as well as certain reinsurance balances, when in a liability position. The following tables summarize disaggregated amounts included in future policy benefit and claims and reconcile the totals to those reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Liability for future policy benefits by segment (1): Retirement and Income Solutions: Pension risk transfer $ 26,617.1 $ 24,958.1 Individual fixed income annuities 4,442.5 4,504.6 Total Retirement and Income Solutions 31,059.6 29,462.7 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities 4,283.5 4,126.9 Benefits and Protection: Specialty Benefits: Individual disability 2,007.5 1,829.0 Life Insurance: Term life 1,484.5 1,248.0 Total Benefits and Protection 3,492.0 3,077.0 Corporate: Long-term care insurance 168.1 164.8 Total liability for future policy benefits 39,003.2 36,831.4 Additional liability for certain benefit features by segment (2): Benefits and Protection – Life Insurance: Universal life 6,466.3 6,037.2 Total additional liability for certain benefit features 6,466.3 6,037.2 Reconciling items: Participating contracts 2,813.3 2,924.2 Short-duration contracts 1,206.8 1,267.4 Cost of reinsurance liability 982.5 958.1 Reinsurance recoverable liability 26.5 60.3 Other (3) 233.8 100.8 Future policy benefits and claims per consolidated statements of financial position $ 50,732.4 $ 48,179.4 (1) Amounts include the deferred profit liability. (2) Includes reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years. (3) Includes other miscellaneous reserves and the impact of unrealized gains (losses) on the additional liability for certain benefit features. 65 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Liability for Unpaid Claims The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows: For the nine months ended September 30, 2025 2024 (in millions) Balance at beginning of period $ 1,379.9 $ 1,405.9 Less: reinsurance recoverable 61.2 67.8 Net balance at beginning of period 1,318.7 1,338.1 Incurred: Current year 1,368.5 1,332.8 Prior years ( 101.9 ) ( 92.8 ) Total incurred 1,266.6 1,240.0 Payments: Current year 984.3 934.5 Prior years 317.7 315.2 Total payments 1,302.0 1,249.7 Net balance at end of period 1,283.3 1,328.4 Plus: reinsurance recoverable 61.1 62.8 Balance at end of period $ 1,344.4 $ 1,391.2 Incurred liability adjustments relating to prior years, which affected current operations during 2025 and 2024, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. 66 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Long-Duration Contracts Gross Premiums or Assessments and Interest Accretion The amount of gross premiums or assessments and interest accretion recognized by segment in the consolidated statements of operations was as follows: Gross premiums or assessments (1) For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Retirement and Income Solutions: Pension risk transfer $ 560.0 $ 466.3 $ 1,810.1 $ 2,210.4 Individual fixed income annuities 9.1 7.0 23.2 35.2 Total Retirement and Income Solutions 569.1 473.3 1,833.3 2,245.6 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities 0.5 5.1 6.4 18.1 Benefits and Protection: Specialty Benefits: Individual disability 169.0 166.0 489.4 480.5 Life Insurance: Universal life 182.1 177.8 536.3 534.7 Term life 176.9 171.1 520.9 504.8 Total Benefits and Protection 528.0 514.9 1,546.6 1,520.0 Corporate: Long-term care insurance 1.2 1.1 4.1 3.8 Total per consolidated statements of operations $ 1,098.8 $ 994.4 $ 3,390.4 $ 3,787.5 (1) Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments, which are only applicable to the Life Insurance – Universal life level of aggregation, are included within fees and other revenues on the consolidated statements of operations . 67 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Interest accretion (1) For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Retirement and Income Solutions: Pension risk transfer $ 310.8 $ 289.9 $ 919.4 $ 842.5 Individual fixed income annuities 49.0 51.6 148.9 157.4 Total Retirement and Income Solutions 359.8 341.5 1,068.3 999.9 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities (2) 60.9 76.9 228.1 239.7 Benefits and Protection: Specialty Benefits: Individual disability 26.4 25.4 78.4 74.4 Life Insurance: Universal life 71.2 64.9 209.5 186.9 Term life 17.3 14.9 48.9 41.7 Total Benefits and Protection 114.9 105.2 336.8 303.0 Corporate: Long-term care insurance 2.4 2.4 7.1 6.9 Total per consolidated statements of operations $ 538.0 $ 526.0 $ 1,640.3 $ 1,549.5 (1) Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations . (2) Includes inflation adjustments included within the liability for future policy benefits rollforward for interest accretion. Liability for Future Policy Benefits The liability for future policy benefits (“LFPB”) for individual and group annuities is generally equal to the present value of expected future policy benefit payments. The reserves are computed using assumptions for mortality and interest. The LFPB for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefit payments less the present value of expected net premiums. The reserves are computed using assumptions for mortality, interest, morbidity and lapse. Cohorts are used as the unit of account for liability measurement. Actual cash flows are grouped into issue-year cohorts for the liability calculation and updated quarterly. We review and update, if necessary, assumptions used to measure cash flows for the LFPB during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. The change in our liability estimate as a result of updating cash flow assumptions is recognized in net income. 68 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) An interest accretion rate is determined for an identified cohort and remains unchanged after the issue year. For policies issued on or prior to December 31, 2020, the interest accretion rate is based on the assumed investment yield when the business was issued. For policies issued after December 31, 2020, the interest accretion rate is based on the upper-medium grade fixed-income instrument yields, which is generally equivalent to a single-A rated bond yield matched to the duration of our insurance liabilities, when the business was issued. The LFPB is remeasured to reflect current upper-medium grade fixed-income instrument yields as of each reporting date. The liability is calculated by discounting cash flows using rate curves reflecting the currency and duration of the insurance liabilities. For discount rate tenors, or points on the curves, where the upper-medium grade fixed-income instrument yields are not liquid or limited observable market data is available, we use various estimation techniques consistent with fair value measurement guidance. For our individual fixed income annuities in Latin America, the discount rate methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies are issued in the currency in which the policies are denominated. For discount rate tenors where upper-medium grade fixed-income instrument yields based on international rating standards are not liquid or limited observable market data is available, estimation techniques are used to determine a curve in the appropriate currency. Further details regarding reference rates used are included under “Interest Accretion and Current Discount Rates.” Retirement and Income Solutions The balances and the changes in the present value for expected future policy benefits were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 Pension Individual Pension Individual risk fixed income risk fixed income transfer annuities transfer annuities ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 24,958.1 $ 4,504.6 $ 23,855.8 $ 4,914.1 Effect of changes in discount rate assumptions at beginning of period 1,938.8 420.4 1,036.1 296.7 Balance at beginning of period at original discount rate 26,896.9 4,925.0 24,891.9 5,210.8 Effect of changes in cash flow assumptions — — ( 3.4 ) ( 38.4 ) Effect of actual variances from expected experience ( 19.0 ) 1.4 ( 1.5 ) ( 1.7 ) Adjusted beginning of period balance at original discount rate 26,877.9 4,926.4 24,887.0 5,170.7 Interest accrual 919.4 148.9 1,135.1 208.4 Benefit payments ( 1,825.1 ) ( 368.7 ) ( 2,238.1 ) ( 500.2 ) Issuances 1,817.0 22.7 3,112.9 46.1 Balance at end of period at original discount rate 27,789.2 4,729.3 26,896.9 4,925.0 Effect of changes in discount rate assumptions at end of period ( 1,172.1 ) ( 286.8 ) ( 1,938.8 ) ( 420.4 ) Future policy benefits 26,617.1 4,442.5 24,958.1 4,504.6 Reinsurance impact — ( 4,390.9 ) — ( 4,469.4 ) Future policy benefits after reinsurance $ 26,617.1 $ 51.6 $ 24,958.1 $ 35.2 Weighted-average duration for future policy benefits (years) (1) 8.0 7.2 8.0 7.2 (1) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. 69 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Principal Asset Management – International Pension The balances and the changes in the present value for expected future policy benefits for Latin America – Individual fixed income annuities were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 4,126.9 $ 4,593.7 Effect of changes in discount rate assumptions at beginning of period ( 368.4 ) ( 351.8 ) Balance at beginning of period at original discount rate 3,758.5 4,241.9 Effect of actual variances from expected experience ( 0.9 ) 1.1 Adjusted beginning of period balance at original discount rate 3,757.6 4,243.0 Interest accrual (1) 228.1 330.2 Benefit payments ( 249.7 ) ( 326.7 ) Issuances 6.4 29.4 Foreign currency translation adjustment 128.3 ( 517.4 ) Balance at end of period at original discount rate 3,870.7 3,758.5 Effect of changes in discount rate assumptions at end of period 412.8 368.4 Future policy benefits $ 4,283.5 $ 4,126.9 Weighted-average duration for future policy benefits (years) (2) 9.5 9.8 (1) Includes inflation adjustments. (2) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. 70 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Benefits and Protection The balances and the changes in the present value for expected net premiums and expected future policy benefits were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 Specialty Life Specialty Life Benefits Insurance Benefits Insurance Individual Individual disability Term life disability Term life ($ in millions) Present value of expected net premiums Balance at beginning of period $ 2,680.6 $ 4,107.2 $ 2,552.3 $ 3,793.7 Effect of changes in discount rate assumptions at beginning of period 436.4 290.1 313.7 100.1 Balance at beginning of period at original discount rate 3,117.0 4,397.3 2,866.0 3,893.8 Effect of changes in cash flow assumptions ( 22.5 ) 163.2 183.9 419.9 Effect of actual variances from expected experience 97.5 8.5 168.3 42.5 Adjusted beginning of period balance at original discount rate 3,192.0 4,569.0 3,218.2 4,356.2 Interest accrual 81.5 155.2 103.5 190.9 Net premiums collected ( 224.6 ) ( 313.7 ) ( 289.1 ) ( 390.8 ) Issuances 54.4 169.9 84.4 241.0 Balance at end of period at original discount rate 3,103.3 4,580.4 3,117.0 4,397.3 Effect of changes in discount rate assumptions at end of period ( 345.2 ) ( 175.4 ) ( 436.4 ) ( 290.1 ) Balance at end of period $ 2,758.1 $ 4,405.0 $ 2,680.6 $ 4,107.2 Present value of expected future policy benefit payments Balance at beginning of period $ 4,509.6 $ 5,355.2 $ 4,450.7 $ 4,879.6 Effect of changes in discount rate assumptions at beginning of period 1,302.8 366.0 903.5 124.5 Balance at beginning of period at original discount rate 5,812.4 5,721.2 5,354.2 5,004.1 Effect of changes in cash flow assumptions ( 42.6 ) 240.4 216.2 488.1 Effect of actual variances from expected experience 96.5 2.3 173.2 45.1 Adjusted beginning of period balance at original discount rate 5,866.3 5,963.9 5,743.6 5,537.3 Interest accrual 159.9 204.1 203.3 247.9 Benefit payments ( 169.0 ) ( 265.1 ) ( 219.0 ) ( 321.6 ) Issuances 53.2 180.2 84.5 257.6 Balance at end of period at original discount rate 5,910.4 6,083.1 5,812.4 5,721.2 Effect of changes in discount rate assumptions at end of period ( 1,144.8 ) ( 193.6 ) ( 1,302.8 ) ( 366.0 ) Balance at end of period $ 4,765.6 $ 5,889.5 $ 4,509.6 $ 5,355.2 Future policy benefits (1) $ 2,007.5 $ 1,484.5 $ 1,829.0 $ 1,248.0 Reinsurance impact ( 440.2 ) 18.3 ( 412.1 ) 19.5 Future policy benefits after reinsurance $ 1,567.3 $ 1,502.8 $ 1,416.9 $ 1,267.5 Weighted-average duration for future policy benefits (years) (2) 17.5 7.6 18.3 8.4 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. 71 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) We updated our actuarial assumptions during the third quarter of 2025, resulting in a $ 20.1 million decrease in the LFPB and a $ 16.2 million increase to income before taxes, net of reinsurance, for Individual disability. This was primarily due to favorable updates to morbidity assumptions. The updates also resulted in a $ 77.2 million increase in the LFPB and a $ 63.0 million decrease to income before taxes, net of reinsurance, for Term life. This was primarily due to unfavorable updates to lapse and mortality assumptions. We updated our actuarial assumptions during the third quarter of 2024, resulting in a $ 32.3 million increase in the LFPB and an $ 18.2 million decrease to income before taxes, net of reinsurance, for Individual disability. This was primarily due to unfavorable updates to morbidity and lapse assumptions. The updates also resulted in a $ 68.2 million increase in the LFPB and a $ 52.9 million decrease to income before taxes, net of reinsurance, for Term life. This was primarily due to unfavorable updates to mortality and lapse assumptions. Additional Liability for Certain Benefit Features The LFPB also includes an additional reserve on certain universal life contracts where benefit features result in gains in early years followed by losses in later years. The liability for these future losses is accrued in relation to estimated contract assessments. A premium deficiency exists if the net liabilities together with future premiums are determined to be insufficient to provide for expected future policy benefits. Premium deficiency testing considers, among other factors, anticipated investment income and does not include a provision for adverse deviation. We did not have a premium deficiency reserve as of September 30, 2025 or December 31, 2024. The balances and the changes in the additional liability for certain benefit features for Life Insurance - Universal life contracts, excluding the impact of unrealized gains (losses), were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 ($ in millions) Balance at beginning of period $ 6,037.2 $ 5,326.5 Effect of changes in cash flow assumptions 6.8 151.9 Effect of actual variances from expected experience 7.7 28.0 Interest accrual 209.5 253.3 Net assessments collected 321.7 425.2 Benefit payments ( 116.6 ) ( 147.7 ) Balance at end of period 6,466.3 6,037.2 Reinsurance impact ( 6,453.7 ) ( 6,011.3 ) Balance at end of period after reinsurance $ 12.6 $ 25.9 Weighted-average duration for additional liability (years) (1) 22.1 23.3 (1) Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve balance for each cohort. We updated our actuarial assumptions during the third quarter of 2024, resulting in a $ 151.9 million increase in the additional liability for certain benefit features primarily due to mortality assumptions related to ULSG products, resulting in a $ 0.3 million decrease to income before taxes, net of reinsurance. 72 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Corporate The balances and the changes in the present value for expected net premiums and expected future policy benefits for long-term care insurance were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 ($ in millions) Present value of expected net premiums Balance at beginning of period $ 30.8 $ 42.8 Effect of changes in discount rate assumptions at beginning of period ( 1.3 ) ( 3.0 ) Balance at beginning of period at original discount rate 29.5 39.8 Effect of changes in cash flow assumptions 3.3 ( 5.3 ) Effect of actual variances from expected experience ( 0.1 ) ( 2.2 ) Adjusted beginning of period balance at original discount rate 32.7 32.3 Interest accrual 1.3 1.9 Net premiums collected ( 3.5 ) ( 4.7 ) Balance at end of period at original discount rate 30.5 29.5 Effect of changes in discount rate assumptions at end of period 2.1 1.3 Balance at end of period $ 32.6 $ 30.8 Present value of expected future policy benefit payments Balance at beginning of period $ 195.6 $ 209.5 Effect of changes in discount rate assumptions at beginning of period ( 8.8 ) ( 20.0 ) Balance at beginning of period at original discount rate 186.8 189.5 Effect of changes in cash flow assumptions 1.3 ( 1.2 ) Effect of actual variances from expected experience 2.0 2.5 Adjusted beginning of period balance at original discount rate 190.1 190.8 Interest accrual 8.4 11.2 Benefit payments ( 12.1 ) ( 15.2 ) Balance at end of period at original discount rate 186.4 186.8 Effect of changes in discount rate assumptions at end of period 14.3 8.8 Balance at end of period $ 200.7 $ 195.6 Future policy benefits (1) $ 168.1 $ 164.8 Reinsurance impact ( 168.1 ) ( 164.8 ) Future policy benefits after reinsurance $ — $ — Weighted-average duration for future policy benefits (years) (2) 9.9 9.3 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. 73 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Expected Future Gross Premiums and Benefit Payments The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, utilizing the current upper-medium fixed-income instrument yield, were as follows: September 30, 2025 December 31, 2024 (in millions) Retirement and Income Solutions: Pension risk transfer Expected undiscounted future benefit payments $ 41,156.6 $ 39,532.3 Individual fixed income annuities Expected undiscounted future benefit payments $ 6,318.1 $ 6,622.6 Principal Asset Management – International Pension: Latin America: Individual fixed income annuities Expected undiscounted future benefit payments $ 5,620.3 $ 5,509.1 Benefits and Protection – Specialty Benefits: Individual disability Expected discounted future gross premiums $ 5,693.7 $ 5,484.0 Expected undiscounted future gross premiums $ 8,755.0 $ 8,680.0 Expected undiscounted future benefit payments $ 9,936.1 $ 9,808.8 Benefits and Protection – Life Insurance: Term life Expected discounted future gross premiums $ 6,927.4 $ 6,651.2 Expected undiscounted future gross premiums $ 11,882.3 $ 11,391.4 Expected undiscounted future benefit payments $ 9,604.1 $ 8,970.7 Corporate: Long-term care insurance Expected discounted future gross premiums $ 37.1 $ 38.4 Expected undiscounted future gross premiums $ 52.1 $ 55.7 Expected undiscounted future benefit payments $ 364.8 $ 357.3 74 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Interest Accretion and Current Discount Rates The interest accretion rate shown for each level of aggregation is an average of the cohort-level accretion rates weighted by the reserve balance for each cohort within that level of aggregation. The current discount rate is calculated at a cohort-level based on current upper-medium fixed-income instrument yields and weighted by the reserve balance for each cohort within each level of aggregation. The weighted-average rates were as follows: Interest accretion rate Current discount rate September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 Retirement and Income Solutions: Pension risk transfer 4.68 % 4.61 % 5.20 % 5.55 % Individual fixed income annuities 4.22 % 4.22 % 5.11 % 5.50 % Principal Asset Management – International Pension (1): Latin America: Individual fixed income annuities 4.20 % 4.21 % 2.92 % 3.04 % Benefits and Protection: Specialty Benefits: Individual disability 3.85 % 3.89 % 5.34 % 5.64 % Life Insurance: Universal life 4.74 % 4.75 % See note (2) See note (2) Term life 4.83 % 4.82 % 4.90 % 5.35 % Corporate: Long-term care insurance 6.16 % 6.16 % 5.28 % 5.58 % (1) The interest accretion rate and current discount rate are Chilean real rates, excluding inflation, in the local currency. (2) The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount rate at contract inception. Therefore, the current discount rate is not applicable for this product. 10. Market Risk Benefits Contracts or contract features that provide protection to the policyholder from capital market risk, including equity, interest rate or foreign exchange risk, and expose us to other-than-nominal capital market risk are classified as MRBs. We issue certain annuity contracts that include MRBs that have been bifurcated from the host contract. The Retirement and Income Solutions segment offers variable annuity products with GMWB riders and GMDB riders, including return-of-premium GMDB and GMWB riders for its RILA products. MRBs are measured at fair value at the contract level and can be in either an asset or liability position, depending on certain inputs at the reporting date. MRB assets and liabilities are presented separately within the consolidated statements of financial position. Increases to an asset or decreases to a liability are described as favorable changes to fair value. Changes in fair value are reported in MRB remeasurement (gain) loss on the consolidated statements of operations. However, the change in fair value related to our own nonperformance risk is reported in OCI. For contracts that contain multiple MRB features, the MRBs are valued on a combined basis using an integrated model. MRBs are classified as Level 3 fair value measurements as the fair value is based on unobservable inputs. The key assumptions for calculating the fair value of the MRBs are market assumptions such as equity market returns, interest rate levels, market volatility and correlations and policyholder behavior assumptions such as lapse, mortality, utilization and withdrawal patterns. 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. 75 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The assumption for our own nonperformance risk for MRBs is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Increases (decreases) in our own nonperformance risk, which impacts the rates used to discount future cash flows, could lead to favorable (unfavorable) changes in the fair value of the MRBs. Long-term interest rates are used as the mean return when projecting the growth in the value of the associated account value and impact the discount rate used in the discounted future cash flows valuation. The amount of claims will increase if account value is not sufficient to cover guaranteed withdrawals. An increase (decrease) in risk-free rates could cause a favorable (unfavorable) change in the fair value of the MRBs. A decrease (increase) in market volatilities could cause a favorable (unfavorable) change in the fair value of the MRBs. An increase (decrease) in mortality rates or the overall lapse rate assumptions could cause a favorable (unfavorable) change in the fair value of the MRBs. The lapse rate assumption may vary dynamically based on the relationship between the guarantee and associated account value. A weaker (stronger) dynamic lapse rate assumption could lead to favorable (unfavorable) changes in the fair value of the MRBs. The utilization rate assumption includes how many contractholders will take withdrawals, when they will take them and how much of their benefit they will take. A decrease (increase) in the number of contractholders taking withdrawals, contractholders taking withdrawals earlier versus later, or contractholders taking more versus less of their benefit could lead to favorable (unfavorable) changes in the fair value of the MRBs. The following tables summarize disaggregated MRB amounts in an asset and liability position reported in the consolidated statements of financial position. September 30, 2025 December 31, 2024 Net asset Net asset Asset Liability (liability) Asset Liability (liability) (in millions) Retirement and Income Solutions: Individual variable annuities $ 187.5 $ 69.1 $ 118.4 $ 199.5 $ 62.1 $ 137.4 Total MRB per consolidated statements of financial position $ 187.5 $ 69.1 $ 118.4 $ 199.5 $ 62.1 $ 137.4 76 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Retirement and Income Solutions The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 ($ in millions) Balance at beginning of period $ 137.4 $ 41.5 Effect of changes in nonperformance risk at beginning of period 19.0 7.7 Adjusted balance at beginning of period 156.4 49.2 Effect of: Interest accrual and expected policyholder behavior ( 43.8 ) ( 66.8 ) Benefit payments ( 0.1 ) 0.6 Changes in interest rates ( 1.9 ) 100.4 Changes in equity markets 43.3 92.4 Changes in equity index volatility ( 7.9 ) 12.0 Actual policyholder behavior different from expected behavior ( 4.6 ) ( 12.7 ) Changes in future expected policyholder behavior — ( 20.2 ) Changes in other future expected assumptions ( 0.3 ) 1.5 Adjusted balance at end of period 141.1 156.4 Effect of changes in nonperformance risk at end of period ( 22.7 ) ( 19.0 ) Balance at end of period $ 118.4 $ 137.4 Weighted-average attained age of policyholders (years) (1) 67.1 67.4 Net amount at risk (2) $ 28.2 $ 46.8 (1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the age of the contractholders. (2) The net amount at risk for our GMDB riders is defined as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. We had a decrease in the net amount at risk in 2025 primarily as a result of increases in the equity markets. Significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement shown above were as follows: For the nine months ended For the year ended September 30, 2025 December 31, 2024 Change in net Change in net Change in input MRB asset (liability) Change in input MRB asset (liability) Long-term interest rate Decreased Unfavorable Increased Favorable Equity markets Increased Favorable Increased Favorable Equity market volatilities Increased Unfavorable Decreased Favorable Own nonperformance risk Decreased Unfavorable Decreased Unfavorable See “Unobservable Inputs for Fair Value Measurement” for additional details on the inputs. 77 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Unobservable Inputs for Fair Value Measurement The following table provides quantitative information about the significant unobservable inputs used for fair value measurements of MRBs. The utilization rate and mortality rate inputs are omitted from the table as a range does not provide meaningful presentation. The utilization rate represents the number of contractholders taking withdrawals in addition to the amount and timing of the withdrawals. The mortality rate is an input based on an appropriate industry mortality table. September 30, 2025 December 31, 2024 Weighted- Weighted- Range of inputs Average Range of inputs Average Retirement and Income Solutions: Individual variable annuities Long-term interest rate (1) 4.71 - 4.73 % 4.72 % 4.78 - 4.85 % 4.81 % Long-term equity market volatility 17.80 - 38.41 % 22.00 % 18.10 - 35.53 % 21.76 % Nonperformance risk 0.43 - 1.03 % 0.87 % 0.40 - 1.10 % 0.89 % Lapse rate 0.90 - 55.00 % 6.26 % 0.90 - 55.00 % 5.79 % (1) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an interpolation between various observable swap rates. 11. Reinsurance We reinsure a portion of the insurance risks associated with our individual disability, traditional life, universal life, medical and long-term care insurance as well as retail fixed annuity contracts with significant life insurance risk through reinsurance agreements with unaffiliated reinsurance companies, primarily on a quota share, excess loss, yearly renewable term (“YRT”) or coinsurance basis. We have coinsurance with funds withheld reinsurance agreements in which we cede our U.S. retail fixed annuity and ULSG blocks of business using both the reinsurance and deposit methods of accounting. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of September 30, 2025, and December 31, 2024, we had $ 14,961.8 million and $ 14,592.6 million of reinsurance recoverable assets, respectively, included in reinsurance recoverable and deposit receivable on the consolidated statements of financial position, which does not reflect potentially offsetting impacts of collateral. As of September 30, 2025, and December 31, 2024, we had $ 26.5 million and $ 60.3 million of reinsurance recoverable liabilities, respectively, included in future policy benefits and claims on the consolidated statements of financial position. The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows: For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 (in millions) Premiums and other considerations: Direct $ 1,661.4 $ 1,535.6 $ 5,082.9 $ 5,405.4 Ceded ( 128.6 ) ( 122.7 ) ( 402.3 ) ( 381.3 ) Net premiums and other considerations $ 1,532.8 $ 1,412.9 $ 4,680.6 $ 5,024.1 Benefits, claims and settlement expenses: Direct $ 2,356.8 $ 2,209.4 $ 7,277.1 $ 7,475.6 Ceded (1) ( 392.7 ) ( 431.3 ) ( 1,253.1 ) ( 1,549.9 ) Net benefits, claims and settlement expenses $ 1,964.1 $ 1,778.1 $ 6,024.0 $ 5,925.7 LFPB remeasurement loss: Direct $ 51.8 $ 221.5 $ 46.1 $ 253.9 Ceded (1) 9.1 ( 99.0 ) 12.7 311.7 Net LFPB remeasurement loss $ 60.9 $ 122.5 $ 58.8 $ 565.6 (1) Includes the one-time impact of YRT reinsurance transactions in 2024. 78 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) As of September 30, 2025 and December 31, 2024, we had a $ 4,295.8 million and $ 4,897.5 million reinsurance deposit receivable, respectively. Refer to Note 4, Investments, for information on our financing receivables valuation allowance related to the reinsurance recoverable and deposit receivable. Cost of Reinsurance A reinsurance asset or liability is established to spread the expected net reinsurance costs or profits over the expected term of the contracts. The cost of reinsurance asset and liability are reported in premiums due and other receivables and liability for future policy benefits and claims, respectively, on the consolidated statements of financial position. The cost of reinsurance asset and liability included on the consolidated statements of financial position were as follows: September 30, 2025 December 31, 2024 (in millions) Cost of reinsurance asset $ 3,126.5 $ 3,187.6 Cost of reinsurance liability $ 982.5 $ 958.1 Cost of reinsurance amortization, including the impacts of remeasurement, of $ 39.7 million and $ 55.1 million for the three months ended September 30, 2025 and 2024, and $ 84.3 million and $ 514.2 million for the nine months ended September 30, 2025 and 2024, respectively, was reported in benefits, claims and settlement expenses and liability for future policy benefits remeasurement (gain) loss on the consolidated statements of operations. The 2024 impacts of remeasurement include the one-time impact of YRT reinsurance transactions. Funds Withheld The following assets were held in support of our reserves associated with our coinsurance with funds withheld agreements and are reported in the line items shown on the consolidated statements of financial position. September 30, 2025 December 31, 2024 (in millions) Fixed maturities, available-for-sale $ 13,509.8 $ 13,519.6 Fixed maturities, trading 320.6 299.4 Equity securities 0.3 0.3 Mortgage loans 2,074.2 2,212.4 Other investments 1,575.2 1,142.8 Cash and cash equivalents 658.3 1,080.1 Accrued interest income 164.0 166.2 Net other liabilities ( 56.3 ) ( 99.4 ) Net assets $ 18,246.1 $ 18,321.4 Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. As of September 30, 2025 and December 31, 2024, we had a $ 18,113.2 million and $ 18,103.7 million funds withheld payable, which was net of a $ 2,559.2 million and $ 3,014.5 million embedded derivative asset, respectively. The change in fair value of the embedded derivative was a gain (loss) of $( 265.9 ) million and $( 776.8 ) million for the three months ended September 30, 2025 and 2024, respectively, and $( 455.3 ) million and $( 346.9 ) million for the nine months ended September 30, 2025 and 2024, respectively. While the economic benefits of the funds withheld assets flow to the reinsurer, we retain legal ownership of the assets within the funds withheld account. Guidelines are in place to ensure the investment risk is appropriately managed. Net investment income and net realized capital gains (losses) related to the assets on the consolidated statements of operations is reported net of the amounts that flow to the reinsurer. The realized gains and losses that do not flow to the reinsurer are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. 79 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Following are the components of net realized capital gains (losses) on the funds withheld assets that were passed to the reinsurer. For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Fixed maturities, available-for-sale $ 1.3 $ ( 10.8 ) $ ( 46.2 ) $ ( 52.0 ) Fixed maturities, trading — — 0.1 — Mortgage loans ( 0.1 ) ( 1.8 ) ( 1.4 ) ( 1.8 ) Derivatives ( 0.4 ) ( 0.5 ) ( 2.1 ) 1.3 Net realized capital gains (losses) $ 0.8 $ ( 13.1 ) $ ( 49.6 ) $ ( 52.5 ) 12. Long-Term Debt The components of long-term debt were as follows: September 30, 2025 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.1 % notes payable, due 2026 $ 350.0 $ ( 0.4 ) $ 349.6 4.111 % notes payable, due 2028 400.0 ( 10.9 ) 389.1 3.7 % notes payable, due 2029 500.0 ( 2.6 ) 497.4 2.125 % notes payable, due 2030 600.0 ( 2.4 ) 597.6 5.375 % notes payable, due 2033 400.0 ( 3.2 ) 396.8 6.05 % notes payable, due 2036 505.6 ( 1.9 ) 503.7 4.625 % notes payable, due 2042 300.0 ( 2.7 ) 297.3 4.35 % notes payable, due 2043 300.0 ( 2.7 ) 297.3 4.3 % notes payable, due 2046 300.0 ( 2.9 ) 297.1 5.5 % notes payable, due 2053 300.0 ( 4.2 ) 295.8 Non-recourse mortgages and notes payable 3.0 ( 0.1 ) 2.9 Total long-term debt $ 3,958.6 $ ( 34.0 ) $ 3,924.6 80 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) December 31, 2024 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.4 % notes payable, due 2025 $ 400.0 $ ( 0.2 ) $ 399.8 3.1 % notes payable, due 2026 350.0 ( 0.7 ) 349.3 3.7 % notes payable, due 2029 500.0 ( 3.1 ) 496.9 2.125 % notes payable, due 2030 600.0 ( 2.8 ) 597.2 5.375 % notes payable, due 2033 400.0 ( 3.5 ) 396.5 6.05 % notes payable, due 2036 505.6 ( 2.0 ) 503.6 4.625 % notes payable, due 2042 300.0 ( 2.7 ) 297.3 4.35 % notes payable, due 2043 300.0 ( 2.8 ) 297.2 4.3 % notes payable, due 2046 300.0 ( 2.9 ) 297.1 5.5 % notes payable, due 2053 300.0 ( 4.3 ) 295.7 Secured credit facilities 21.8 — 21.8 Non-recourse mortgages and notes payable 3.0 ( 0.1 ) 2.9 Total long-term debt $ 3,980.4 $ ( 25.1 ) $ 3,955.3 Net discount, premium and issuance costs associated with issuing these notes are amortized to expense over the respective terms using the interest method. Contingent Funding Agreements for Senior Debt Issuance On March 8, 2018, we entered into two contingent funding agreements: (1) a 10-year contingent funding agreement with a Delaware trust (“2028 Trust”) formed by us in connection with the sale by the trust of $ 400.0 million pre-capitalized trust securities redeemable February 15, 2028 (“2028 P-Caps”) in a Rule 144A private placement and (2) a 30-year contingent funding agreement with a Delaware trust (“2048 Trust”) formed by us in connection with the sale by the trust of $ 350.0 million pre-capitalized trust securities redeemable February 15, 2048 (“2048 P-Caps”) in a Rule 144A private placement. The trusts invested the proceeds from the sale of the 2028 P-Caps and 2048 P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities. The contingent funding agreements provide us a put option that gives us the right to sell at any time: (1) to the 2028 Trust up to $ 400.0 million of its 4.111 % Senior Notes due 2028 (“ 4.111 % Senior Notes”) and (2) to the 2048 Trust up to $ 350.0 million of its 4.682 % Senior Notes due 2048 (“ 4.682 % Senior Notes”) and receive in exchange a corresponding amount of the principal and interest strips of U.S. Treasury securities held by the trusts (“Eligible Assets”). The 4.682 % Senior Notes will not be issued unless and until a put option is exercised, while the put option for the 4.111 % Senior Notes was exercised on March 19, 2025. We agreed to pay a semi-annual put premium of 1.275 % and 1.580 % per annum on the unexercised portion of the put option to the 2028 Trust and 2048 Trust, respectively, and to reimburse the trusts for expenses. The put option premiums are recorded in operating expenses in the consolidated statements of operations. The 4.111 % Senior Notes and 4.682 % Senior Notes will be fully, irrevocably and unconditionally guaranteed by Principal Financial Services, Inc. (“PFS”). In addition, our obligations under the put option agreement and the expense reimbursement agreement with the trusts are also guaranteed by PFS. The contingent funding agreements with the trusts provide us with a source of liquid assets, which could be used to meet future financial obligations or to provide additional capital. On March 19, 2025, we completed the exercise of our rights in full under the put option with the 2028 Trust in exchange for the Eligible Assets (the “2028 P-Caps Exercise”). In connection with the exercise of our put options right, we (1) issued $ 400.0 million of 4.111 % Senior Notes due 2028 (“2028 Notes”) to the 2028 Trust (2) waived our rights to repurchase the 2028 Notes and (3) directed The Bank of New York Mellon to dissolve the 2028 Trust in accordance with its declaration of trust and deliver the 2028 Notes to the beneficial holders of the 2028 P-Caps pro rata in respect of each 2028 P-Cap. We used the proceeds from the 2028 P-Caps Exercise to repay at maturity all $ 400.0 million aggregate principal amount outstanding of our 3.400 % senior notes that matured on May 15, 2025 (the “2025 Notes”), in accordance with the terms of the indenture governing the 2025 Notes. 81 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) In addition, on March 6, 2025, we entered into a 30-year contingent funding agreement with a Delaware trust (“2055 Trust”) formed by us in connection with the sale by the trust of $ 500.0 million pre-capitalized trust securities redeemable February 15, 2055 (“2055 P-Caps”) in a Rule 144A private placement. The trusts invested the proceeds from the sale of the 2055 P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities. The contingent funding agreements provide us the right to sell at any time to the 2055 Trust up to $ 500.0 million of its 5.807 % Senior Notes due 2055 (“ 5.807 % Senior Notes”) and receive in exchange a corresponding amount of the principal and interest strips of U.S. Treasury securities held by the trusts. The 5.807 % Senior Notes will not be issued unless and until we exercise our issuance right. We agreed to pay a semi-annual facility fee of 1.289 % per annum on the unexercised portion of the contingent fund mechanism to the 2055 Trust (the “facility agreement”), respectively, and to reimburse the trusts for expenses. The facility fee paid under the facility agreement is recorded in operating expenses in the consolidated statements of operations. The 5.807 % Senior Notes will be fully, irrevocably and unconditionally guaranteed by PFS. In addition, our obligations under the facility agreement and the expense reimbursement agreement with the trusts are also guaranteed by PFS. 13. Income Taxes Effective Income Tax Rate Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the income tax provision at the U.S. corporate income tax rate and the income tax expense (benefit) at the effective income tax rate was as follows: For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 ($ in millions) Income before income taxes $ 248.4 $ ( 293.8 ) $ 780.4 $ 777.2 Expected tax at the U.S. statutory rate $ 52.2 $ ( 61.7 ) $ 163.9 $ 163.2 Tax credits ( 19.1 ) ( 19.9 ) ( 71.3 ) ( 54.8 ) Dividends received deduction ( 23.1 ) ( 19.3 ) ( 61.1 ) ( 57.0 ) Impact of equity method presentation ( 7.2 ) ( 9.8 ) ( 18.0 ) ( 20.9 ) Interest exclusion from taxable income ( 6.2 ) ( 5.9 ) ( 17.1 ) ( 17.8 ) Impact of noncontrolling interest presentation ( 4.3 ) ( 5.6 ) ( 13.1 ) ( 6.3 ) Changes in unrecognized tax benefits – Tax Cuts and Jobs Act of 2017 rate change — — ( 5.4 ) — Local country permanent tax adjustments 0.3 ( 6.6 ) ( 2.5 ) ( 4.4 ) Low income housing tax credit amortization 9.7 11.9 34.1 32.9 State income taxes 6.5 5.3 18.2 27.4 Foreign country statutory rate differential 4.1 6.0 17.1 2.8 Valuation allowance 2.2 3.3 3.5 18.7 Other ( 0.6 ) 1.9 1.8 ( 2.0 ) Income taxes $ 14.5 $ ( 100.4 ) $ 50.1 $ 81.8 Effective income tax rate 6 % 34 % 6 % 11 % Unrecognized Tax Benefits During the second quarter 2025, we recognized a $ 5.4 million tax benefit upon releasing an unrecognized tax benefit (“UTB”) at the 35 % federal rate in force before the Tax Cuts and Jobs Act of 2017 (“TCJA”). The UTB was previously remeasured to the current U.S. tax rate of 21 % upon enactment of TCJA. 82 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Recent Change in 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 third quarter 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. Pillar Two Model Rules We are currently monitoring global enactments of the Pillar Two model rules proposed by the Organisation for Economic Co-operation and Development, which brings forward a 15% global minimum tax. 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. 14. Employee and Agent Benefits Components of Net Periodic Benefit Cost Other postretirement Pension benefits benefits For the three months ended For the three months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Service cost $ 14.8 $ 14.8 $ — $ — Interest cost 43.4 40.3 0.8 0.8 Expected return on plan assets ( 43.0 ) ( 42.6 ) ( 1.2 ) ( 1.0 ) Amortization of prior service benefit ( 3.9 ) ( 4.2 ) ( 0.2 ) ( 0.3 ) Recognized net actuarial (gain) loss 8.7 9.8 ( 0.4 ) ( 0.3 ) Net periodic benefit cost (income) $ 20.0 $ 18.1 $ ( 1.0 ) $ ( 0.8 ) Other postretirement Pension benefits benefits For the nine months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Service cost $ 44.5 $ 44.4 $ — $ — Interest cost 130.2 121.1 2.3 2.3 Expected return on plan assets ( 129.0 ) ( 127.8 ) ( 3.5 ) ( 3.3 ) Amortization of prior service benefit ( 11.4 ) ( 12.5 ) ( 0.8 ) ( 0.8 ) Recognized net actuarial (gain) loss 26.1 29.2 ( 1.1 ) ( 0.8 ) Net periodic benefit cost (income) $ 60.4 $ 54.4 $ ( 3.1 ) $ ( 2.6 ) The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations. 83 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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 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. We do not anticipate contributions will be needed to satisfy the minimum funding requirements of ERISA for our qualified plan in 2025; however, it is possible that we may fund both the qualified and nonqualified pension plans in 2025 for a combined total of up to $ 70.0 million. During the three and nine months ended September 30, 2025, we contributed $ 25.6 million and $ 58.6 million, respectively, to these plans. 15. Contingencies, Guarantees and Indemnifications 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 September 30, 2025. 84 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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 September 30, 2025, was approximately $ 83.0 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 September 30, 2025, was $ 850.0 million. See Note 12, Long-Term 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. 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. 85 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 16 . Stockholders’ Equity Common Stock Dividends For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 Dividends declared per common share $ 0.78 $ 0.72 $ 2.29 $ 2.12 Reconciliation of Outstanding Common Shares For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 Beginning balance 223,185,689 232,293,387 226,225,161 236,438,294 Shares issued 173,489 178,639 2,009,845 2,013,575 Treasury stock acquired ( 2,842,368 ) ( 3,180,724 ) ( 7,718,196 ) ( 9,160,567 ) Ending balance 220,516,810 229,291,302 220,516,810 229,291,302 In January 2022, our Board of Directors (“Board”) authorized a $ 1.6 billion increase to the June 2021 share repurchase program authorization, which 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 has no expiration date. 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. 86 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Other Comprehensive Income For the three months ended For the nine months ended September 30, 2025 September 30, 2025 Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 863.9 $ ( 187.0 ) $ 676.9 $ 1,804.2 $ ( 385.5 ) $ 1,418.7 Reclassification adjustment for losses included in net income (1) 21.0 ( 4.3 ) 16.7 128.0 ( 26.9 ) 101.1 Adjustments for assumed changes in amortization patterns ( 0.8 ) 0.1 ( 0.7 ) ( 1.3 ) 0.3 ( 1.0 ) Adjustments for assumed changes in policyholder liabilities ( 1.7 ) 0.4 ( 1.3 ) 14.0 ( 2.9 ) 11.1 Net unrealized gains on available-for-sale securities 882.4 ( 190.8 ) 691.6 1,944.9 ( 415.0 ) 1,529.9 Net unrealized gains (losses) on derivative instruments during the period 90.8 ( 19.0 ) 71.8 ( 98.7 ) 20.7 ( 78.0 ) Reclassification adjustment for gains included in net income (2) ( 3.1 ) 0.6 ( 2.5 ) ( 4.3 ) 0.9 ( 3.4 ) Adjustments for assumed changes in amortization patterns — — — 0.1 — 0.1 Net unrealized gains (losses) on derivative instruments 87.7 ( 18.4 ) 69.3 ( 102.9 ) 21.6 ( 81.3 ) Liability for future policy benefits discount rate remeasurement loss (3) ( 460.5 ) 97.2 ( 363.3 ) ( 880.1 ) 184.5 ( 695.6 ) Market risk benefit nonperformance risk remeasurement loss (4) ( 5.9 ) 1.3 ( 4.6 ) ( 3.7 ) 0.8 ( 2.9 ) Foreign currency translation adjustment 2.8 3.4 6.2 166.5 ( 4.6 ) 161.9 Unrecognized postretirement benefit obligation during the period 0.1 ( 0.1 ) — ( 13.5 ) 3.4 ( 10.1 ) Amortization of amounts included in net periodic benefit cost (5) 4.2 ( 1.1 ) 3.1 12.8 ( 3.3 ) 9.5 Net unrecognized postretirement benefit obligation 4.3 ( 1.2 ) 3.1 ( 0.7 ) 0.1 ( 0.6 ) Other comprehensive income $ 510.8 $ ( 108.5 ) $ 402.3 $ 1,124.0 $ ( 212.6 ) $ 911.4 87 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the three months ended For the nine months ended September 30, 2024 September 30, 2024 Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 2,695.3 $ ( 581.8 ) $ 2,113.5 $ 1,467.0 $ ( 314.0 ) $ 1,153.0 Reclassification adjustment for losses included in net income (1) 10.7 ( 2.3 ) 8.4 98.0 ( 20.6 ) 77.4 Adjustments for assumed changes in amortization patterns 2.1 ( 0.4 ) 1.7 6.8 ( 1.4 ) 5.4 Adjustments for assumed changes in policyholder liabilities ( 10.9 ) 2.3 ( 8.6 ) ( 0.2 ) — ( 0.2 ) Net unrealized gains on available-for-sale securities 2,697.2 ( 582.2 ) 2,115.0 1,571.6 ( 336.0 ) 1,235.6 Net unrealized gains (losses) on derivative instruments during the period ( 47.9 ) 10.0 ( 37.9 ) 6.6 ( 1.4 ) 5.2 Reclassification adjustment for gains included in net income (2) ( 0.9 ) 0.2 ( 0.7 ) ( 2.7 ) 0.6 ( 2.1 ) Adjustments for assumed changes in amortization patterns 0.7 ( 0.1 ) 0.6 0.5 ( 0.1 ) 0.4 Net unrealized gains (losses) on derivative instruments ( 48.1 ) 10.1 ( 38.0 ) 4.4 ( 0.9 ) 3.5 Liability for future policy benefits discount rate remeasurement loss (3) ( 1,699.8 ) 382.4 ( 1,317.4 ) ( 487.7 ) 118.5 ( 369.2 ) Market risk benefit nonperformance risk remeasurement loss (4) ( 6.8 ) 1.5 ( 5.3 ) ( 16.4 ) 3.5 ( 12.9 ) Foreign currency translation adjustment 67.0 4.0 71.0 ( 108.3 ) 3.2 ( 105.1 ) Unrecognized postretirement benefit obligation during the period — — — ( 3.0 ) 0.8 ( 2.2 ) Amortization of amounts included in net periodic benefit cost (5) 5.0 ( 1.3 ) 3.7 15.1 ( 3.9 ) 11.2 Net unrecognized postretirement benefit obligation 5.0 ( 1.3 ) 3.7 12.1 ( 3.1 ) 9.0 Other comprehensive income $ 1,014.5 $ ( 185.5 ) $ 829.0 $ 975.7 $ ( 214.8 ) $ 760.9 (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 9, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details. (4) See Note 10, Market Risk Benefits, for further details. (5) 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 14, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. 88 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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 July 1, 2024 $ ( 4,894.2 ) $ 39.4 $ 1,376.4 $ ( 14.5 ) $ ( 1,672.5 ) $ ( 246.4 ) $ ( 5,411.8 ) Other comprehensive income during the period, net of adjustments 2,106.5 ( 37.3 ) ( 1,317.4 ) ( 5.3 ) 68.9 — 815.4 Amounts reclassified from AOCI 8.4 ( 0.7 ) — — — 3.7 11.4 Other comprehensive income 2,114.9 ( 38.0 ) ( 1,317.4 ) ( 5.3 ) 68.9 3.7 826.8 Balances as of September 30, 2024 $ ( 2,779.3 ) $ 1.4 $ 59.0 $ ( 19.8 ) $ ( 1,603.6 ) $ ( 242.7 ) $ ( 4,585.0 ) Balances as of July 1, 2025 $ ( 3,854.6 ) $ ( 98.8 ) $ 1,105.9 $ ( 13.3 ) $ ( 1,627.8 ) $ ( 224.7 ) $ ( 4,713.3 ) Other comprehensive income during the period, net of adjustments 674.9 71.8 ( 363.3 ) ( 4.6 ) 10.6 — 389.4 Amounts reclassified from AOCI 16.7 ( 2.5 ) — — — 3.1 17.3 Other comprehensive income 691.6 69.3 ( 363.3 ) ( 4.6 ) 10.6 3.1 406.7 Balances as of September 30, 2025 $ ( 3,163.0 ) $ ( 29.5 ) $ 742.6 $ ( 17.9 ) $ ( 1,617.2 ) $ ( 221.6 ) $ ( 4,306.6 ) 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, 2024 $ ( 4,014.8 ) $ ( 2.1 ) $ 428.2 $ ( 6.9 ) $ ( 1,498.0 ) $ ( 251.7 ) $ ( 5,345.3 ) Other comprehensive income during the period, net of adjustments 1,158.1 5.6 ( 369.2 ) ( 12.9 ) ( 105.6 ) ( 2.2 ) 673.8 Amounts reclassified from AOCI 77.4 ( 2.1 ) — — — 11.2 86.5 Other comprehensive income 1,235.5 3.5 ( 369.2 ) ( 12.9 ) ( 105.6 ) 9.0 760.3 Balances as of September 30, 2024 $ ( 2,779.3 ) $ 1.4 $ 59.0 $ ( 19.8 ) $ ( 1,603.6 ) $ ( 242.7 ) $ ( 4,585.0 ) Balances as of January 1, 2025 $ ( 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 1,428.8 ( 77.9 ) ( 695.6 ) ( 2.9 ) 168.7 ( 10.1 ) 811.0 Amounts reclassified from AOCI 101.1 ( 3.4 ) — — — 9.5 107.2 Other comprehensive income 1,529.9 ( 81.3 ) ( 695.6 ) ( 2.9 ) 168.7 ( 0.6 ) 918.2 Balances as of September 30, 2025 $ ( 3,163.0 ) $ ( 29.5 ) $ 742.6 $ ( 17.9 ) $ ( 1,617.2 ) $ ( 221.6 ) $ ( 4,306.6 ) (1) Net unrealized losses on available-for-sale securities for which an allowance for credit loss has been recorded were $ 4.7 million and $ 2.6 million as of September 30, 2025 and 2024, 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. 89 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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. Following is a reconciliation of the changes in the redeemable noncontrolling interest: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Balance at beginning of period $ 391.2 $ 277.4 $ 337.7 $ 248.9 Net income attributable to redeemable noncontrolling interest 18.4 14.3 55.8 15.1 Redeemable noncontrolling interest of deconsolidated entities (1) — — ( 22.9 ) ( 185.5 ) Contributions from redeemable noncontrolling interest 18.4 34.2 107.3 275.3 Distributions to redeemable noncontrolling interest ( 11.0 ) ( 14.8 ) ( 56.1 ) ( 42.8 ) Purchase of subsidiary shares from redeemable noncontrolling interest ( 2.9 ) — ( 4.5 ) ( 0.6 ) Change in redemption value of redeemable noncontrolling interest — ( 0.7 ) — 0.4 Stock-based compensation attributable to redeemable noncontrolling interest — — 0.1 0.1 Other comprehensive income (loss) attributable to redeemable noncontrolling interest ( 4.0 ) 1.4 ( 7.3 ) 0.9 Balance at end of period $ 410.1 $ 311.8 $ 410.1 $ 311.8 (1) We deconsolidated certain sponsored investment funds as they no longer met the requirements for consolidation . 17. 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. 90 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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. 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 September 30, 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. 91 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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. 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. 92 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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 we held used an accrual method comparing both cash flows to determine fair value. These were 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. 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. 93 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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. 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 10, 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. 94 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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. 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: September 30, 2025 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,716.8 $ — $ 1,339.2 $ 377.6 $ — Non-U.S. governments 518.1 — — 518.1 — States and political subdivisions 6,785.5 — — 6,717.3 68.2 Corporate 36,985.2 — 29.1 34,540.7 2,415.4 Residential mortgage-backed pass-through securities 3,716.6 — — 3,716.6 — Commercial mortgage-backed securities 5,122.2 — — 5,119.7 2.5 Collateralized debt obligations (1) 6,524.3 — — 6,524.3 — Other debt obligations 9,954.2 — — 8,223.0 1,731.2 Total fixed maturities, available-for-sale 71,322.9 — 1,368.3 65,737.3 4,217.3 Fixed maturities, trading 1,356.8 — 0.2 856.2 500.4 Equity securities 1,649.0 — 252.9 1,396.1 — Derivative assets (2) 1,037.9 — — 1,024.4 13.5 Other investments 1,057.1 104.7 325.1 490.8 136.5 Cash equivalents 3,528.3 — 170.4 3,357.9 — Market risk benefit asset (3) 187.5 — — — 187.5 Sub-total excluding separate account assets 80,139.5 104.7 2,116.9 72,862.7 5,055.2 Separate account assets 189,251.5 7,588.2 121,409.3 59,510.6 743.4 Total assets $ 269,391.0 $ 7,692.9 $ 123,526.2 $ 132,373.3 $ 5,798.6 Liabilities Investment and universal life contracts (4) $ ( 1,228.8 ) $ — $ — $ — $ ( 1,228.8 ) Market risk benefit liability (3) ( 69.1 ) — — — ( 69.1 ) Funds withheld payable embedded derivative (4) 2,559.2 — — — 2,559.2 Derivative liabilities (2) ( 523.2 ) — — ( 514.6 ) ( 8.6 ) Other liabilities ( 0.8 ) — ( 0.8 ) — — Total liabilities $ 737.3 $ — $ ( 0.8 ) $ ( 514.6 ) $ 1,252.7 Net assets $ 270,128.3 $ 7,692.9 $ 123,525.4 $ 131,858.7 $ 7,051.3 95 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) December 31, 2024 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level 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 10, 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 $ 3.1 million and $ 3.1 million as of September 30, 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. 96 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 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 three months ended September 30, 2025 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of July 1, net income comprehensive settlements into out of September 30, 2025 (2) income (3) (4) Level 3 Level 3 2025 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 67.8 $ — $ 0.9 $ ( 0.5 ) $ — $ — $ 68.2 Corporate 2,444.0 ( 21.5 ) 3.8 ( 10.9 ) — — 2,415.4 Commercial mortgage-backed securities 2.6 — — ( 0.1 ) — — 2.5 Other debt obligations 1,813.4 — 2.5 9.5 — ( 94.2 ) 1,731.2 Total fixed maturities, available-for-sale 4,327.8 ( 21.5 ) 7.2 ( 2.0 ) — ( 94.2 ) 4,217.3 Fixed maturities, trading 491.9 ( 3.4 ) — 11.9 — — 500.4 Other investments 119.3 ( 2.5 ) — 19.7 — — 136.5 Separate account assets (1) 741.4 2.0 — — — — 743.4 Liabilities Investment and universal life contracts ( 863.7 ) ( 222.2 ) — ( 142.9 ) — — ( 1,228.8 ) Funds withheld payable embedded derivative 2,825.2 ( 266.0 ) — — — — 2,559.2 Derivatives Net derivative assets (liabilities) ( 13.1 ) 18.3 — ( 0.3 ) — — 4.9 97 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the three months ended September 30, 2024 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of July 1, net income comprehensive settlements into out of September 30, 2024 (2) income (3) (4) Level 3 Level 3 2024 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 85.0 $ — $ 3.6 $ ( 0.4 ) $ — $ ( 17.9 ) $ 70.3 Corporate 2,228.6 8.5 35.0 34.3 — — 2,306.4 Commercial mortgage-backed securities 2.8 — 0.1 ( 0.1 ) — — 2.8 Collateralized debt obligations 104.7 — 3.0 ( 13.8 ) — — 93.9 Other debt obligations 1,349.9 0.1 14.2 ( 96.1 ) 4.6 — 1,272.7 Total fixed maturities, available-for-sale 3,771.0 8.6 55.9 ( 76.1 ) 4.6 ( 17.9 ) 3,746.1 Fixed maturities, trading 445.2 7.5 — 40.1 — — 492.8 Other investments 173.5 ( 5.3 ) — ( 26.7 ) — — 141.5 Separate account assets (1) 718.4 2.2 — ( 6.8 ) — — 713.8 Liabilities Investment and universal life contracts ( 230.0 ) ( 23.8 ) — ( 114.2 ) — — ( 368.0 ) Funds withheld payable embedded derivative 2,997.0 ( 776.8 ) — — — — 2,220.2 Derivatives Net derivative assets (liabilities) 2.0 4.5 — 2.8 ( 0.1 ) — 9.2 For the nine months ended September 30, 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 September 30, 2025 (2) income (3) (4) Level 3 Level 3 2025 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 66.8 $ — $ 2.8 $ ( 1.4 ) $ — $ — $ 68.2 Corporate 2,350.4 ( 5.6 ) ( 4.1 ) 74.7 — — 2,415.4 Commercial mortgage-backed securities 2.7 — 0.1 ( 0.3 ) — — 2.5 Other debt obligations 1,478.3 0.1 12.8 237.5 121.5 ( 119.0 ) 1,731.2 Total fixed maturities, available-for-sale 3,898.2 ( 5.5 ) 11.6 310.5 121.5 ( 119.0 ) 4,217.3 Fixed maturities, trading 562.6 ( 15.3 ) — ( 42.1 ) — ( 4.8 ) 500.4 Mortgage loans 140.6 — — ( 140.6 ) — — — Other investments 131.2 ( 2.7 ) — 8.0 — — 136.5 Separate account assets (1) 726.7 16.7 — — — — 743.4 Liabilities Investment and universal life contracts ( 578.4 ) ( 221.2 ) — ( 429.2 ) — — ( 1,228.8 ) Funds withheld payable embedded derivative 3,014.5 ( 455.3 ) — — — — 2,559.2 Derivatives Net derivative assets (liabilities) 13.5 ( 9.5 ) — 0.9 — — 4.9 98 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the nine months ended September 30, 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 September 30, 2024 (2) income (3) (4) Level 3 Level 3 2024 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 69.9 $ — $ 1.6 $ 1.2 $ 15.5 $ ( 17.9 ) $ 70.3 Corporate 2,305.9 1.7 6.1 ( 66.2 ) 58.9 — 2,306.4 Commercial mortgage-backed securities 3.0 — 0.1 ( 0.3 ) — — 2.8 Collateralized debt obligations 75.4 — 0.2 18.3 — — 93.9 Other debt obligations 1,182.6 0.1 2.2 59.2 140.2 ( 111.6 ) 1,272.7 Total fixed maturities, available-for-sale 3,636.8 1.8 10.2 12.2 214.6 ( 129.5 ) 3,746.1 Fixed maturities, trading 415.8 5.8 — 71.2 — — 492.8 Other investments 165.1 ( 16.7 ) — ( 6.9 ) — — 141.5 Separate account assets (1) 752.8 ( 30.4 ) — ( 8.6 ) — — 713.8 Liabilities Investment and universal life contracts ( 115.5 ) ( 84.4 ) — ( 168.1 ) — — ( 368.0 ) Funds withheld payable embedded derivative 2,567.1 ( 346.9 ) — — — — 2,220.2 Derivatives Net derivative assets (liabilities) 5.5 ( 0.2 ) — 4.0 ( 0.1 ) — 9.2 (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. 99 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) (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 three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ ( 14.6 ) $ 8.2 $ 6.3 $ 1.0 Other debt obligations — 0.1 — 0.1 Total fixed maturities, available-for-sale ( 14.6 ) 8.3 6.3 1.1 Fixed maturities, trading ( 14.8 ) 5.2 ( 14.9 ) 5.8 Other investments 0.4 ( 2.0 ) 4.7 ( 8.6 ) Separate account assets 32.4 ( 13.5 ) 24.6 ( 20.6 ) Liabilities Investment and universal life contracts ( 214.3 ) ( 64.5 ) ( 219.7 ) ( 79.2 ) Funds withheld payable embedded derivative ( 266.0 ) ( 776.8 ) ( 455.3 ) ( 346.9 ) Derivatives Net derivative assets (liabilities) 20.1 4.3 ( 10.6 ) 0.7 (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 three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 0.9 $ 3.6 $ 2.8 $ 1.7 Corporate 3.5 36.8 ( 5.0 ) 5.7 Commercial mortgage-backed securities — 0.1 0.1 0.1 Collateralized debt obligations — 2.9 — 1.0 Other debt obligations 2.4 14.3 13.5 ( 0.2 ) Total fixed maturities, available-for-sale 6.8 57.7 11.4 8.3 100 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) (4) Gross purchases, sales, issuances and settlements were: For the three months ended September 30, 2025 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 0.5 ) $ ( 0.5 ) Corporate 125.7 ( 28.9 ) — ( 107.7 ) ( 10.9 ) Commercial mortgage-backed securities — — — ( 0.1 ) ( 0.1 ) Other debt obligations 93.1 — — ( 83.6 ) 9.5 Total fixed maturities, available-for-sale 218.8 ( 28.9 ) — ( 191.9 ) ( 2.0 ) Fixed maturities, trading 68.5 ( 22.4 ) — ( 34.2 ) 11.9 Other investments 58.7 — — ( 39.0 ) 19.7 Separate account assets (5) — ( 42.6 ) — 42.6 — Liabilities Investment and universal life contracts — — ( 155.1 ) 12.2 ( 142.9 ) Derivatives Net derivative assets (liabilities) ( 2.2 ) 1.9 — — ( 0.3 ) For the three months ended September 30, 2024 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 0.4 ) $ ( 0.4 ) Corporate 169.1 ( 57.0 ) — ( 77.8 ) 34.3 Commercial mortgage-backed securities — — — ( 0.1 ) ( 0.1 ) Collateralized debt obligations 3.0 — — ( 16.8 ) ( 13.8 ) Other debt obligations 47.2 ( 28.2 ) — ( 115.1 ) ( 96.1 ) Total fixed maturities, available-for-sale 219.3 ( 85.2 ) — ( 210.2 ) ( 76.1 ) Fixed maturities, trading 75.4 ( 27.5 ) — ( 7.8 ) 40.1 Other investments 25.5 — — ( 52.2 ) ( 26.7 ) Separate account assets (5) — — ( 49.5 ) 42.7 ( 6.8 ) Liabilities Investment and universal life contracts — — ( 130.9 ) 16.7 ( 114.2 ) Derivatives Net derivative assets (liabilities) 2.9 ( 0.1 ) — — 2.8 101 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) For the nine months ended September 30, 2025 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ ( 1.4 ) $ ( 1.4 ) Corporate 449.9 ( 184.5 ) — ( 190.7 ) 74.7 Commercial mortgage-backed securities — — — ( 0.3 ) ( 0.3 ) Other debt obligations 606.7 ( 177.7 ) — ( 191.5 ) 237.5 Total fixed maturities, available-for-sale 1,056.6 ( 362.2 ) — ( 383.9 ) 310.5 Fixed maturities, trading 231.1 ( 144.0 ) — ( 129.2 ) ( 42.1 ) Mortgage loans — — — ( 140.6 ) ( 140.6 ) Other investments 119.6 ( 1.5 ) — ( 110.1 ) 8.0 Separate account assets (5) — ( 42.6 ) — 42.6 — Liabilities Investment and universal life contracts — — ( 469.1 ) 39.9 ( 429.2 ) Derivatives Net derivative assets (liabilities) ( 1.3 ) 2.2 — — 0.9 For the nine months ended September 30, 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 $ — $ — $ ( 1.3 ) $ 1.2 Corporate 446.5 ( 296.4 ) — ( 216.3 ) ( 66.2 ) Commercial mortgage-backed securities — — — ( 0.3 ) ( 0.3 ) Collateralized debt obligations 35.1 — — ( 16.8 ) 18.3 Other debt obligations 306.6 ( 87.3 ) — ( 160.1 ) 59.2 Total fixed maturities, available-for-sale 790.7 ( 383.7 ) — ( 394.8 ) 12.2 Fixed maturities, trading 296.5 ( 148.0 ) — ( 77.3 ) 71.2 Other investments 144.2 — — ( 151.1 ) ( 6.9 ) Separate account assets (5) — ( 30.3 ) ( 60.0 ) 81.7 ( 8.6 ) Liabilities Investment and universal life contracts — — ( 221.0 ) 52.9 ( 168.1 ) Derivatives Net derivative assets (liabilities) 3.2 0.8 — — 4.0 (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. 102 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: