FULLTEXT DEL 5 AV 6
10-Q – 2025-10-29 – pfg-20250930x10q.htm
For the three months ended September 30, 2025 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Other debt obligations $ — $ — $ — $ 94.2 Total fixed maturities, available-for-sale — — — 94.2 For the three months ended September 30, 2024 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ 17.9 Other debt obligations — 4.6 — — Total fixed maturities, available-for-sale — 4.6 — 17.9 Derivatives Net derivative assets (liabilities) — ( 0.1 ) — — For the nine months ended September 30, 2025 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Other debt obligations $ — $ 121.5 $ — $ 119.0 Total fixed maturities, available-for-sale — 121.5 — 119.0 Fixed maturities, trading — — — 4.8 103 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 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ 15.5 $ — $ 17.9 Corporate — 58.9 — — Other debt obligations — 140.2 — 111.6 Total fixed maturities, available-for-sale — 214.6 — 129.5 Derivatives Net derivative assets (liabilities) — ( 0.1 ) — — Assets transferred into Level 3 during 2025 and 2024 primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations. Assets transferred out of Level 3 during 2025 and 2024 primarily included those assets for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes. The MRB asset and liability are excluded from the table. Refer to Note 10, Market Risk Benefits, for information on the unobservable inputs used for fair value measurement of MRBs. The funds withheld payable embedded derivative is excluded from the table as the determination of its fair value incorporates the fair value of the invested assets supporting the reinsurance agreement. The commercial mortgage loans of a consolidated VIE are excluded from the table as the determination of fair value was based on transaction price due to proximity of purchase to year-end, and thus no inputs to be provided. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary. 104 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) September 30, 2025 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 2,032.1 Discounted cash flow Discount rate (1) 2.7 % - 12.2 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Illiquidity premium 30 basis points (“bps”) - 771 bps 146 bps Comparability adjustment ( 333 ) bps - 1,984 bps 120 bps Other debt obligations 1,731.2 Discounted cash flow Discount rate (1) 3.4 % - 8.2 % 4.3 % Illiquidity premium ( 83 ) bps - 415 bps 179 bps Comparability adjustment ( 10 ) bps - 294 bps 64 bps Fixed maturities, trading 295.2 Discounted cash flow Discount rate (1) 8.8 % - 13.0 % 9.3 % Earnings before interest, taxes, depreciation and amortization multiple 0.9 x 0.9 x Comparability adjustment ( 333 ) bps - 1,923 bps 133 bps Other investments 136.3 Discounted cash flow Discount rate (1) 10.0 % - 13.5 % 10.9 % Probability of default 6.0 % - 10.0 % 7.1 % Potential loss severity 80.0 % - 100.0 % 82.7 % Separate account assets 743.4 Discounted cash flow - real estate Discount rate (1) 6.8 % - 10.0 % 7.3 % Terminal capitalization rate 5.5 % - 9.5 % 6.0 % Average market rent growth rate 1.8 % - 3.2 % 2.7 % Discounted cash flow - real estate debt Loan to value 45.7 % - 68.2 % 52.6 % Market interest rate 5.1 % - 6.3 % 5.7 % Liabilities Investment and universal life contracts (4) ( 1,228.8 ) Discounted cash flow Long duration interest rate 3.6 % - 4.7 % (2) 4.7 % Long-term equity market volatility 16.3 % - 37.3 % 22.3 % Nonperformance risk 0.4 % - 1.0 % 0.8 % Lapse rate 0.0 % - 55.0 % 8.0 % Mortality rate See note (3) 105 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) December 31, 2024 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 1,817.8 Discounted cash flow Discount rate (1) 2.1 % - 12.7 % 8.0 % Earnings before interest, taxes, depreciation and amortization multiple 1.1 x - 1.7 x 1.3 x Illiquidity premium 30 bps - 791 bps 142 bps Comparability adjustment ( 42 ) bps - 2,947 bps 149 bps Other debt obligations 1,343.1 Discounted cash flow Discount rate (1) 4.9 % - 7.7 % 5.4 % Illiquidity premium ( 83 ) bps - 260 bps 120 bps Comparability adjustment ( 19 ) bps - 415 bps 128 bps Fixed maturities, trading 289.6 Discounted cash flow Discount rate (1) 9.5 % - 13.0 % 9.9 % Earnings before interest, taxes, depreciation and amortization multiple 1.1 x 1.1 x Comparability adjustment ( 32 ) bps - 2,947 bps 152 bps Other investments 129.0 Discounted cash flow Discount rate (1) 11.5 % - 13.5 % 12.4 % Probability of default 6.0 % - 10.0 % 8.1 % Potential loss severity 87.0 % - 100.0 % 92.0 % Separate account assets 726.7 Discounted cash flow - real estate Discount rate (1) 7.0 % - 11.0 % 7.2 % Terminal capitalization rate 5.5 % - 9.5 % 6.0 % Average market rent growth rate 2.0 % - 4.5 % 2.7 % Discounted cash flow - real estate debt Loan to value 46.4 % - 69.5 % 59.2 % Market interest rate 4.9 % - 7.2 % 6.1 % Liabilities Investment and universal life contracts (4) ( 578.4 ) Discounted cash flow Long duration interest rate 3.0 % - 4.9 % (2) 4.8 % Long-term equity market volatility 14.5 % - 49.3 % 21.4 % Nonperformance risk 0.4 % - 1.1 % 0.8 % Lapse rate 0.0 % - 55.0 % 8.5 % Mortality rate See note (3) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable. (2) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. 106 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Market comparable discount rates are used as the base rate in the discounted cash flows used to determine the fair value of certain assets. The use of a higher or lower discount rate would have caused the fair value of the assets to significantly decrease or increase, respectively. Additionally, we may adjust the base discount rate or the modeled price by applying an illiquidity premium given the highly structured nature of certain assets. The use of a higher or lower illiquidity premium would have caused significant decreases or increases, respectively, in the fair value of the asset. Embedded derivatives within our investment and universal life contracts liability can be in either an asset or liability position, depending on certain inputs at the reporting date. Increases to an asset or decreases to a liability are described as increases to fair value. The use of a higher or lower market volatility would have caused significant decreases or increases, respectively, in the fair value of embedded derivatives in investment and universal life contracts. Long duration interest rates are used as the mean return when projecting the growth in the value of associated account value and impact the discount rate used in the discounted future cash flows valuation. The use of higher or lower risk-free rates would have caused the fair value of the embedded derivative to significantly increase or decrease, respectively. The use of a higher or lower rate for our own credit risks, which impact the rates used to discount future cash flows, would have significantly increased or decreased, respectively, the fair value of the embedded derivative. The use of a lower or higher mortality rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. The use of a lower or higher overall lapse rate assumption would have caused the fair value of the embedded derivative to decrease or increase, respectively. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis No significant assets and liabilities were measured at fair value on a nonrecurring basis for the three and nine months ended September 30, 2025 and 2024. Fair Value Option We elected fair value accounting for: ● Certain other loans of a consolidated VIE that were subject to amortized cost accounting and a valuation allowance so that credit losses are recognized within the changes in fair value in the consolidated statements of operations. ● Certain mortgage loans and long-term debt of a consolidated VIE to provide alignment between the consolidated VIE’s financial reporting and the calculation of net asset value per share used to determine the prices at which investors could purchase and redeem shares of the entity’s stock. The consolidated VIE was deconsolidated during 2025. 107 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The following table presents information regarding the assets and liabilities for which the fair value option was elected. September 30, 2025 December 31, 2024 (in millions) Mortgage loans of consolidated VIE (1) Fair value (1) $ — $ 140.6 Aggregate contractual principal — 140.6 Other loans of consolidated VIE (2) Fair value (2) $ 136.3 $ 129.0 Aggregate contractual principal 143.9 139.9 Long-term debt of consolidated VIE (1) Fair value (1) $ — $ 21.8 Aggregate contractual principal — 21.8 (1) Assets and liabilities from consolidated VIE, which are reported as mortgage loans and long-term debt on the consolidated statements of financial position, originated in December 2024 with no change in fair value recognized due to timing of origination. The consolidated VIE was deconsolidated during first quarter 2025 with no change in fair value recognized due to timing of the deconsolidation and an immaterial amount of interest expense recognized on the long-term debt. (2) Reported with other investments on the consolidated statements of financial position. See Note 4, Investments, for additional information relating to other loans more than 90 days past due or in non-accrual status. The following table presents information regarding the consolidated statements of operations impact of assets for which the fair value option was elected. For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Other loans of consolidated VIE Change in fair value pre-tax loss - instrument specific credit risk $ ( 2.5 ) $ ( 5.4 ) $ ( 3.8 ) $ ( 16.8 ) Change in fair value pre-tax loss (1) ( 2.5 ) ( 5.4 ) ( 3.8 ) ( 16.8 ) Interest income (2) 5.3 6.7 12.4 25.1 (1) Reported in net realized capital gains (losses) on the consolidated statements of operations. (2) Reported in net investment income on the consolidated statements of operations and recorded based on the effective interest rate of the loans. 108 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Financial Instruments Not Reported at Fair Value The carrying value and estimated fair value of financial instruments not recorded at fair value on a recurring basis but required to be disclosed at fair value were as follows: September 30, 2025 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 20,681.2 $ 19,430.9 $ — $ — $ 19,430.9 Policy loans 870.7 917.5 — — 917.5 Other investments 240.5 245.2 — 57.3 187.9 Cash and cash equivalents 1,608.8 1,608.8 1,577.7 31.1 — Reinsurance deposit receivable 4,295.8 4,045.7 — — 4,045.7 Cash collateral receivable 5.7 5.7 5.7 — — Investment contracts ( 33,750.0 ) ( 33,246.2 ) — ( 8,158.0 ) ( 25,088.2 ) Short-term debt ( 13.0 ) ( 13.0 ) — ( 13.0 ) — Long-term debt ( 3,924.6 ) ( 3,835.2 ) — ( 3,832.6 ) ( 2.6 ) Separate account liabilities ( 173,631.7 ) ( 172,668.4 ) — — ( 172,668.4 ) Bank deposits (1) ( 436.1 ) ( 440.2 ) — ( 440.2 ) — Cash collateral payable ( 722.6 ) ( 722.6 ) ( 722.6 ) — — December 31, 2024 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 20,343.6 $ 18,466.5 $ — $ — $ 18,466.5 Policy loans 867.5 879.3 — — 879.3 Other investments 294.9 292.4 — 127.5 164.9 Cash and cash equivalents 1,261.4 1,261.4 1,238.5 22.9 — Reinsurance deposit receivable 4,897.5 4,401.9 — — 4,401.9 Cash collateral receivable 3.0 3.0 3.0 — — Investment contracts ( 34,140.3 ) ( 32,922.2 ) — ( 8,306.5 ) ( 24,615.7 ) Short-term debt ( 152.7 ) ( 152.7 ) — ( 152.7 ) — Long-term debt ( 3,933.5 ) ( 3,715.7 ) — ( 3,713.2 ) ( 2.5 ) Separate account liabilities ( 157,939.3 ) ( 157,010.7 ) — — ( 157,010.7 ) Bank deposits (1) ( 440.4 ) ( 442.1 ) — ( 442.1 ) — Cash collateral payable ( 428.9 ) ( 428.9 ) ( 428.9 ) — — (1) Excludes deposit liabilities without defined or contractual maturities. 109 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 18. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Asset Management and Benefits and Protection. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities (including RILAs), pension risk transfer, investment only and our exited retail fixed annuities business. The Principal Asset Management segment provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Investment Management, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to serve a breadth of client investment objectives; and International Pension, which provides long-term savings and retirement solutions through pension accumulation and income annuities in Asia and Latin America. The Benefits and Protection segment focuses on solutions primarily for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc. (“PSI”), our retail broker-dealer and registered investment advisor (“RIA”); and our exited group medical and long-term care insurance businesses are reported in this segment. Our chief operating decision maker (“CODM”) is our chief executive officer. Our CODM and management team, use segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. In addition, the financial information provided to our CODM is used in making decisions about the allocation of resources and determining annual incentive compensation paid to our employees. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings: ● Periodic settlements and accruals on derivative instruments not designated as hedging instruments, ● Certain market value adjustments of derivatives and embedded derivatives and ● Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives. Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, 110 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments, ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments, ● Certain variable annuity fees, ● Market value adjustments of market risk benefits, ● Related changes in the amortization pattern of actuarial balances, ● Certain hedge accounting market value expense adjustments and ● Net realized capital gains (losses) distributed. Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses as well as amounts associated with other exited or divested businesses. Pre-tax income (loss) from exited business includes the change in fair value of the funds withheld embedded derivative, net realized capital gains (losses) on funds withheld assets, amortization of reinsurance gain (loss) and other impacts of exited business. Other impacts of exited business primarily includes change in reserves and DAC amortization. Other impacts of exited business in 2025 also include the impairment of assets associated with an exited business. Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding: ● Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain variable annuity fees, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) related to equity method investments and ● Pre-tax net realized capital gains (losses) related to sponsored investment funds and other adjustments. ● Pre-tax revenues from exited business, ● Pre-tax other revenue adjustments and income taxes of equity method investments and ● Pre-tax other revenue adjustments management believes are not indicative of overall operating trends. Segment expenses reflect consolidated U.S. GAAP total expenses excluding: ● Pre-tax expenses associated with net realized capital gains (losses), ● Periodic settlements and accruals on derivatives used to hedge MRBs, ● Pre-tax expenses from exited business and ● Pre-tax expense adjustments management believes are not indicative of overall operating trends. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and OPEB costs. The Corporate segment reflects the non-service components of pension and OPEB costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. 111 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The following tables summarize select financial information by segment and reconcile segment totals to those reported in the consolidated financial statements. Segment Assets September 30, 2025 December 31, 2024 (in millions) Retirement and Income Solutions $ 235,235.5 $ 222,967.0 Principal Asset Management 48,881.7 43,029.4 Benefits and Protection 48,239.8 46,006.7 Corporate 2,134.8 1,660.5 Total assets per consolidated statements of financial position $ 334,491.8 $ 313,663.6 Segment Operating Revenues For the three months ended September 30, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 1,033.5 $ 471.8 $ 1,083.7 $ 70.5 $ 2,659.5 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 17.7 ) — 5.8 — ( 11.9 ) Net investment income included in operating revenues 861.3 106.3 168.6 45.6 1,181.8 Operating revenues from equity method investments — 68.7 — ( 0.1 ) 68.6 Inter-segment operating revenues 9.1 80.3 2.4 77.9 169.7 Eliminations of inter-segment operating revenues — — — ( 169.7 ) ( 169.7 ) Segment operating revenues (3) $ 1,886.2 $ 727.1 $ 1,260.5 $ 24.2 3,898.0 Net realized capital gains, net of related revenue adjustments 87.5 Revenues from exited business (4) ( 271.3 ) Adjustments related to equity method investments ( 22.5 ) Market risk benefit derivative settlements ( 10.1 ) Total revenues per consolidated statements of operations $ 3,681.6 112 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 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 932.1 $ 458.5 $ 1,051.5 $ 60.6 $ 2,502.7 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 18.4 ) — 4.2 — ( 14.2 ) Net investment income included in operating revenues 765.7 127.7 156.4 59.0 1,108.8 Operating revenues from equity method investments — 73.9 — ( 0.1 ) 73.8 Inter-segment operating revenues 7.0 80.0 1.4 81.0 169.4 Eliminations of inter-segment operating revenues — — — ( 169.4 ) ( 169.4 ) Segment operating revenues (3) $ 1,686.4 $ 740.1 $ 1,213.5 $ 31.1 3,671.1 Net realized capital gains, net of related revenue adjustments 119.1 Revenues from exited business (4) ( 741.0 ) Adjustments related to equity method investments ( 26.0 ) Market risk benefit derivative settlements ( 11.6 ) Total revenues per consolidated statements of operations $ 3,011.6 For the nine months ended September 30, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 3,181.3 $ 1,382.6 $ 3,204.5 $ 196.3 $ 7,964.7 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 52.2 ) — 21.2 — ( 31.0 ) Net investment income included in operating revenues 2,521.8 343.0 488.9 155.5 3,509.2 Operating revenues from equity method investments — 158.3 — ( 0.3 ) 158.0 Inter-segment operating revenues 28.8 233.4 6.4 236.8 505.4 Eliminations of inter-segment operating revenues — — — ( 505.4 ) ( 505.4 ) Segment operating revenues (3) $ 5,679.7 $ 2,117.3 $ 3,721.0 $ 82.9 11,600.9 Net realized capital losses, net of related revenue adjustments ( 21.5 ) Revenues from exited business (4) ( 443.4 ) Adjustments related to equity method investments ( 55.0 ) Market risk benefit derivative settlements ( 32.2 ) Total revenues per consolidated statements of operations $ 11,048.8 113 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 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Revenue from contracts with external customers (1) $ 3,592.3 $ 1,349.9 $ 3,107.6 $ 176.2 $ 8,226.0 Adjustments for revenue from contracts with external customers not included in operating revenues (2) ( 56.7 ) — 15.5 — ( 41.2 ) Net investment income included in operating revenues 2,238.3 324.9 458.0 163.6 3,184.8 Operating revenues from equity method investments — 179.2 — ( 0.3 ) 178.9 Inter-segment operating revenues 39.2 226.2 5.5 205.0 475.9 Eliminations of inter-segment operating revenues — — — ( 475.9 ) ( 475.9 ) Segment operating revenues (3) $ 5,813.1 $ 2,080.2 $ 3,586.6 $ 68.6 11,548.5 Net realized capital gains, net of related revenue adjustments 173.3 Revenues from exited business (4) ( 253.9 ) Adjustments related to equity method investments ( 57.9 ) Market risk benefit derivative settlements ( 34.3 ) Total revenues per consolidated statements of operations $ 11,375.7 (1) Includes amounts reported in premiums and other considerations as well as fees and other revenues on the consolidated statements of operations. (2) Includes certain revenues associated with our exited U.S. retail fixed annuity and ULSG businesses and fees associated with net realized capital gains (losses) that are not included in segment operating revenue. (3) See Note 19, Revenues from Contracts with Customers, for additional detail relating to segment operating revenues. (4) Revenues from exited business included: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Change in fair value of funds withheld embedded derivative $ ( 265.9 ) $ ( 776.8 ) $ ( 455.3 ) $ ( 346.9 ) Net realized capital gains (losses) on funds withheld assets ( 0.2 ) 39.4 31.5 105.9 Amortization of reinsurance gain 0.5 0.6 1.6 2.7 Other impacts of exited business ( 5.7 ) ( 4.2 ) ( 21.2 ) ( 15.6 ) Total revenues from exited business $ ( 271.3 ) $ ( 741.0 ) $ ( 443.4 ) $ ( 253.9 ) 114 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Segment Expenses The expense categories within total segment expenses included: For the three months ended September 30, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 1,144.0 $ 60.9 $ 705.0 $ ( 1.1 ) Liability for future policy benefits remeasurement (gain) loss ( 10.5 ) ( 0.8 ) 72.8 — Market risk benefit remeasurement loss 0.9 — — — Dividends to policyholders 0.1 — 29.9 — Commission expense 74.9 50.9 132.4 26.9 Capitalization of deferred acquisition costs and contract costs ( 41.1 ) ( 9.7 ) ( 74.3 ) — Amortization of deferred acquisition costs and contract costs 21.8 12.7 63.9 — Depreciation and amortization 18.3 13.7 4.3 3.8 Interest expense on corporate debt — 0.3 — 45.0 Compensation and other 367.4 320.0 240.0 43.5 Total operating expenses 441.3 387.9 366.3 119.2 Total segment expenses $ 1,575.8 $ 448.0 $ 1,174.0 $ 118.1 $ 3,315.9 Net realized capital losses expense adjustments 80.0 Market risk benefit derivative settlements ( 10.1 ) Expenses from exited business (1) 47.4 Total expenses per consolidated statements of operations $ 3,433.2 For the three months ended September 30, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 984.6 $ 81.8 $ 679.7 $ ( 1.4 ) Liability for future policy benefits remeasurement (gain) loss ( 2.4 ) 0.2 97.1 — Market risk benefit remeasurement loss 24.8 — — — Dividends to policyholders — — 14.9 — Commission expense 74.2 48.1 131.7 19.6 Capitalization of deferred acquisition costs and contract costs ( 44.3 ) ( 8.1 ) ( 75.7 ) — Amortization of deferred acquisition costs and contract costs 19.8 8.3 63.7 — Depreciation and amortization 20.6 16.4 4.9 4.6 Interest expense on corporate debt — 0.9 — 41.7 Compensation and other 363.0 319.3 232.8 37.3 Total operating expenses 433.3 384.9 357.4 103.2 Total segment expenses $ 1,440.3 $ 466.9 $ 1,149.1 $ 101.8 $ 3,158.1 Net realized capital losses expense adjustments 90.8 Market risk benefit derivative settlements ( 11.6 ) Expenses from exited business (1) 68.1 Total expenses per consolidated statements of operations $ 3,305.4 115 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 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 3,504.1 $ 233.7 $ 2,123.4 $ 21.7 Liability for future policy benefits remeasurement (gain) loss ( 18.9 ) ( 0.9 ) 68.7 — Market risk benefit remeasurement loss 4.6 — — — Dividends to policyholders 0.1 — 71.9 — Commission expense 216.9 147.2 419.1 75.6 Capitalization of deferred acquisition costs and contract costs ( 122.5 ) ( 25.8 ) ( 236.0 ) — Amortization of deferred acquisition costs and contract costs 64.0 24.9 192.3 — Depreciation and amortization 56.4 41.5 13.0 12.1 Interest expense on corporate debt — 1.2 — 132.4 Compensation and other 1,088.2 983.8 715.0 125.0 Total operating expenses 1,303.0 1,172.8 1,103.4 345.1 Total segment expenses $ 4,792.9 $ 1,405.6 $ 3,367.4 $ 366.8 $ 9,932.7 Net realized capital losses expense adjustments 145.2 Market risk benefit derivative settlements ( 32.2 ) Expenses from exited business (1) 222.7 Total expenses per consolidated statements of operations $ 10,268.4 For the nine months ended September 30, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Benefits, claims and settlement expenses $ 3,718.7 $ 260.1 $ 1,990.0 $ 6.8 Liability for future policy benefits remeasurement (gain) loss ( 5.2 ) 0.1 151.7 — Market risk benefit remeasurement loss 27.8 — — — Dividends to policyholders 0.1 — 68.0 — Commission expense 194.9 138.8 405.4 56.9 Capitalization of deferred acquisition costs and contract costs ( 102.0 ) ( 20.6 ) ( 239.9 ) — Amortization of deferred acquisition costs and contract costs 59.9 25.2 189.1 — Depreciation and amortization 60.9 50.2 16.0 13.6 Interest expense on corporate debt — 2.7 — 125.1 Compensation and other 1,081.9 967.4 697.8 131.7 Total operating expenses 1,295.6 1,163.7 1,068.4 327.3 Total segment expenses $ 5,037.0 $ 1,423.9 $ 3,278.1 $ 334.1 $ 10,073.1 Net realized capital losses expense adjustments 198.2 Market risk benefit derivative settlements ( 34.3 ) Expenses from exited business (1) 361.5 Total expenses per consolidated statements of operations $ 10,598.5 (1) Expenses from exited business included: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Amortization of reinsurance loss $ 18.8 $ 47.0 $ 66.7 $ 476.7 Other impacts of exited business 28.6 21.1 156.0 ( 115.2 ) Total expenses from exited business $ 47.4 $ 68.1 $ 222.7 $ 361.5 116 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Segment Pre-Tax Operating Earnings For the three months September 30, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 310.3 $ 274.7 $ 86.5 $ ( 91.6 ) $ 579.9 Pre-tax net realized capital gains, as adjusted (1) 7.5 Pre-tax loss from exited business (2) ( 318.7 ) Adjustments related to equity method investments and noncontrolling interest ( 20.3 ) Total income before income taxes per consolidated statements of operations $ 248.4 For the three months September 30, 2024 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 246.1 $ 268.7 $ 64.4 $ ( 79.4 ) $ 499.8 Pre-tax net realized capital gains, as adjusted (1) 28.3 Pre-tax loss from exited business (2) ( 809.1 ) Adjustments related to equity method investments and noncontrolling interest ( 12.8 ) Total loss before income taxes per consolidated statements of operations $ ( 293.8 ) For the nine months ended September 30, 2025 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 886.1 $ 698.6 $ 353.6 $ ( 278.4 ) $ 1,659.9 Pre-tax net realized capital losses, as adjusted (1) ( 166.7 ) Pre-tax loss from exited business (2) ( 666.1 ) Adjustments related to equity method investments and noncontrolling interest ( 46.7 ) Total income before income taxes per consolidated statements of operations $ 780.4 117 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 Retirement Principal and Income Asset Benefits and Solutions Management Protection Corporate Total (in millions) Segment pre-tax operating earnings (losses) $ 776.1 $ 645.2 $ 308.5 $ ( 271.7 ) $ 1,458.1 Pre-tax net realized capital losses, as adjusted (1) ( 24.9 ) Pre-tax loss from exited business (2) ( 615.4 ) Adjustments related to equity method investments and noncontrolling interest ( 40.6 ) Total income before income taxes per consolidated statements of operations $ 777.2 (1) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Net realized capital gains (losses) $ 85.7 $ 77.4 $ ( 26.0 ) $ 61.3 Derivative and hedging-related revenue adjustments ( 25.7 ) 17.3 ( 76.2 ) 52.4 Market value adjustments to fee revenues — — ( 0.1 ) 0.1 Certain variable annuity fees 17.2 17.7 50.8 53.9 Equity method investments 1.2 0.3 5.6 ( 13.6 ) Sponsored investment funds and other adjustments 9.1 6.4 24.4 19.2 Net realized capital gains (losses), net of related revenue adjustments 87.5 119.1 ( 21.5 ) 173.3 Amortization of actuarial balances ( 4.3 ) ( 0.3 ) ( 9.3 ) ( 0.6 ) Capital gains distributed ( 59.0 ) ( 41.5 ) ( 39.0 ) ( 133.5 ) Derivative and hedging-related expense adjustments ( 3.4 ) ( 2.6 ) 1.5 ( 2.8 ) Market value adjustments of market risk benefits ( 13.2 ) ( 40.8 ) ( 80.6 ) ( 45.6 ) Market value adjustments of embedded derivatives ( 0.1 ) ( 5.6 ) ( 17.8 ) ( 15.7 ) Net realized capital losses, net of related expense adjustments ( 80.0 ) ( 90.8 ) ( 145.2 ) ( 198.2 ) Pre-tax net realized capital gains (losses), as adjusted (a) $ 7.5 $ 28.3 $ ( 166.7 ) $ ( 24.9 ) (a) As adjusted before noncontrolling interest capital gains (losses). (2) Pre-tax income (loss) from exited business included: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Change in fair value of funds withheld embedded derivative $ ( 265.9 ) $ ( 776.8 ) $ ( 455.3 ) $ ( 346.9 ) Net realized capital gains (losses) on funds withheld assets ( 0.2 ) 39.4 31.5 105.9 Amortization of reinsurance loss ( 18.3 ) ( 46.4 ) ( 65.1 ) ( 474.0 ) Other impacts of exited business ( 34.3 ) ( 25.3 ) ( 177.2 ) 99.6 Total pre-tax loss from exited business $ ( 318.7 ) $ ( 809.1 ) $ ( 666.1 ) $ ( 615.4 ) 118 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 19. Revenues from Contracts with Customers The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations. For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions $ 155.4 $ 169.3 $ 449.3 $ 493.3 Principal Asset Management: Investment Management 448.6 433.9 1,308.4 1,253.9 International Pension 88.7 92.3 272.5 279.2 Eliminations ( 4.8 ) ( 3.5 ) ( 14.1 ) ( 11.8 ) Total Principal Asset Management 532.5 522.7 1,566.8 1,521.3 Benefits and Protection: Specialty Benefits 4.0 3.8 11.7 11.6 Life Insurance 23.1 24.7 66.9 69.8 Eliminations ( 0.1 ) — ( 0.1 ) ( 0.1 ) Total Benefits and Protection 27.0 28.5 78.5 81.3 Corporate 64.9 52.6 181.0 166.3 Total segment revenue from contracts with customers 779.8 773.1 2,275.6 2,262.2 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 331.2 299.7 961.1 886.5 Pre-tax other adjustments (2) 17.7 18.3 52.3 56.7 Total fees and other revenues per consolidated statements of operations $ 1,128.7 $ 1,091.1 $ 3,289.0 $ 3,205.4 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments to fee revenues. Retirement and Income Solutions Retirement and Income Solutions offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Individual retirement accounts (“IRAs”) are offered through Principal Bank. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions. Administrative service fee revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Administrative service fee revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer. 119 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Administrative service fee revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client’s investments or assets under administration. If the consideration for this series of performance obligations is based on market value, it is considered variable during the billing period as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each billing period’s series of distinct services once the market value of the client’s investments or assets under administration is determined at market close. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion. IRAs are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Deposit account fee revenues are earned as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients’ portfolios. The types of revenues from contracts with customers were as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Administrative service fee revenue $ 150.5 $ 165.3 $ 435.3 $ 481.6 Deposit account fee revenue 3.3 3.1 9.9 9.2 Commission income 1.6 0.9 4.1 2.5 Total revenues from contracts with customers 155.4 169.3 449.3 493.3 Fees and other revenues not within the scope of revenue recognition guidance 303.9 283.9 885.4 838.7 Total fees and other revenues 459.3 453.2 1,334.7 1,332.0 Premiums and other considerations 566.5 471.7 1,824.0 2,236.8 Net investment income 860.4 761.5 2,521.0 2,244.3 Total operating revenues $ 1,886.2 $ 1,686.4 $ 5,679.7 $ 5,813.1 Principal Asset Management Fees and other revenues earned for asset management, investment advisory and distribution services provided to institutional and retail clients in addition to trustee and/or administrative services performed for retirement savings plans. Fees are based largely upon contractual rates applied to the specified amounts of the clients’ portfolios. Each service is a distinct performance obligation; however, if the services are not distinct on their own, we combine them into a distinct bundle or we have a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues received for performance obligations such as asset management and other services are typically recognized over time utilizing the output method as the service is performed. Performance fees and transaction fees on certain accounts are recognized in income when the probability of significant reversal will not occur upon resolution of the uncertainty, which could be based on a variety of factors such as market performance or other internal metrics. Asset management fees are accrued each month based on the fee terms within the applicable agreement and are generally billed quarterly when values used for the calculation are available. Management fees and performance fees are variable consideration as they are subject to fluctuation based on assets under management (“AUM”) and other constraints. These fees are not recognized until unconstrained at the end of each reporting period. Incentive-based fees are recognized in income when the probability of significant reversal will not occur upon the resolution of the uncertainty, which is based on market performance. 120 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) Fees for managing customers’ mandatory retirement savings accounts in Chile are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these contracts as services are performed over the life of the contract and review annually. The types of revenues from contracts with customers were as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Investment Management: Management fee revenue $ 409.5 $ 390.1 $ 1,186.7 $ 1,134.9 Other fee revenue 39.1 43.8 121.7 119.0 Total revenues from contracts with customers 448.6 433.9 1,308.4 1,253.9 Fees and other revenues not within the scope of revenue recognition guidance 8.9 4.1 21.5 14.9 Total fees and other revenues 457.5 438.0 1,329.9 1,268.8 Net investment income 26.4 28.4 74.9 77.3 Total operating revenues $ 483.9 $ 466.4 $ 1,404.8 $ 1,346.1 For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) International Pension: Management fee revenue $ 85.2 $ 89.0 $ 262.0 $ 267.8 Other fee revenue 3.5 3.3 10.5 11.4 Total revenues from contracts with customers 88.7 92.3 272.5 279.2 Fees and other revenues not within the scope of revenue recognition guidance 5.7 1.3 8.4 4.1 Total fees and other revenues 94.4 93.6 280.9 283.3 Premiums and other considerations 0.5 4.8 6.1 18.0 Net investment income 153.1 179.0 439.6 445.0 Total operating revenues $ 248.0 $ 277.4 $ 726.6 $ 746.3 Benefits and Protection Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed. Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue. 121 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The types of revenues from contracts with customers were as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Specialty Benefits: Administrative service fees $ 4.0 $ 3.8 $ 11.7 $ 11.6 Total revenues from contracts with customers 4.0 3.8 11.7 11.6 Fees and other revenues not within the scope of revenue recognition guidance 4.4 4.4 13.1 13.4 Total fees and other revenues 8.4 8.2 24.8 25.0 Premiums and other considerations 836.8 810.6 2,492.1 2,408.6 Net investment income 51.3 50.1 155.7 141.9 Total operating revenues $ 896.5 $ 868.9 $ 2,672.6 $ 2,575.5 For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Life Insurance: Administrative service fees $ 11.0 $ 10.3 $ 32.8 $ 28.9 Commission income 12.1 14.4 34.1 40.9 Total revenues from contracts with customers 23.1 24.7 66.9 69.8 Fees and other revenues not within the scope of revenue recognition guidance 89.7 84.9 271.1 251.6 Total fees and other revenues 112.8 109.6 338.0 321.4 Premiums and other considerations 136.1 131.5 384.0 380.7 Net investment income 115.3 103.7 326.9 309.6 Total operating revenues $ 364.2 $ 344.8 $ 1,048.9 $ 1,011.7 Corporate Fees and other revenues are earned on the performance of selling and servicing of securities and related products offered through PSI, an introducing broker-dealer registered with the FINRA. PSI enters into selling and distribution agreements with the obligation to sell or distribute the securities products, such as mutual funds, annuities and products sold through RIAs, to individual clients in return for front-end sales charges, 12b-1 service fees, annuity fees and asset-based fees. Front-end sales charges, 12b-1 fees and annuity fees are related to a single sale and are earned at the time of sale. PSI also enters into agreements with individual customers to provide securities trade execution and custody through a brokerage services platform in return for ticket charge and other service fee revenue. These services are bundled as one single distinct service referred to as brokerage services. This revenue is related to distinct transactions and is earned at a point in time. PSI also enters into agreements with individual customers to provide trade execution, clearing services, custody services and investment research services through our proprietary offered fee-based products. These services are bundled as one single distinct service referred to as advisory services. In addition, for outside RIA business PSI performs sales and distribution services only. The revenues are earned over time as the service is performed utilizing the output method. A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration. 122 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) The Corporate segment also includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions) Commission income $ 133.5 $ 129.4 $ 396.9 $ 351.8 Other fee revenue 25.2 22.4 74.2 66.5 Eliminations ( 93.8 ) ( 99.2 ) ( 290.1 ) ( 252.0 ) Total revenues from contracts with customers 64.9 52.6 181.0 166.3 Fees and other revenues not within the scope of revenue recognition guidance ( 81.4 ) ( 78.7 ) ( 238.4 ) ( 235.8 ) Total fees and other revenues ( 16.5 ) ( 26.1 ) ( 57.4 ) ( 69.5 ) Premiums and other considerations ( 1.3 ) ( 1.3 ) ( 4.0 ) ( 3.9 ) Net investment income 42.0 58.5 144.3 142.0 Total operating revenues $ 24.2 $ 31.1 $ 82.9 $ 68.6 Contract Costs Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $ 175.0 million and $ 198.9 million as of September 30, 2025 and December 31, 2024, respectively. We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations. Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. Amortization expense of $ 10.1 million and $ 9.8 million for the three months ended September 30, 2025 and 2024 and $ 70.8 million and $ 29.7 million for the nine months ended September 30, 2025 and 2024, respectively, was recorded in operating expenses on the consolidated statements of operations. For the nine months ended September 30, 2025 and 2024, amortization expense included $ 45.4 million and $ 0.0 million, respectively, of impairment loss in relation to the costs capitalized. See Note 2, Other Intangible Assets, for further details of the agreement with BCT that led to the 2025 impairment. 20. Stock-Based Compensation Plans As of September 30, 2025, we had the 2021 Stock Incentive Plan, the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan and the Directors Stock Plan (“Stock-Based Compensation Plans”). No new grants will be made under the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan or the Directors Stock Plan. Under the terms of the 2021 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. To date, we have not granted any incentive stock options, restricted stock or performance units under any plans. As part of our fair value process, we assess the impact of material nonpublic information on our share price or expected volatility, as applicable, at the time of grant. No awards in 2025 required a fair value adjustment. 123 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) As of September 30, 2025, the maximum number of new shares of common stock available for grant under the 2021 Stock Incentive Plan was 19.1 million. For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows: For the nine months ended September 30, 2025 2024 (in millions) Compensation cost $ 92.6 $ 83.3 Related income tax benefit 21.1 18.7 Capitalized as part of an asset 0.8 0.9 Nonqualified Stock Options No nonqualified stock options were granted to employees during both the nine months ended September 30, 2025 and 2024. All outstanding nonqualified stock options are vested and have been fully expensed. Performance Share Awards Performance share awards were granted to certain employees under the 2021 Stock Incentive Plan. Total performance share awards granted were 0.3 million for the nine months ended September 30, 2025. The performance share awards granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results to be determined at the end of the performance period. The performance share awards include a relative total shareholder return modifier under which the number of shares ultimately awarded is also impacted by our actual shareholder return relative to our S&P 500 Financial Sector Index peer group. The actual number of common shares to be awarded at the end of each performance period will range between 0 % and 180 % of the initial target awards. The fair value of performance share awards is determined using a Monte Carlo simulation model. The weighted-average grant date fair value of these performance share awards granted was $ 90.41 per common share. As of September 30, 2025, we had $ 22.9 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.5 years. Restricted Stock Units Restricted stock units were issued to certain employees and non-employee directors pursuant to the 2021 Stock Incentive Plan. Total restricted stock units granted were 1.1 million for the nine months ended September 30, 2025. The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant date fair value of these restricted stock units granted was $ 84.76 per common share. As of September 30, 2025, we had $ 81.9 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted. The cost is expected to be recognized over a weighted-average period of approximately 1.7 years. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, employees purchased 0.3 million shares for the nine months ended September 30, 2025. The weighted average fair value of the discount on the stock purchased was $ 8.28 per share. As of September 30, 2025, a total of 2.2 million of new shares were available to be made issuable by us for this plan. 124 Table of Contents Principal Financial Group, Inc. Notes to Condensed Consolidated Financial Statements – (continued) September 30, 2025 (Unaudited) 21. Earnings Per Common Share The computations of the basic and diluted per share amounts were as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 (in millions, except per share data) Net income (loss) $ 233.9 $ ( 193.4 ) $ 730.3 $ 695.4 Subtract: Net income attributable to noncontrolling interest 20.1 26.6 62.2 29.8 Total $ 213.8 $ ( 220.0 ) $ 668.1 $ 665.6 Weighted-average shares outstanding: Basic 222.4 230.7 224.1 233.5 Dilutive effects: Stock options 0.6 — 0.6 0.8 Restricted stock units 1.9 — 1.8 2.0 Performance share awards 0.3 — 0.3 0.3 Diluted 225.2 230.7 226.8 236.6 Net income (loss) per common share: Basic $ 0.96 $ ( 0.95 ) $ 2.98 $ 2.85 Diluted $ 0.95 $ ( 0.95 ) $ 2.95 $ 2.81 The calculation of diluted earnings per share for the three and nine months ended September 30, 2025 and 2024, excludes the incremental effect related to certain outstanding stock-based compensation grants due to their anti-dilutive effect. When a net loss is reported, our basic weighted-average shares are used to calculate diluted earnings per share, as dilutive shares would have an antidilutive effect and result in a lower loss per share. 125 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis discusses our financial condition as of September 30, 2025, compared with December 31, 2024, and our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024, prepared in conformity with U.S. GAAP. The discussion and analysis includes, where appropriate, factors that may affect our future financial performance. The discussion should be read in conjunction with our Form 10-K, for the year ended December 31, 2024, filed with the SEC and the unaudited condensed consolidated financial statements and the related notes to the financial statements and the other financial information included elsewhere in this Form 10-Q. Forward-Looking Information Our narrative analysis below contains forward-looking statements intended to enhance the reader’s ability to assess our future financial performance. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and similar expressions. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. 126 Table of Contents Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to, the following: (1) adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs, as well as our access to capital and cost of capital; (2) conditions in the global capital markets, including the equity, bond or real estate markets, and the economy generally may materially and adversely affect our business and results of operations; (3) changes in interest rates or credit spreads or a prolonged low interest rate environment may adversely affect our results of operations, financial condition and liquidity, and our net income can vary from period to period; (4) our investment portfolio is subject to several risks that may diminish the value of our invested assets and the investment returns credited to customers, which could reduce our sales, revenues, AUM and net income; (5) our valuation of investments and the determinations of the amount of allowances and impairments taken on our investments may include methodologies, estimations and assumptions that are subject to differing interpretations and, if changed, could materially adversely affect our results of operations or financial condition; (6) any impairments of or valuation allowances against our deferred tax assets could adversely affect our results of operations and financial condition; (7) we may face losses on our insurance and annuity products if our actual experience differs significantly from our pricing and reserving assumptions; (8) the pattern of amortizing our DAC asset and other actuarial balances may change, impacting both the level of our DAC asset and other actuarial balances and the timing of our net income; (9) changes in laws or regulations may reduce our profitability or impact how we do business; (10) our ability to pay stockholder dividends, make share repurchases and meet our obligations may be constrained by the limitations on dividends or other distributions Iowa insurance laws impose on Principal Life; (11) changes in accounting standards may adversely affect our reported results of operations and financial condition; (12) litigation and regulatory investigations may affect our financial strength or reduce our profitability; (13) from time to time, we may become subject to tax audits, tax litigation or similar proceedings, and as a result we may owe additional taxes, interest and penalties in amounts that may be material; (14) applicable laws and our certificate of incorporation and by-laws may discourage takeovers and business combinations that some stockholders might consider in their best interests; (15) competition, including from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance, may impair our ability to retain existing customers, attract new customers and maintain our profitability; (16) a downgrade in our financial strength or credit ratings may increase policy surrenders and withdrawals, reduce new sales, terminate relationships with distributors, impact existing liabilities and increase our cost of capital, any of which could adversely affect our profitability and financial condition; (17) client terminations or withdrawals or changes in investor preferences may lead to a reduction in revenues for our asset management and accumulation businesses; (18) guarantees within certain of our products that protect policyholders may decrease our net income or increase the volatility of our results of operations or financial position under U.S. GAAP if our hedging or risk management strategies prove ineffective or insufficient; (19) our international businesses face political, legal, operational and other risks that could reduce our profitability in those businesses; (20) we face risks arising from fraudulent activities; (21) we face risks arising from our participation in joint ventures; (22) we may need to fund deficiencies in our Closed Block assets; (23) our reinsurers could default on their obligations or increase their rates, which could adversely impact our net income and financial condition; (24) we face risks arising from future acquisitions of businesses; (25) we face risks in administering coinsurance with funds withheld reinsurance agreements; (26) a pandemic, terrorist attack, military action or other catastrophic event could adversely affect our operations, net income or financial condition; (27) our financial results may be adversely impacted by global climate changes; (28) technological and societal changes may disrupt our business model and impair our ability to retain existing customers, attract new customers and maintain our profitability; (29) damage to our reputation may adversely affect our revenues and profitability; (30) we may not be able to protect our intellectual property and may be subject to infringement claims; (31) if we are unable to attract, develop and retain qualified employees and sales representatives and develop new distribution sources, our results of operations, financial condition, strategic growth commitments and sales of our products may be adversely impacted; (32) interruptions in information technology, infrastructure or other internal or external systems used for our business operations, or a failure to maintain the confidentiality, integrity or availability of data residing on such systems, could disrupt our business, damage our reputation and adversely impact our profitability; (33) loss of or disruption in key vendor relationships and services or failure of a vendor to protect information of our customers or employees could adversely affect our business or result in losses and (34) our enterprise risk management framework may not be fully effective in identifying or mitigating all the risks to which we are exposed. 127 Table of Contents Overview We provide financial products and services through the following reportable segments: ● Retirement and Income Solutions provides retirement and related financial products and services primarily to businesses, their employees, and other individuals. This segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities, pension risk transfer, investment only and our exited retail fixed annuities business. We offer a comprehensive portfolio of products and services for retirement savings and retirement income: ● To businesses of all sizes, we offer products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plan services and pension closeout services. For more basic retirement services, we offer SIMPLE IRAs and payroll deduction plans; ● To large institutional clients, we also offer investment only products, including investment only GICs; ● To employees of businesses and other individuals, we offer the ability to accumulate savings for retirement and other purposes through mutual funds, individual variable annuities, RILAs and bank products, along with retirement income options; and ● In addition, we offer trust and custody services. ● Principal Asset Management provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Investment Management, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to service a breadth of client investment objectives; and International Pension, which provides long-term savings and retirement solutions through pension accumulation and income annuities in Asia and Latin America. ● Benefits and Protection is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance focused on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. ● Corporate, which manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of PSI, our retail broker-dealer and RIA, and our exited group medical and long-term care insurance businesses are reported in this segment. Transaction Affecting Comparability of Results of Operations Principal Mandatory Provident Funds On January 16, 2025, we announced the signing of an agreement with BCT to expand our investment management capabilities and exit our sponsor and trustee (pension) roles in Hong Kong for MPF Schemes. BCT will be assuming the role as sponsor and trustee for the Principal MPF Schemes. The transaction is expected to close in 2026, subject to regulatory approval; however, certain transaction impacts were recognized in first quarter 2025. We impaired our distribution agreement intangible asset and contract cost asset, resulting in a $65.4 million loss reported in operating expenses on our consolidated statements of operations. Additionally, we classified our customer relationship intangible asset as held-for-sale, resulting in a $77.0 million loss reported in net realized capital gains (losses) on our consolidated statements of operations. For segment reporting, the impairments are reflected in loss from exited business and the held-for-sale write-down is reflected in net realized capital losses. As such, they had no impact on our Principal Asset Management segment pre-tax operating earnings. 128 Table of Contents Yearly Renewable Term Reinsurance Transactions During 2024, we terminated, executed and amended certain YRT reinsurance agreements with unaffiliated reinsurance companies for insurance risks associated with universal life insurance in the Benefits and Protection segment, primarily related to ULSG (“YRT Reinsurance Transactions”). Other Actuarial Assumption Updates. We periodically review and update actuarial assumptions that are inputs to the models for the liability for future policy benefits for traditional limited-payment long-duration contracts and other actuarial balances. Assumption updates, model refinements and other updates made during the third quarter resulted in a change in cash flow assumptions that decreased consolidated net income attributable to Principal Financial Group, Inc. by $59.3 million and $85.7 million for the three and nine months ended September 30, 2025 and 2024, respectively. The following table presents the increase (decrease) to pre-tax operating earnings for each segment. For the three and nine months ended September 30, 2025 2024 (in millions) Retirement and Income Solutions $ 12.0 $ (16.7) Principal Asset Management — 21.1 Benefits and Protection (79.1) (86.4) Other Factors Affecting Comparability of Results of Operations Fluctuations in Foreign Currency to U.S. Dollar Exchange Rates Fluctuations in foreign currency to U.S. dollar exchange rates for locations in which we have operations can affect reported financial results. In years when foreign currencies weaken against the U.S. dollar, translating foreign currencies into U.S. dollars results in fewer U.S. dollars to be reported. When foreign currencies strengthen, translating foreign currencies into U.S. dollars results in more U.S. dollars to be reported. Foreign currency exchange rate fluctuations create variances in our financial statement line items. The most significant impact occurs within our Principal Asset Management segment where pre-tax operating earnings were positively impacted $0.1 million for the three months ended September 30, 2025 and negatively impacted $8.8 million for the nine months ended September 30, 2025, as a result of fluctuations in foreign currency to U.S. dollar exchange rates. This impact was calculated by comparing (a) the difference between current year results and prior year results to (b) the difference between current year results and prior year results translated using current year exchange rates for both periods. We use this approach to calculate the impact of exchange rates on all revenue and expense line items. For a discussion of our approaches to managing foreign currency exchange rate risk, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.” Variable Investment Income Variable investment income includes certain types of investment returns such as prepayment fees and income (loss) from certain elements of our other alternative asset classes, including results of value-add real estate sales activity. Due to its unpredictable nature, variable investment income may or may not be material to our financial results for a given reporting period and may create variances when comparing different reporting periods. For additional information, see “Investment Results.” Recent Accounting Changes For recent accounting changes, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 1, Nature of Operations and Significant Accounting Policies” under the caption “Recent Accounting Pronouncements.” 129 Table of Contents Results of Operations The following table presents summary consolidated financial information for the periods indicated: For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Revenues: Premiums and other considerations $ 1,532.8 $ 1,412.9 $ 119.9 $ 4,680.6 $ 5,024.1 $ (343.5) Fees and other revenues 1,128.7 1,091.1 37.6 3,289.0 3,205.4 83.6 Net investment income 1,200.5 1,167.6 32.9 3,529.0 3,325.9 203.1 Net realized capital gains (losses) 85.7 77.4 8.3 (26.0) 61.3 (87.3) Net realized capital gains (losses) on funds withheld assets (0.2) 39.4 (39.6) 31.5 105.9 (74.4) Change in fair value of funds withheld embedded derivative (265.9) (776.8) 510.9 (455.3) (346.9) (108.4) Total revenues 3,681.6 3,011.6 670.0 11,048.8 11,375.7 (326.9) Expenses: Benefits, claims and settlement expenses 1,964.1 1,778.1 186.0 6,024.0 5,925.7 98.3 Liability for future policy benefits remeasurement loss 60.9 122.5 (61.6) 58.8 565.6 (506.8) Market risk benefit remeasurement loss 4.0 54.0 (50.0) 53.0 39.1 13.9 Dividends to policyholders 30.0 14.9 15.1 72.0 68.1 3.9 Operating expenses 1,374.2 1,335.9 38.3 4,060.6 4,000.0 60.6 Total expenses 3,433.2 3,305.4 127.8 10,268.4 10,598.5 (330.1) Income (loss) before income taxes 248.4 (293.8) 542.2 780.4 777.2 3.2 Income taxes (benefits) 14.5 (100.4) 114.9 50.1 81.8 (31.7) Net income (loss) 233.9 (193.4) 427.3 730.3 695.4 34.9 Net income attributable to noncontrolling interest 20.1 26.6 (6.5) 62.2 29.8 32.4 Net income (loss) attributable to Principal Financial Group, Inc. $ 213.8 $ (220.0) $ 433.8 $ 668.1 $ 665.6 $ 2.5 Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Net Income Attributable to Principal Financial Group, Inc. Net income (loss) attributable to Principal Financial Group, Inc. increased primarily due to the change in the fair value of the funds withheld embedded derivative. Total Revenues Premiums and other considerations increased $94.8 million for the Retirement and Income Solutions segment primarily due to higher sales of single premium group annuities with life contingencies. Premiums and other considerations increased $29.4 million for the Benefits and Protection segment primarily due to growth in our Specialty Benefits business. Fees and other revenues increased $5.5 million for the Retirement and Income Solutions segment primarily due to an increase in fee revenue stemming from an increase in average monthly account values, which largely resulted from more favorable financial markets. Fees and other revenues increased for the Principal Asset Management segment primarily due to $19.4 million higher management fee revenue as a result of increased average AUM managed by our Investment Management operations. Fees and other revenues increased for the Corporate segment primarily due to a $4.2 million increase in our broker-dealer operations. For net investment income and net realized capital gains (losses) variance information, see “Investments — Investment Results” under the captions “Net Investment Income” and “Net Realized Capital Gains (Losses),” respectively. 130 Table of Contents Net realized capital gains on funds withheld assets decreased due to $19.1 million lower gains on sales of funds withheld assets as a result of reduced sales in 2025 by an external reinsurer and a $16.2 million change due to net unrealized losses on funds withheld assets in 2025 as compared to net unrealized gains in 2024. The change in fair value of the funds withheld embedded derivative resulted in a lower loss in 2025 than 2024 due primarily to changes in interest rates and credit spreads. Total Expenses Benefits, claims and settlement expenses increased $163.7 million in the Retirement and Income Solutions segment primarily due to an increase in reserves, largely stemming from higher sales of single premium group annuities with life contingencies. The liability for future policy benefits remeasurement (gain) loss change was primarily due to the less unfavorable effect of changes in cash flow assumptions related to actuarial assumption updates and model refinements in 2025 compared to 2024. The market risk benefit remeasurement (gain) loss change was primarily due to the $82.5 million favorable impact from the change in fair value of the MRB asset (liability), excluding impacts of nonperformance risk, primarily driven by changes in market movements. This change was offset by a $32.5 million unfavorable impact from periodic and final settlements for derivatives used to hedge MRBs. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 10, Market Risk Benefits” for further information on market effects. Operating expenses increased primarily due to a $17.0 million increase in nondeferrable commission expense, an $8.7 million increase in compensation costs and an $8.0 million increase in amounts credited to employee accounts in a nonqualified defined contribution pension plan. Income Taxes The effective income tax rate decreased to 6% for the three months ended September 30, 2025, from 34% for the three months ended September 30, 2024, primarily due to an increase in pre-tax income with no proportional changes in permanent tax differences. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 13, Income Taxes” for a reconciliation between the U.S. corporate income tax rate and the effective income tax rate. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Net Income Attributable to Principal Financial Group, Inc. Net income attributable to Principal Financial Group, Inc. increased $158.1 million due to the unfavorable one-time impact of the YRT Reinsurance Transactions in 2024, $32.4 million due to a one-time expense accrual release in 2025 and $26.4 million due to less unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024. These increases were partially offset by $119.7 million due to the impact from asset write-downs related to exiting our sponsor and trustee (pension) roles in Hong Kong for MPF Schemes and $85.7 million due to the change in the fair value of the funds withheld embedded derivative. Total Revenues Premiums and other considerations decreased $412.8 million for the Retirement and Income Solutions segment primarily due to lower sales of single premium group annuities with life contingencies. Premiums and other considerations increased $81.3 million for the Benefits and Protection segment primarily due to growth in our Specialty Benefits business. Fees and other revenues increased $56.8 million for the Principal Asset Management segment primarily due to higher management fee revenue as a result of increased average AUM managed by our Investment Management operations. Fees and other revenues increased $16.4 million for the Benefits and Protection segment primarily due to growth in our Life Insurance business. For net investment income and net realized capital gains (losses) variance information, see “Investments — Investment Results” under the captions “Net Investment Income” and “Net Realized Capital Gains (Losses),” respectively. 131 Table of Contents Net realized capital gains on funds withheld assets decreased primarily due to lower net gains on sales of funds withheld assets as a result of reduced sales in 2025 by an external reinsurer. The change in fair value of the funds withheld embedded derivative resulted in a larger loss in 2025 compared to 2024 due to changes in interest rates and credit spreads. Total Expenses Benefits, claims and settlement expenses decreased $213.5 million for the Retirement and Income Solutions segment primarily due to a decrease in reserves, stemming from lower sales of single premium group annuities with life contingencies. Benefits, claims and settlement expenses decreased for the Principal Asset Management segment due to $26.0 million from the closure of our Hong Kong guaranteed constituent funds in the prior year, $11.5 million due to lower new sales of Chile annuities and $9.8 million due to lower interest credited to customers. Benefits, claims and settlement expenses increased $347.2 million for the Benefits and Protection segment primarily due to the one-time impact of the YRT Reinsurance Transactions in 2024. The liability for future policy benefits remeasurement (gain) loss change was primarily due to the favorable effect of $442.1 million of prior year changes in cost of reinsurance cash flow assumptions driven by the one-time impact of the YRT Reinsurance Transactions and a $45.4 million impact driven by actuarial assumption updates and model refinements. The market risk benefit remeasurement (gain) loss change was primarily due to the $78.0 million unfavorable impact from the change in fair value of the MRB asset (liability), excluding impacts of nonperformance risk, primarily driven by changes in market movements. This change was partially offset by a $64.1 million favorable impact from periodic and final settlements for derivatives used to hedge MRBs. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 10, Market Risk Benefits” for further information on market effects. Operating expenses increased primarily due to a $79.3 million increase in compensation costs, $65.4 million of impairments of our distribution agreement intangible asset and contract cost asset in Hong Kong and a $49.8 million increase in nondeferrable commission expense. The increases were partially offset by a $67.3 million decrease in amounts credited to employee accounts in a nonqualified defined contribution pension plan, a $41.0 million decrease resulting from a one-time expense accrual release in 2025 and a $19.3 million decrease in management fees. Income Taxes The effective income tax rate decreased to 6% for the nine months ended September 30, 2025 from 11% for the nine months ended September 30, 2024, primarily due to a 2% impact from our foreign valuation allowance, a 2% impact from foreign tax credits and a 1% impact from releasing unrecognized tax benefits. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 13, Income Taxes” for a reconciliation between the U.S. corporate income tax rate and the effective income tax rate. Results of Operations by Segment For results of operations by segment see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 18, Segment Information.” Retirement and Income Solutions Segment Retirement and Income Solutions Segment Summary Financial Data Net revenue and average monthly account values are key metrics used to understand Retirement and Income Solutions earnings growth. Net revenue, which is used only at the segment level, is defined as operating revenues less benefits, claims and settlement expenses; liability for future policy benefits remeasurement (gain) loss; market risk benefit remeasurement (gain) loss and dividends to policyholders. Net revenue is impacted by: (1) changes in the equity markets and interest rates and (2) the difference between investment income earned on the underlying general account assets and the interest rate credited to the contracts. Average monthly account values include the net balances that customers have accumulated within their account, along with future policy benefits for retirement payout products. Average monthly account values are primarily impacted by net customer cash flows and credit market performance. 132 Table of Contents The following table presents the Retirement and Income Solutions segment net revenue and average monthly account values for the periods indicated: For the three months ended For the nine months ended September 30, September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) Net revenue (in millions) $ 751.7 $ 679.4 $ 72.3 $ 2,189.8 $ 2,071.7 $ 118.1 Average monthly account values (in billions) $ 609.0 $ 559.2 $ 49.8 $ 584.5 $ 539.1 $ 45.4 The following table presents certain summary financial data relating to the Retirement and Income Solutions segment for the periods indicated: For the three months ended For the nine months ended September 30, September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Operating revenues: Premiums and other considerations $ 566.5 $ 471.7 $ 94.8 $ 1,824.0 $ 2,236.8 $ (412.8) Fees and other revenues 459.3 453.2 6.1 1,334.7 1,332.0 2.7 Net investment income 860.4 761.5 98.9 2,521.0 2,244.3 276.7 Total operating revenues 1,886.2 1,686.4 199.8 5,679.7 5,813.1 (133.4) Expenses: Benefits, claims and settlement expenses, including dividends to policyholders 1,144.1 984.6 159.5 3,504.2 3,718.8 (214.6) Liability for future policy benefits remeasurement gain (10.5) (2.4) (8.1) (18.9) (5.2) (13.7) Market risk benefit remeasurement loss 0.9 24.8 (23.9) 4.6 27.8 (23.2) Operating expenses 441.3 433.3 8.0 1,303.0 1,295.6 7.4 Total expenses 1,575.8 1,440.3 135.5 4,792.9 5,037.0 (244.1) Pre-tax operating earnings attributable to noncontrolling interest 0.1 — 0.1 0.7 — 0.7 Pre-tax operating earnings $ 310.3 $ 246.1 $ 64.2 $ 886.1 $ 776.1 $ 110.0 Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Pre-Tax Operating Earnings Pre-tax operating earnings increased due to an increase in our net revenue, which was slightly offset by an increase in operating expenses as described below. Net Revenue Net revenue increased primarily due to a $28.7 million impact associated with actuarial assumption updates and model refinements, which were favorable in 2025 compared to unfavorable in 2024, a $24.2 million impact due to growth in the business and a $6.1 million increase in fee revenue primarily due to an increase in average monthly account values, which largely resulted from more favorable financial markets. Operating Expenses Operating expenses increased primarily due to a $10.6 million increase in staff-related costs. 133 Table of Contents Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Pre-Tax Operating Earnings Pre-tax operating earnings increased due to an increase in our net revenue, which was slightly offset by an increase in operating expenses as described below. Net Revenue Net revenue increased primarily due to a $68.4 million impact due to growth in the business and a $28.7 million impact associated with actuarial assumption updates and model refinements, which were favorable in 2025 compared to unfavorable in 2024. Operating Expenses Operating expenses increased primarily due to a $27.7 million increase in staff-related costs, partially offset by a $19.4 million impact from a one-time expense accrual release in 2025. Principal Asset Management Segment AUM AUM forms the basis for generating our management fee revenues. However, in Chile, the Cuprum business operates differently, as most fees are collected with each deposit made by mandatory retirement customers, based on a capped salary level rather than asset levels. AUM growth is primarily driven by two factors: market performance and net cash flow. Market performance encompasses the returns from equity, fixed income, real estate and other alternative investments, while net cash flow reflects client deposits and withdrawals. Revenue growth increasingly depends on the fee levels associated with these deposits and withdrawals, which can vary significantly depending on the business or product mix. Additionally, our non-U.S. results are influenced by fluctuations in foreign currency exchange rates relative to the U.S. dollar. The AUM of our foreign subsidiaries is converted to U.S. dollars at the end of the reporting period using spot exchange rates, while revenue and expenses are translated using average exchange rates for the reporting period. The following table presents the AUM rollforward for assets managed by the Principal Asset Management segment for the periods indicated. For the three months ended September 30, For the nine months ended September 30, 2025 2024 2025 2024 (in billions) AUM, beginning of period $ 723.0 $ 670.6 $ 683.4 $ 668.3 Net cash flow — (0.9) (7.4) (4.4) Market performance 27.0 36.9 59.4 59.9 Other (1) 1.6 (1.1) 1.6 (1.9) Operations disposed (2) (0.8) — (2.5) — Effect of exchange rates 1.5 5.6 17.8 (10.8) AUM, end of period $ 752.3 $ 711.1 $ 752.3 $ 711.1 (1) Includes a $(1.3) billion from a capped-fee arrangement in 2024. This redemption has no impact on future fee revenues. (2) Third quarter 2025 includes withdrawals related to certain exited pension business in Hong Kong. Third and second quarters of 2025 include the divestment of Post Advisory Group. First quarter 2025 includes the divestment of Origin Asset Management. 134 Table of Contents Principal Asset Management Segment Summary Financial Data The following table presents certain summary financial data relating to the Principal Asset Management segment for the periods indicated: For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Operating revenues: Premiums and other considerations $ 0.5 $ 4.8 $ (4.3) $ 6.1 $ 18.0 $ (11.9) Fees and other revenues 547.1 527.9 19.2 1,596.7 1,539.9 56.8 Net investment income 179.5 207.4 (27.9) 514.5 522.3 (7.8) Total operating revenues 727.1 740.1 (13.0) 2,117.3 2,080.2 37.1 Expenses: Benefits, claims and settlement expenses 60.9 81.8 (20.9) 233.7 260.1 (26.4) Liability for future policy benefits remeasurement (gain) loss (0.8) 0.2 (1.0) (0.9) 0.1 (1.0) Operating expenses 387.9 384.9 3.0 1,172.8 1,163.7 9.1 Total expenses 448.0 466.9 (18.9) 1,405.6 1,423.9 (18.3) Pre-tax operating earnings attributable to noncontrolling interest 4.4 4.5 (0.1) 13.1 11.1 2.0 Pre-tax operating earnings $ 274.7 $ 268.7 $ 6.0 $ 698.6 $ 645.2 $ 53.4 Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Pre-Tax Operating Earnings Pre-tax operating earnings increased in our Investment Management operations due to $19.4 million higher management fee revenue as a result of increased average AUM, which was partially offset by $3.4 million lower performance fee revenue primarily in our real estate business. Pre-tax operating earnings decreased in our International Pension operations due to $9.2 million lower fees primarily due to the loss of administrative fees related to the transition to a new administrative platform in conjunction with MPF system reform in Hong Kong and $4.4 million lower earnings from our equity method investments in Brazil, primarily as a result of our prior year actuarial assumption review and other updates. This decrease was partially offset by $4.7 million of lower operating expenses in Hong Kong. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Pre-Tax Operating Earnings Pre-tax operating earnings increased in our Investment Management operations due to $51.9 million higher management fee revenue as a result of increased average AUM, which was partially offset by $15.7 million increase in variable compensation expense. Pre-tax operating earnings increased in our International Pension operations primarily due to $15.2 million of increased fees from increased business, $15.2 million of favorable relative market performance on our required regulatory investments and $14.0 million increased variable investment income. These improvements were partially offset by $15.3 million lower earnings from our equity method investments in Brazil, primarily as a result of our prior year actuarial assumption review and other updates, and $10.9 million of foreign currency headwinds. Benefits and Protection Segment Benefits and Protection Segment Summary Financial Data Premium and fees are a key metric for growth in the Benefits and Protection segment. We receive premiums on our specialty benefits insurance products as well as our traditional life insurance products. Fees are generated from our universal life, variable universal life and indexed universal life insurance products. We use several reinsurance programs to help manage the mortality and morbidity risk. Premium and fees are reported net of reinsurance premiums. 135 Table of Contents The following table presents the Benefits and Protection segment premium and fees for the periods indicated: For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Premium and fees: Specialty Benefits $ 845.2 $ 818.8 $ 26.4 $ 2,516.9 $ 2,433.6 $ 83.3 Life Insurance 248.9 241.1 7.8 722.0 702.1 19.9 The following table presents certain summary financial data relating to the Benefits and Protection segment for the periods indicated: For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Operating revenues: Premiums and other considerations $ 972.8 $ 941.9 $ 30.9 $ 2,875.7 $ 2,788.8 $ 86.9 Fees and other revenues 121.1 117.8 3.3 362.7 346.3 16.4 Net investment income 166.6 153.8 12.8 482.6 451.5 31.1 Total operating revenues 1,260.5 1,213.5 47.0 3,721.0 3,586.6 134.4 Expenses: Benefits, claims and settlement expenses 705.0 679.7 25.3 2,123.4 1,990.0 133.4 Dividends to policyholders 29.9 14.9 15.0 71.9 68.0 3.9 Liability for future policy benefits remeasurement loss 72.8 97.1 (24.3) 68.7 151.7 (83.0) Operating expenses 366.3 357.4 8.9 1,103.4 1,068.4 35.0 Total expenses 1,174.0 1,149.1 24.9 3,367.4 3,278.1 89.3 Pre-tax operating earnings $ 86.5 $ 64.4 $ 22.1 $ 353.6 $ 308.5 $ 45.1 Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Pre-Tax Operating Earnings (Losses) Pre-tax operating earnings in our Specialty Benefits business increased $27.2 million from improved claims experience and $25.9 million due to favorable actuarial assumption updates in 2025 compared to unfavorable in 2024. Pre-tax operating earnings in our Life Insurance business decreased $18.6 million due to more unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024 and $8.6 million from negative claims experience. Operating Revenues Premiums and fees increased primarily due to growth in the business. Net investment income in our Life Insurance business increased $5.1 million due to growth in invested assets, $4.7 million from mark-to-market changes on options associated with our indexed universal life insurance and $1.8 million from higher yields on invested assets. Total Expenses Benefits, claims and settlement expenses in our Specialty Benefits business increased $16.1 million from growth in the business and $16.1 million due to unfavorable actuarial assumption updates in 2025 compared to favorable in 2024, offset by $27.2 million from improved claims experience. Benefits, claims and settlement expenses in our Life Insurance business increased $8.6 million from unfavorable claims experience, $5.8 million due to mark-to-market changes on options associated with our indexed universal life insurance and $4.7 million due to growth in the business. 136 Table of Contents Dividends to policyholders in our Life Insurance business increased $15.0 million primarily due to a change in the policyholder dividend obligation. Liability for future policy benefits remeasurement (gain) loss in our Specialty Benefits business changed $40.9 million due to favorable actuarial assumption updates in 2025 compared to unfavorable in 2024. Liability for future policy benefits remeasurement loss in our Life Insurance business increased $22.4 million due to more unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024. Operating expenses increased primarily due to growth in the business. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Pre-Tax Operating Earnings Pre-tax operating earnings in our Specialty Benefits business increased $37.8 million from improved claims experience, $25.9 million due to favorable actuarial assumption updates in 2025 compared to unfavorable in 2024 and $10.7 million due to growth. Pre-tax operating earnings in our Life Insurance business decreased $41.8 million from negative claims experience and $18.6 million due to more unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024, offset by $17.0 million liability for future policy benefits remeasurement gain due to underlying claims experience, $6.0 million from higher yields on invested assets and a $3.2 million one-time expense accrual release in 2025. Operating Revenues Premiums and fees in our Specialty Benefits business increased $83.3 million due to growth in the business. Premiums and fees in our Life Insurance business increased $11.4 million due to the one-time impact of the YRT Reinsurance Transactions in 2024 and $7.0 million due to growth in the business. Net investment income in our Specialty Benefits business increased $13.8 million primarily from higher yields on invested assets. Net investment income in our Life Insurance business increased $15.0 million from growth in invested assets and $6.0 million from higher yields on invested assets, offset by a decrease of $3.7 million from mark-to-market changes on options associated with our indexed universal life insurance. Total Expenses Benefits, claims and settlement expenses in our Specialty Benefits business increased $50.8 million due to growth in the business and $16.1 million due to unfavorable actuarial assumption updates in 2025 compared to favorable in 2024, offset by $37.8 million from improved claims experience. Benefits, claims and settlement expenses in our Life Insurance business increased $58.0 million due to the one-time impact of the YRT Reinsurance Transactions in 2024 and $41.8 million from unfavorable claims experience. Dividends to policyholders in our Life Insurance business increased $6.6 million due to higher dividends on our Closed Block business, offset by $3.5 million due to less unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024. Liability for future policy benefits remeasurement (gain) loss in our Specialty Benefits business changed $40.9 million due to favorable actuarial assumption updates in 2025 compared to unfavorable in 2024 and $6.3 million due to changes in underlying claims experience. Liability for future policy benefits remeasurement loss in our Life Insurance business decreased $41.2 million due to the one-time impact of the YRT Reinsurance Transactions in 2024 and $17.0 million due to changes in underlying claims experience, offset by $22.4 million due to more unfavorable actuarial assumption updates, model refinements and other updates in 2025 compared to 2024. Operating expenses in our Specialty Benefits business increased $26.0 million due to growth in the business and $20.5 million due to higher net commissions, offset by a $7.1 million decrease due to a one-time expense accrual release in 2025. Operating expenses in our Life Insurance business decreased $3.4 million primarily due to a one-time expense accrual release in 2025. 137 Table of Contents Corporate Segment Corporate Segment Summary Financial Data The following table presents certain summary financial data relating to the Corporate segment for the periods indicated: For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Operating revenues: Total operating revenues $ 24.2 $ 31.1 $ (6.9) $ 82.9 $ 68.6 $ 14.3 Expenses: Total expenses 118.1 101.8 16.3 366.8 334.1 32.7 Pre-tax operating earnings (losses) attributable to noncontrolling interest (2.3) 8.7 (11.0) (5.5) 6.2 (11.7) Pre-tax operating losses $ (91.6) $ (79.4) $ (12.2) $ (278.4) $ (271.7) $ (6.7) Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Pre-Tax Operating Losses Pre-tax operating losses increased primarily due to a $5.5 million increase in compensation costs and a $3.4 million decrease in interest income related to tax settlements. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Pre-Tax Operating Losses Pre-tax operating losses increased primarily due to a $15.2 million increase in compensation costs, partially offset by an $8.0 million increase in interest income related to tax settlements. Liquidity and Capital Resources Liquidity and capital resources represent the overall strength of a company and its ability to generate strong cash flows, borrow funds at a competitive rate and raise new capital to meet operating and growth needs. We are monitoring our liquidity closely and feel confident in our ability to meet all long-term obligations to customers, policyholders and debt holders. Our sources of strength include our laddered long-term debt maturities with the next maturity occurring in November 2026, access to revolving credit facility and contingent funding arrangements, a strong risk-based capital position and our available cash and liquid assets. Our legal entity structure has an impact on our ability to meet cash flow needs as an organization. Following is a simplified organizational structure. 138 Table of Contents Liquidity Our liquidity requirements have been and will continue to be met by funds from consolidated operations as well as the issuance of commercial paper, common stock, debt or other capital securities and borrowings from credit facilities. We believe the cash flows from these sources are sufficient to satisfy the current liquidity requirements of our operations, including reasonably foreseeable contingencies. We maintain a level of cash and securities which, combined with expected cash inflows from investments and operations, we believe to be adequate to meet anticipated short-term and long-term payment obligations. We will continue our prudent capital management practice of regularly exploring options available to us to maximize capital flexibility, including accessing the capital markets and careful attention to and management of expenses. We perform rigorous liquidity stress testing to ensure our asset portfolio includes sufficient high quality liquid assets that could be utilized to bolster our liquidity position under increasingly stressed market conditions. These assets could be utilized as collateral for secured borrowing transactions with various third parties or by selling the securities in the open market if needed. We also manage liquidity risk by limiting the sales of liabilities with features such as puts or other options that can be exercised at inopportune times. For example, as of September 30, 2025, approximately $14.0 billion, or 99%, of our institutional guaranteed investment contracts and funding agreements cannot be redeemed by contractholders prior to maturity. Our individual annuity liabilities also contain surrender charges and other provisions limiting early surrenders. The following table summarizes the withdrawal characteristics of our domestic general account investment contracts as of September 30, 2025. Contractholder funds, net of reinsurance Percentage (in millions) Not subject to discretionary withdrawal $ 14,907.7 51.2 % Subject to discretionary withdrawal with adjustments: Specified surrender charges 6,641.8 22.8 Market value adjustments 7,575.8 26.0 Subject to discretionary withdrawal without adjustments 0.6 — Total domestic investment contracts $ 29,125.9 100.0 % Universal life insurance and certain traditional life insurance policies are also subject to discretionary withdrawals by policyholders. However, life insurance policies tend to be less susceptible to withdrawal than our investment contracts because policyholders may be subject to a new underwriting process in order to obtain a new life insurance policy. In addition, our life insurance liabilities include surrender charges to discourage early surrenders. We had the following short-term credit financing structures available with various financial institutions as of September 30, 2025: Amount Obligor/Applicant Financing structure Maturity Capacity outstanding (3) (in millions) Principal Life (1) Credit facility October 2027 $ 800.0 $ — Principal Compañía de Seguros de Vida Chile S.A. (2) Unsecured lines of credit 79.7 10.2 Principal International de Chile S.A. (2) Unsecured lines of credit 22.5 2.8 Total $ 902.2 $ 13.0 (1) The credit facility is supported by sixteen banks. (2) The unsecured lines of credit can be used for repurchase agreements or other borrowings. Each line has a maturity of less than one year. (3) The amount outstanding is reported in short-term debt on the consolidated statements of financial position. 139 Table of Contents The revolving credit facility is committed and available for general corporate purposes. The credit facility also provides 100% back-stop support for our commercial paper program, of which we had no outstanding balances as of September 30, 2025 and December 31, 2024. Most of the banks supporting the credit facility have other relationships with us. Due to the financial strength and the strong relationships we have with these providers, we are comfortable we have very low risk the financial institutions would be unable or unwilling to fund this facility. The Holding Companies: PFG and PFS. The principal sources of funds available to our parent holding company, PFG, are dividends from subsidiaries as well as its ability to borrow funds at competitive rates and raise capital to meet operating and growth needs. These funds are used by PFG to meet its obligations, which include the payment of dividends on common stock, debt service and the repurchase of stock. The declaration and payment of common stock dividends is subject to the discretion of our Board and will depend on our overall financial condition, results of operations, capital levels, cash requirements, future prospects, receipt of dividends or other distributions from Principal Life (as described below), risk management considerations and other factors deemed relevant by the Board. No significant restrictions limit the payment of dividends by PFG, except those generally applicable to corporations incorporated in Delaware. Dividends or other distributions from Principal Life, our primary subsidiary, are limited by Iowa law. Under Iowa law, Principal Life may pay dividends or make other distributions only from the earned surplus arising from its business and must receive the prior approval of the Commissioner of Insurance of the State of Iowa (the “Commissioner”) to pay stockholder dividends or make any other distribution if such distribution would exceed certain statutory limitations. Iowa law gives the Commissioner discretion to disapprove requests for distributions in excess of these limitations. Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus. Based on statutory results for the year ended December 31, 2024, the ordinary stockholder dividend limitation for Principal Life is approximately $1,313.1 million in 2025. However, because the dividend test is based on dividends previously paid over rolling twelve month periods, if paid before a specified date during 2025, some or all of such dividends may be extraordinary and require regulatory approval. Total stockholder dividends paid by Principal Life to its parent for the nine months ended September 30, 2025, were $955.0 million, all of which was extraordinary and approved by the Commissioner. As of September 30, 2025, we had $2,675.2 million of cash and liquid assets held in our holding companies and other subsidiaries, which is available for corporate purposes. Corporate balances held in foreign holding companies meet the indefinite reinvestment exception. Operations. Our primary consolidated cash flow sources are premiums from insurance products, pension and annuity deposits, asset management fee revenues, administrative services fee revenues, income from investments and proceeds from the sales or maturity of investments. Cash outflows consist primarily of payment of benefits to policyholders and beneficiaries, income and other taxes, current operating expenses, payment of dividends to policyholders, payments in connection with investments acquired, payments made to acquire subsidiaries, payments relating to policy and contract surrenders, withdrawals, policy loans, interest payments and repayment of short-term debt and long-term debt. Our investment strategies are generally intended to provide adequate funds to pay benefits without forced sales of investments. For a discussion of our investment objectives and strategies, see “Investments.” Cash Flows. Cash flow activity, as reported in our consolidated statements of cash flows, provides relevant information regarding our sources and uses of cash. The following discussion of our operating, investing and financing portions of the cash flows excludes cash flows attributable to the separate accounts. Net cash provided by operating activities was $2,793.0 million and $3,143.9 million for the nine months ended September 30, 2025 and 2024, respectively. Our insurance business typically generates positive cash flows from operating activities, as premiums collected from our insurance products and investment income received exceed acquisition costs, benefits paid, redemptions and operating expenses. These positive cash flows are then invested to support the obligations of our insurance and investment products and required capital supporting these products. Our cash flows from operating activities are affected by the timing of premiums, fees and investment income received and benefits and expenses paid. The decrease in cash provided by operating activities in 2025 compared to 2024 was primarily due to fluctuations in receivables and payables associated with the timing of settlements. 140 Table of Contents Net cash used in investing activities was $1,034.6 million and $1,628.6 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease in cash used in investing activities was primarily due to lower net purchases of available-for-sale securities in 2025 as compared to 2024. This was partially offset by net purchases of mortgage loans in 2025 as compared to net sales in 2024. Net cash used in financing activities was $833.2 million and $48.5 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in cash used in financing activities was due to a $400.0 million repayment of long-term debt that matured during 2025 and a lower increase in both banking operation deposits and net investment contract deposits in 2025 as compared to 2024. Guarantors and Issuers of Guaranteed Securities. PFG has issued certain notes pursuant to transactions registered under the Securities Act of 1933. Such notes include all currently outstanding senior notes (the “registered notes”). For additional information on the senior notes, see Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 13, Debt” in our Annual Report on Form 10-K for the year ended December 31, 2024. PFS, a wholly owned subsidiary of PFG, has guaranteed each of the registered notes on a full and unconditional basis. The full and unconditional guarantees require PFS to satisfy the obligations of the guaranteed security immediately, if and when PFG has failed to make a scheduled payment thereunder. If PFS does not make such payment, any holder of the guaranteed security may immediately bring suit directly against PFS for payment of amounts due and payable. No other subsidiary of PFG has guaranteed any of the registered notes. Summary financial information is presented below on a combined basis for PFG and PFS (the “obligor group”) and transactions between the obligor group have been eliminated. The summary financial information excludes subsidiaries that are not issuers or guarantors. Any investments by the obligor group in other subsidiaries have been excluded. September 30, 2025 December 31, 2024 (in millions) Summary Statements of Financial Position Information: Total investments $ 636.2 $ 640.6 Cash and cash equivalents 506.0 357.3 Goodwill 618.5 618.5 Other intangibles 371.6 391.2 Other assets 342.0 313.3 Due from non-obligor subsidiaries 44.0 42.8 Total assets 2,533.4 2,367.3 Long-term debt 3,921.7 3,930.6 Other liabilities 370.2 351.2 Due to non-obligor subsidiaries 803.2 732.2 Total liabilities 5,238.0 5,135.8 For the nine months ended For the year ended September 30, 2025 December 31, 2024 (in millions) Summary Statements of Operations Information: Total revenues $ 53.0 $ 130.6 Total expenses 396.3 497.1 Net loss (272.0) (300.6) 141 Table of Contents Shelf Registration. Under our current shelf registration, we have the ability to issue, in unlimited amounts, unsecured senior debt securities or subordinated debt securities, junior subordinated debt, preferred stock, common stock, warrants, depositary shares, purchase contracts and purchase units of PFG. Our wholly owned subsidiary, PFS, may guarantee, fully and unconditionally or otherwise, our obligations with respect to any non-convertible securities, other than common stock, described in the shelf registration. Short-Term Debt. The components of short-term debt were as follows: September 30, 2025 December 31, 2024 (in millions) Revolving line of credit $ — $ 119.0 Other recourse short-term debt 13.0 33.7 Total short-term debt $ 13.0 $ 152.7 The short-term credit facilities are used for general corporate purposes and borrowings outstanding can fluctuate as part of working capital management. Long-Term Debt. On March 14, 2025, we exercised our rights in full under the 2028 P-Caps to issue senior notes in exchange for Eligible Assets. Proceeds from the sale of Eligible Assets were used to repay our senior 2025 Notes that matured on May 15, 2025. For long-term debt information, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 12, Long-Term Debt.” Contingent Funding Agreements for Senior Debt Issuance. On March 6, 2025, we entered into a contingent funding agreement that gives us the right at any time over a thirty-year period to issue up to $500.0 million of senior notes. In March 2018, we entered into two contingent funding agreements that give us the right at any time over a ten-year or thirty-year period to issue up to $400.0 million or $350.0 million, respectively, of senior notes. In March 2025, we exercised our right to issue $400.0 million of senior notes under the ten-year contingent funding agreement. For information on the contingent funding agreements, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 12, Long-Term Debt.” under the caption “Contingent Funding Agreements for Senior Debt Issuance.” Stockholders’ Equity. The following table summarizes our return of capital to common stockholders. For the nine months ended For the year ended September 30, 2025 December 31, 2024 (in millions) Dividends to stockholders $ 511.6 $ 658.4 Repurchase of common stock (1) 623.3 1,042.4 Total cash returned to common stockholders $ 1,134.9 $ 1,700.8 (1) Includes common stock utilized to execute certain stock incentive awards and shares purchased as part of publicly announced programs. 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 $1.5 billion of our outstanding common stock, which has no expiration date. See Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds,” for information about our share repurchase authorizations. For additional stockholders’ equity information, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 16, Stockholders’ Equity.” 142 Table of Contents Capitalization The following table summarizes our capital structure: September 30, 2025 December 31, 2024 ($ in millions) Debt: Short-term debt $ 13.0 $ 152.7 Long-term debt 3,924.6 3,955.3 Total debt 3,937.6 4,108.0 Total stockholders’ equity attributable to PFG 11,665.5 11,086.4 Total capitalization $ 15,603.1 $ 15,194.4 Debt to equity 34 % 37 % Debt to capitalization 25 % 27 % Contractual Obligations and Contractual Commitments As of September 30, 2025, we had no unique material cash requirements from known contractual and other obligations. Off-Balance Sheet Arrangements Variable Interest Entities. We have relationships with various types of special purpose entities and other entities where we have a variable interest as described in Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 3, Variable Interest Entities.” We have made commitments to fund certain limited partnerships, some of which are classified as unconsolidated variable interest entities. 143 Table of Contents Guarantees and Indemnifications. As of September 30, 2025, no significant changes to guarantees and indemnifications have occurred since December 31, 2024. For guarantee and indemnification information, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 15, Contingencies, Guarantees and Indemnifications” under the caption, “Guarantees and Indemnifications.” Financial Strength and Credit Ratings Our ratings are influenced by the relative ratings of our peers/competitors as well as many other factors including our operating and financial performance, capital levels, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage (i.e., debt), risk exposures, operating leverage and other factors. We have had no significant changes or actions in ratings and rating outlooks that have occurred from January 1, 2025, through the date of this filing. The following table summarizes our significant financial strength and debt ratings from the major independent rating organizations. A rating is not a recommendation to buy, sell or hold securities. Such a rating may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. A.M. Best Fitch Moody’s S&P Last review date April 2025 May 2025 June 2025 April 2025 Current outlook Stable Stable Stable Stable Principal Financial Group Senior Unsecured Debt a A- Baa1 A- Long-Term Issuer Default Rating A Principal Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Issuer Credit Rating aa Commercial Paper AMB‑1+ P-1 A-1+ Principal National Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Fair Value Measurement 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 fair value hierarchy gives the highest priority (Level 1) to unadjusted quoted prices in active markets for identical assets or liabilities and gives the lowest priority (Level 3) to unobservable inputs. 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. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 17, Fair Value Measurements” for further details, including a reconciliation of changes in Level 3 fair value measurements. As of September 30, 2025, 47% of our net assets (liabilities) were Level 1, 50% were Level 2 and 3% were Level 3. Excluding separate account assets as of September 30, 2025, 3% of our net assets (liabilities) were Level 1, 89% were Level 2 and 8% were Level 3. As of December 31, 2024, 47% of our net assets (liabilities) were Level 1, 50% were Level 2 and 3% were Level 3. Excluding separate account assets as of December 31, 2024, 4% of our net assets (liabilities) were Level 1, 87% were Level 2 and 9% were Level 3. 144 Table of Contents Changes in Level 3 Fair Value Measurements Net assets (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2025, were $7,051.3 million as compared to $8,046.3 million as of December 31, 2024. The decrease was primarily related to issuances of investment and universal life contracts, a decrease in the funds withheld payable embedded derivative net asset and settlements of mortgage loans. Investments We had total consolidated assets as of September 30, 2025, of $334,491.8 million, of which $107,608.1 million were invested assets. A portion of our invested assets represent funds withheld backing reserves as part of coinsurance with funds withheld reinsurance agreements. The funds withheld assets and associated net investment income and net realized capital gains (losses) are not included in the discussions below as the investment risk is passed to the reinsurer. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 11, Reinsurance” for more information on the funds withheld assets. The rest of our total consolidated assets are comprised primarily of separate account assets for which we do not bear investment risk; therefore, the discussion and financial information below does not include such assets. Overall Composition of Invested Assets Invested assets as of September 30, 2025, were predominantly high quality and broadly diversified across asset class, individual credit, industry and geographic location. Asset allocation is determined based on cash flow and the risk/return requirements of our products. As shown in the following table, the major categories of invested assets are fixed maturities and mortgage loans. September 30, 2025 Investments excluding Funds funds withheld withheld Total (in millions) Fixed maturities $ 58,849.3 $ 13,830.4 $ 72,679.7 Equity securities 1,648.7 0.3 1,649.0 Mortgage loans 18,607.0 2,074.2 20,681.2 Real estate 2,387.1 — 2,387.1 Policy loans 870.7 — 870.7 Other investments 7,765.2 1,575.2 9,340.4 Total invested assets 90,128.0 17,480.1 107,608.1 Cash and cash equivalents 4,478.8 658.3 5,137.1 Total invested assets and cash $ 94,606.8 $ 18,138.4 $ 112,745.2 December 31, 2024 Investments excluding Funds funds withheld withheld Total (in millions) Fixed maturities $ 55,455.3 $ 13,819.0 $ 69,274.3 Equity securities 2,294.7 0.3 2,295.0 Mortgage loans 18,271.8 2,212.4 20,484.2 Real estate 2,464.5 — 2,464.5 Policy loans 867.5 — 867.5 Other investments 6,847.5 1,142.8 7,990.3 Total invested assets 86,201.3 17,174.5 103,375.8 Cash and cash equivalents 3,131.8 1,080.1 4,211.9 Total invested assets and cash $ 89,333.1 $ 18,254.6 $ 107,587.7 145 Table of Contents Investment Results Net Investment Income The following table presents the yield and investment income, excluding net realized capital gains and losses, for our invested assets for the periods indicated. We calculate annualized yields using a simple average of asset classes at the beginning and end of the reporting period. The yields for available-for-sale fixed maturities are calculated using amortized cost. All other yields are calculated using carrying amounts. For the three months ended September 30, For the nine months ended September 30, 2025 2024 Increase (decrease) 2025 2024 Increase (decrease) Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Amount ($ in millions) Fixed maturities 5.0 % $ 763.4 5.3 % $ 747.9 (0.3) % $ 15.5 5.1 % $ 2,288.1 5.0 % $ 2,079.9 0.1 % $ 208.2 Equity securities 8.2 33.3 8.8 34.1 (0.6) (0.8) 6.5 96.8 5.6 64.0 0.9 32.8 Mortgage loans – commercial 4.9 176.9 4.4 155.9 0.5 21.0 4.6 499.8 4.3 458.7 0.3 41.1 Mortgage loans – residential 5.1 53.2 5.3 48.0 (0.2) 5.2 5.7 166.5 5.3 144.4 0.4 22.1 Real estate 4.9 29.7 11.9 71.9 (7.0) (42.2) 5.6 101.0 8.1 144.3 (2.5) (43.3) Policy loans 5.3 11.6 5.4 11.2 (0.1) 0.4 5.3 34.3 5.3 32.7 — 1.6 Cash and cash equivalents 5.4 51.5 6.7 70.4 (1.3) (18.9) 5.1 145.6 6.2 202.5 (1.1) (56.9) Other investments 7.9 149.5 6.3 105.3 1.6 44.2 7.1 391.0 8.2 404.4 (1.1) (13.4) Total 5.3 1,269.1 5.5 1,244.7 (0.2) 24.4 5.2 3,723.1 5.3 3,530.9 (0.1) 192.2 Investment expenses (0.3) (68.6) (0.3) (77.1) — 8.5 (0.3) (194.1) (0.3) (205.0) — 10.9 Net investment income 5.0 % $ 1,200.5 5.2 % $ 1,167.6 (0.2) % $ 32.9 4.9 % $ 3,529.0 5.0 % $ 3,325.9 (0.1) % $ 203.1 Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Net investment income increased primarily due to higher average invested assets in fixed maturities and higher income associated with derivatives in fair value hedges and other alternative investments for our U.S. operations. These increases were partially offset by lower yields in fixed maturities and the sale of certain value-add real estate in third quarter of 2024 for our U.S. operations. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Net investment income increased primarily due to higher average invested assets and yields in fixed maturities for our U.S. operations. These increases were partially offset by lower income associated with currency derivatives for our U.S. operations. Net Realized Capital Gains (Losses) The following table presents the contributors to net realized capital gains and losses for the periods indicated. The amounts below do not include net realized capital gains (losses) on funds withheld assets that are not passed to the reinsurer, which are separately reported on the consolidated statements of operations. For the three months ended September 30, For the nine months ended September 30, Increase Increase 2025 2024 (decrease) 2025 2024 (decrease) (in millions) Fixed maturities, available-for-sale – credit losses, including credit sales (1) $ (24.9) $ (2.8) $ (22.1) $ (34.9) $ (11.5) $ (23.4) Commercial mortgage loans – credit losses (1.1) (50.4) 49.3 (14.5) (93.8) 79.3 Other – credit gains (losses) (5.9) 1.3 (7.2) (9.5) (2.7) (6.8) Fixed maturities, available-for-sale and trading – noncredit 4.7 13.7 (9.0) (45.3) (18.6) (26.7) Derivatives and related hedge activities 2.5 36.2 (33.7) (33.8) 41.2 (75.0) Other gains 110.4 79.4 31.0 112.0 146.7 (34.7) Net realized capital gains (losses) (2) $ 85.7 $ 77.4 $ 8.3 $ (26.0) $ 61.3 $ (87.3) (1) Includes credit sales, adjustments to the credit loss valuation allowance, write-offs and recoveries on available-for-sale securities. (2) Net realized capital gains (losses) can be volatile due to credit losses from invested assets, mark-to-market adjustments of certain invested assets and our decision to sell invested assets. 146 Table of Contents Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Net realized capital gains increased primarily due to decreased losses on non-hedged interest rate derivatives due to changes in rates, decreased losses on commercial mortgage loan reserve changes and increased gains on equity real estate sales. These changes were partially offset by increased credit losses on available-for-sale fixed maturities and increased losses on currency derivatives. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Net realized capital losses increased primarily due to losses versus gains on currency derivatives, the write-down of an intangible asset in 2025, increased losses on non-hedged interest rate derivatives due to changes in rates, decreased gains on equity real estate sales and increased losses on non-credit available-for-sale fixed maturities. These changes were partially offset by gains versus losses on GMWB/RILA activities and decreased losses on commercial mortgage loan reserve changes. U.S. Investment Operations In the following sections, we provide details about U.S. Investment Operations, excluding investments held as part of coinsurance with funds withheld agreements. We believe the details of the composition of our investment portfolio excluding the funds withheld are most relevant to an understanding of our operations that are pertinent to investors because all funds withheld assets support obligations and liabilities relating to reinsurance agreements. Guidelines are in place to ensure the investment risk associated with these fund withheld assets are appropriately managed. See Note 11, Reinsurance, for further information on the funds withheld assets. Of our invested assets, $83,655.5 million were held by our U.S. operations as of September 30, 2025. Our U.S. invested assets are managed primarily by Principal Asset Management–Investment Management. Our Investment Committee, appointed by our Board, is responsible for establishing investment policies and monitoring risk limits and tolerances. Our primary investment objective is to maximize after-tax returns consistent with acceptable risk parameters. We seek to protect customers’ benefits by optimizing the risk/return relationship on an ongoing basis, through asset/liability matching, reducing credit risk, avoiding high levels of investments that may be redeemed by the issuer, maintaining sufficiently liquid investments and avoiding undue asset concentrations through diversification. We are exposed to two primary sources of investment risk: ● credit risk, relating to the uncertainty associated with the continued ability of an obligor to make timely payments of principal and interest and ● interest rate risk, relating to the market price and/or cash flow variability associated with changes in market yield curves. Our ability to manage credit risk is essential to our business and our profitability. We devote considerable resources to the credit analysis of each new investment. We manage credit risk through industry, issuer and asset class diversification. A dedicated committee, comprised of senior investment professional staff members, approves the credit rating for the fixed maturities we purchase. We have teams of security analysts, organized by industry and asset class, that analyze and monitor these investments. Investments held in the portfolio are monitored on a continuous basis with a formal review annually or more frequently if material events affect the issuer. The analysis includes both fundamental and technical factors. The fundamental analysis encompasses both quantitative and qualitative analysis of the issuer. The qualitative analysis includes an assessment of both accounting and management aggressiveness of the issuer. In addition, technical indicators such as stock price volatility and credit default swap levels are monitored. We regularly review our investments to determine whether we should re-rate them, employing the following criteria: ● material changes in the issuer’s revenues, margins, capital structure or collateral values; ● significant management or organizational changes; ● significant changes regarding the issuer’s industry; ● debt service coverage or cash flow ratios that fall below industry-specific thresholds; ● violation of financial covenants and ● other business factors that relate to the issuer. 147 Table of Contents We purchase credit default swaps to hedge certain credit exposures in our investment portfolio. We economically hedged credit exposure in our portfolio by purchasing credit default swaps with a notional amount of $105.0 million and $155.0 million as of September 30, 2025 and December 31, 2024, respectively. We sell credit default swaps and total return swaps to offer credit protection to investors when entering into synthetic replicating transactions. When selling credit protection, if there is an event of default by the referenced name, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security. When selling total return swaps, if there is an event of default by the referenced name, we are obligated to compensate the protection buyer for any decline in the price of the referenced security. For further information on credit derivatives sold, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 5, Derivative Financial Instruments” under the caption, “Credit Derivatives Sold.” Our use of derivatives exposes us to counterparty risk, or the risk that the counterparty fails to perform the terms of the derivative contract. We actively manage this risk by: ● obtaining approval of all new counterparties by the Investment Committee; ● establishing exposure limits that take into account non-derivative exposure we have with the counterparty as well as derivative exposure; ● performing similar credit analysis prior to approval on each derivatives counterparty that we do when lending money on a long-term basis; ● diversifying our risk across numerous approved counterparties; ● implementing credit support annex (collateral) agreements (“CSAs”) for over-the-counter derivative transactions or similar agreements with a majority of our counterparties to further limit counterparty exposures, which provide for netting of exposures; ● limiting exposure to A credit or better for over-the-counter derivative counterparties without CSAs; ● conducting stress-test analysis to determine the maximum exposure created during the life of a prospective transaction; ● daily monitoring of counterparty credit ratings, exposures and associated collateral levels and ● trading mandatorily cleared contracts through centralized clearinghouses. We manage our exposure on a net basis, whereby we net positive and negative exposures for each counterparty with agreements in place. For further information on derivative exposure, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 4, Investments” under the caption, “Balance Sheet Offsetting.” A dedicated risk management team is responsible for centralized monitoring of the commercial mortgage loan portfolio. We apply a variety of guidelines to minimize credit risk in our commercial mortgage loan portfolio. When considering new commercial mortgage loans, we review the cash flow fundamentals of the property, make a physical assessment of the underlying commercial real estate, conduct a comprehensive market analysis and compare against industry lending practices. We use a proprietary risk rating model to evaluate all new and substantially all existing loans within the portfolio. The proprietary risk model is designed to stress projected cash flows under simulated economic and market downturns. Our lending guidelines are typically 75% or less loan-to-value ratio and a debt service coverage ratio of at least 1.2 times. We analyze investments outside of these guidelines based on cash flow quality, tenancy and other factors. The following table presents loan-to-value and debt service coverage ratios for our brick and mortar commercial mortgage loans: Weighted average loan-to-value ratio Debt service coverage ratio September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 New mortgages 50 % 53 % 1.9 x 1.7 x Entire mortgage portfolio 49 % 50 % 2.3 x 2.3 x We also seek to manage call or prepayment risk arising from changes in interest rates. We assess and price for call or prepayment risks in all of our investments and monitor these risks in accordance with asset/liability management policies. The amortized cost and weighted average yield, calculated using amortized cost, of non-structured fixed maturity securities that will be callable at the option of the issuer, excluding securities with a make-whole provision, were $3,655.6 million and 4.8%, respectively, as of September 30, 2025, and $2,091.5 million and 4.0%, respectively, as of December 31, 2024. In addition, the amortized cost and weighted average yield of RMBS, residential collateralized mortgage obligations, and asset-backed securities - home equity with material prepayment risk were $8,843.0 million and 4.2%, respectively, as of September 30, 2025, and $8,401.9 million and 4.1%, respectively, as of December 31, 2024. 148 Table of Contents Our investment decisions and objectives are a function of the underlying risks and product profiles of each primary business operation. In addition, we diversify our product portfolio offerings to include products that contain features that will protect us against fluctuations in interest rates. Those features include adjustable crediting rates, policy surrender charges and market value adjustments on liquidations. For further information on our management of interest rate risk, see Item 3. “Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk.” Overall Composition of U.S. Invested Assets As shown in the following table, the major categories of U.S. invested assets are fixed maturities and mortgage loans. September 30, 2025 December 31, 2024 Carrying amount % of total Carrying amount % of total ($ in millions) Fixed maturities $ 56,236.5 67 % $ 52,960.3 66 % Equity securities 811.6 1 1,547.6 2 Mortgage loans 17,713.4 21 17,404.6 22 Real estate 2,385.9 3 2,463.7 3 Policy loans 855.6 1 852.5 1 Other investments 5,652.5 7 4,844.7 6 Total invested assets 83,655.5 100 % 80,073.4 100 % Cash and cash equivalents 4,181.5 2,882.9 Total invested assets and cash $ 87,837.0 $ 82,956.3 Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities that were diversified by category of issuer, as shown in the following table for the periods indicated. September 30, 2025 December 31, 2024 Carrying Percent Carrying Percent amount of total amount of total ($ in millions) U.S. government and agencies $ 1,204.2 2 % $ 1,102.6 2 % Non-U.S. governments 408.5 1 393.0 1 States and political subdivisions 5,541.3 10 4,836.3 9 Corporate - public 13,192.4 23 13,405.7 25 Corporate - private 14,738.2 26 13,193.4 25 Residential mortgage-backed pass-through securities 3,715.5 7 3,673.6 7 Commercial mortgage-backed securities 4,463.2 8 4,446.8 8 Residential collateralized mortgage obligations 4,692.0 8 4,043.3 8 Asset-backed securities 8,281.2 15 7,865.6 15 Total fixed maturities $ 56,236.5 100 % $ 52,960.3 100 % We believe it is desirable to hold residential mortgage-backed pass-through securities due to their credit quality and liquidity as well as portfolio diversification characteristics. Our portfolio is comprised of Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation pass-through securities. In addition, our residential collateralized mortgage obligation portfolio offers structural features that allow cash flows to be matched to our liabilities. We purchase CMBS to diversify the overall credit risks of the fixed maturities portfolio and to provide attractive returns. The primary risks in holding CMBS are structural and credit risks. Structural risks include the security’s priority in the issuer’s capital structure, the adequacy of and ability to realize proceeds from the collateral and the potential for prepayments. Credit risks involve collateral and issuer/servicer risk where collateral and servicer performance may deteriorate. CMBS are predominantly comprised of large pool securitizations that are diverse by property type, borrower and geographic dispersion. The risks to any CMBS deal are determined by the credit quality of the underlying loans and how those loans perform over time. Another key risk is the vintage of the underlying loans and the state of the markets during a particular vintage. 149 Table of Contents Similar to CMBS, we purchase ABS for diversification and to provide attractive returns. The primary risks in holding ABS are also structural and credit risks, which are similar to those noted above for CMBS. Our ABS portfolio is diversified by type of asset, issuer, and vintage. We actively monitor holdings of ABS to recognize adverse changes in the risk profile of each security. Prepayments in the ABS portfolio are, in general, insensitive to changes in interest rates or are insulated from such changes by call protection features. In the event we are subject to prepayment risk, we monitor the factors that impact the level of prepayment and prepayment speed for those ABS. In addition, we hold a diverse class of securities, which limits our exposure to any one security. The international exposure held in our U.S. operation’s fixed maturities portfolio was 15% of total fixed maturities as of September 30, 2025, and 14% as of December 31, 2024. It is comprised of corporate and foreign government fixed maturities. September 30, 2025 December 31, 2024 (in millions) European Union $ 2,419.6 $ 2,227.9 United Kingdom 1,629.3 1,330.5 Australia/New Zealand 1,513.9 1,508.6 Latin America 1,045.8 1,031.4 Middle East and Africa 527.9 490.7 Asia-Pacific 475.0 490.7 Europe, non-European Union 351.7 320.5 Other 310.2 205.4 Total $ 8,273.4 $ 7,605.7 International fixed maturities exposure is determined by the country of risk of the obligor entity. All international fixed maturities held by our U.S. operations are either denominated in U.S. dollars or have been swapped into U.S. dollar equivalents. Our international investments are analyzed internally by country and industry credit investment professionals. We control concentrations using issuer and country level exposure benchmarks, which are based on the credit quality of the issuer and the country. Our investment policy limits total international fixed maturities investments and we are within those internal limits. Exposure to Canada is not included in our international exposure. As of September 30, 2025 and December 31, 2024, our investments in Canada totaled $932.8 million and $966.1 million, respectively. Fixed Maturities Credit Concentrations. One aspect of managing credit risk is through industry, issuer and asset class diversification. Our credit concentrations are managed to established limits. The top 10 exposures comprised 5.5% of single-name credit fixed maturity exposures as of September 30, 2025, and 5.4% as of December 31, 2024. Fixed Maturities Valuation and Credit Quality. Valuation techniques for the fixed maturities portfolio vary by security type and the availability of market data. The use of different pricing techniques and their assumptions could produce different financial results. See Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 17, Fair Value Measurements” for further details regarding our pricing methodology. Once prices are determined, they are reviewed by pricing analysts for reasonableness based on asset class and observable market data. Investment analysts who are familiar with specific securities review prices for reasonableness through direct interaction with external sources, review of recent trade activity or use of internal models. All fixed maturities placed on the “watch list” are periodically analyzed by investment analysts. These analysts periodically meet with the Chief Investment Officer and the Portfolio Managers to determine reasonableness of the analysts’ prices. The valuation of bonds for which a credit loss exists and there is no quoted price is typically based on relative value analysis and the present value of the future cash flows expected to be received. Although we believe these values reasonably reflect the fair value of those securities, the key assumptions about risk premiums, performance of underlying collateral (if any) and other market factors involve qualitative and unobservable inputs. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) monitors the bond investments of insurers for regulatory capital and reporting purposes and, when required, assigns securities to one of six categories referred to as NAIC designations. Although NAIC designations are not produced to aid the investment decision making process, NAIC designations may serve as a reasonable proxy for Nationally Recognized Statistical Rating Organizations’ (“NRSRO”) credit ratings for certain bonds. For most corporate bonds, NAIC designations 1 and 2 include bonds generally considered investment grade by such rating organizations. Bonds are considered investment grade when rated ‘‘Baa3’’ or higher by Moody’s, or ‘‘BBB-’’ or higher by S&P. NAIC designations 3 through 6 include bonds generally referred to as below investment grade. Bonds are considered below investment grade when rated ‘‘Ba1’’ or lower by Moody’s, or ‘‘BB+’’ or lower by S&P. 150 Table of Contents For loan-backed and structured securities, as defined by the NAIC, the NAIC designation is not always a reasonable indication of an NRSRO rating as described below. For CMBS and non-agency RMBS, Blackrock Solutions undertakes the modeling of those NAIC designations. This may result in a final designation being higher or lower than the NRSRO credit rating. The following table presents our total fixed maturities by NAIC designation as of the periods indicated as well as the percentage, based on fair value, that each designation comprises. September 30, 2025 December 31, 2024 Percent of Percent of Amortized Carrying carrying Amortized Carrying carrying NAIC designation cost amount amount cost amount amount ($ in millions) 1 $ 40,138.9 $ 38,125.2 68 % $ 38,458.6 $ 35,638.3 67 % 2 15,535.1 15,123.5 27 15,418.8 14,515.9 27 3 2,635.4 2,583.0 4 2,459.0 2,389.5 5 4 339.9 309.1 1 369.1 338.5 1 5 112.4 94.7 — 84.1 68.5 — 6 1.9 1.0 — 12.6 9.6 — Unallocated portfolio layer method basis adjustment (1) (18.9) — — (55.7) — — Total fixed maturities $ 58,744.7 $ 56,236.5 100 % $ 56,746.5 $ 52,960.3 100 % (1) Amounts represent unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. Fixed maturities included 46 securities with an amortized cost of $550.6 million, gross gains of $13.0 million, gross losses of $0.0 million, valuation allowance of $0.0 million and a carrying amount of $563.6 million as of September 30, 2025, that were still pending a review and assignment of a designation by the SVO or NRSRO ratings to be assigned. Due to the timing of when fixed maturities are purchased, legal documents are filed and the review by the SVO is completed, or NRSRO ratings that have expired or been withdrawn, we will always have securities in our portfolio that are unrated over a reporting period. In these instances, an equivalent designation is assigned based on our fixed income analyst’s assessment. Commercial Mortgage-Backed Securities. As of September 30, 2025, based on amortized cost, 96% of our CMBS portfolio had an NAIC designation of 1. The following table presents our exposure by credit quality based on NAIC designations for our CMBS portfolio as of the periods indicated. September 30, 2025 December 31, 2024 Amortized Carrying Amortized Carrying NAIC designation cost amount cost amount (in millions) 1 $ 4,521.8 $ 4,293.2 $ 4,621.8 $ 4,288.7 2 131.4 114.5 129.0 107.8 3 55.1 47.3 53.6 44.2 4 6.0 3.9 9.5 5.8 5 5.0 4.1 — — 6 0.6 0.2 0.6 0.3 Total (1) $ 4,719.9 $ 4,463.2 $ 4,814.5 $ 4,446.8 (1) Amortized cost amounts of our CMBS portfolio exclude unallocated basis adjustments related to fair value hedges utilizing the portfolio layer method. The CMBS portfolio included agency CMBS with a $524.5 million amortized cost and a $509.4 million carrying amount as of September 30, 2025, and a $616.1 million amortized cost and a $589.9 million carrying amount as of December 31, 2024. 151 Table of Contents Fixed Maturities Watch List. We monitor any decline in the credit quality of fixed maturities through the designation of “problem securities,” “potential problem securities” and “restructured securities”. We define problem securities in our fixed maturity portfolio as securities: (i) with principal and/or interest payments in default or where default is perceived to be imminent in the near term, or (ii) issued by a company that went into bankruptcy subsequent to the acquisition of such securities. We define potential problem securities in our fixed maturity portfolio as securities included on an internal “watch list” for which management has concerns as to the ability of the issuer to comply with the present debt payment terms and which may result in the security becoming a problem or being restructured. The decision whether to classify a performing fixed maturity security as a potential problem involves significant subjective judgments by our management as to the likely future industry conditions and developments with respect to the issuer. We define restructured securities in our fixed maturity portfolio as securities where a concession has been granted to the borrower related to the borrower’s financial difficulties that would not have otherwise been considered. We determine that restructures should occur in those instances where greater economic value will be realized under the new terms than through liquidation or other disposition and may involve a change in contractual cash flows. If the present value of the restructured cash flows is less than the current cost of the asset being restructured, a realized capital loss is recorded in net income and a new cost basis is established. The following table presents the total carrying amount of our fixed maturities portfolio, as well as its problem, potential problem and restructured fixed maturities for the periods indicated. September 30, 2025 December 31, 2024 ($ in millions) Total fixed maturities $ 56,236.5 $ 52,960.3 Problem fixed maturities (1) $ 99.8 $ 76.5 Potential problem fixed maturities 51.3 88.3 Total problem, potential problem and restructured fixed maturities $ 151.1 $ 164.8 Total problem, potential problem and restructured fixed maturities as a percent of total fixed maturities 0.27 % 0.31 % (1) The problem fixed maturities carrying amount is net of the credit loss valuation allowance. Fixed Maturities Credit Losses. Each reporting period, a group of individuals including the Chief Investment Officer, our Portfolio Managers, the assigned analysts and representatives from Investment Accounting review all securities to determine whether a credit loss exists. The analysis focuses on each issuer’s ability to service its debts in a timely fashion. Formal documentation of the analysis and our decision is prepared and approved by management. For additional details regarding our process to identify and evaluate securities with credit losses, see Item 1. “Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, Note 4, Investments” under the caption “Allowance for Credit Loss.” We would not consider a security with unrealized losses to have a decline in value due to credit when it is not our intent to sell the security, it is not more likely than not that we would be required to sell the security before recovery of the amortized cost, which may be maturity, and we expect to recover the amortized cost basis. However, we do sell securities under certain circumstances, such as when we have evidence of a change in the issuer’s creditworthiness, when we anticipate poor relative future performance of securities, when a change in regulatory requirements modifies what constitutes a permissible investment or the maximum level of investments held or when there is an increase in capital requirements or a change in risk weights of debt securities. Sales generate both gains and losses. A number of significant risks and uncertainties are inherent in the process of monitoring credit losses and determining the allowance for credit loss. These risks and uncertainties include: (1) the risk that our assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) the risk that our investment professionals are making decisions based on fraudulent or misstated information in the financial statements provided by issuers and (4) the risk that new information obtained by us or changes in other facts and circumstances lead us to change our intent to not sell the security prior to recovery of its amortized cost. Any of these situations could result in a charge to net income in a future period. The net realized loss relating to the change in the allowance for credit loss and credit related sales of fixed maturities was $24.9 million and $2.8 million for the three months ended September 30, 2025 and 2024, respectively, and $34.9 million and $11.5 million for the nine months ended September 30, 2025 and 2024, respectively. 152 Table of Contents Fixed Maturities Available-For-Sale The following tables present our fixed maturities available-for-sale by industry category, as of the periods indicated. September 30, 2025 Gross Gross Allowance Amortized unrealized unrealized for credit Carrying cost gains losses loss amount (in millions) Finance — Banking $ 1,616.0 $ 18.0 $ 92.5 $ — $ 1,541.5 Finance — Brokerage 950.1 13.6 80.7 — 883.0 Finance — Finance Companies 343.2 4.5 16.6 — 331.1 Finance — Financial Other 1,627.6 53.3 74.2 3.2 1,603.5 Finance — Insurance 1,954.3 44.6 154.2 — 1,844.7 Finance — Real estate investment trusts (“REITs”) 1,709.0 3.8 107.5 — 1,605.3 Industrial — Basic Industry 1,305.1 37.7 71.6 — 1,271.2 Industrial — Capital Goods 1,502.4 32.2 86.4 — 1,448.2 Industrial — Communications 2,332.2 62.7 129.9 — 2,265.0 Industrial — Consumer Cyclical 904.9 12.6 64.5 3.5 849.5 Industrial — Consumer Non-Cyclical 3,146.0 35.5 179.1 2.0 3,000.4 Industrial — Energy 2,072.0 73.9 91.8 — 2,054.1 Industrial — Other 1,055.8 37.2 16.5 0.9 1,075.6 Industrial — Technology 1,471.0 20.9 109.1 5.3 1,377.5