| --- | --- | |-----------------------------------------------|-------| | | | | O Principal® | | | Third Quarter 2023 Earnings Call Presentation | | | PRINCIPAL FINANCIAL GROUP October 26, 2023 | | | --- | --- | |---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 1-16725 (Commission file number) PRINCIPAL FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 42-1520346 (State or other jurisdiction of incorporati ...

Principal Financial Group, Inc. (NASDAQ:PFG) Q2 2023 Results Conference Call July 28, 2023 10:00 AM ET Company Participants Humphrey Lee - Vice President of Investor Relations Dan Houston - CEO Deanna Strable - CFO Chris Littlefield - Retirement and Income Solutions Pat Halter - Asset Management Amy Friedrich - Benefits and Protection Conference Call Participants Suneet Kamath - Jefferies Ryan Krueger - KBW Tom Gallagher - Evercore ISI Erik Bass - Autonomous Research John Barnidge - Piper Sandler Wes Carmic ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 1-16725 (Commission file number) PRINCIPAL FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 42-1520346 (State or other jurisdiction of incorporat ...

Financial Data and Key Metrics Changes - The company reported non-GAAP operating earnings of $395 million or $1.60 per diluted share in the first quarter, despite macroeconomic pressures on AUM levels during 2022 [77] - The total company managed AUM increased by 4% from year-end 2022 to $660 billion, reflecting favorable equity and fixed income markets [67] - The company generated $600 million of positive net cash flow, highlighting the benefits of a diversified business model [67] Business Line Data and Key Metrics Changes - The Retirement and Income Solutions (RIS) business saw a strong start to the year with $600 million in pension risk transfer sales, indicating a favorable environment due to higher interest rates [13][4] - Specialty Benefits experienced above-industry growth in premium and fees, driven by strong retention and sales in the small to midsized employer market [76] - The Asset Management segment reported positive net cash flow of $400 million, benefiting from integrated business models and differentiated investment capabilities [76] Market Data and Key Metrics Changes - The company noted strong employment and wage growth in the U.S., particularly in the small to midsize segment, contributing to growth in the Retirement, Benefits, and Protection business [76] - International markets, particularly in Asia and Latin America, showed positive cash flows despite a volatile macroeconomic environment [59] Company Strategy and Development Direction - The company aims to focus on maximizing growth drivers in retirement, global asset management, and Benefits and Protection to drive long-term growth and shareholder value [81] - The company is committed to a disciplined approach to capital deployment, balancing investments for growth with returning excess capital to shareholders [70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating through macroeconomic volatility, highlighting a strong financial position with $1.8 billion of excess and available capital [54] - The company anticipates free cash flow generation to increase throughout the year, despite seasonality affecting the first quarter [108] Other Important Information - The company has reduced its office exposure in the commercial mortgage portfolio from 37% in 2016 to 25% today, reflecting a proactive approach to managing risks in the sector [86] - The commercial loan portfolio has a current average loan-to-value of 46% and a debt service coverage of 2.5x, indicating strong financial health [86] Q&A Session Summary Question: What is the outlook for pension risk transfer sales in 2023? - Management expects to grow the PRT business by 10% to 15% over last year, targeting around $2.3 billion in sales [13] Question: Can you elaborate on the drivers of net investment income increase? - The increase is attributed to higher short-term interest rates, timing differences in rate credits, and overall growth in the business block [22] Question: How does the company assess its commercial real estate exposure? - The company conducts quarterly reevaluations of loans and cash flows, ensuring a robust analysis of debt service coverage ratios [14][15] Question: What is the expected pace of share buybacks moving forward? - Management indicated that while there may be volatility quarter-to-quarter, the annualized pace of buybacks is expected to be consistent with the first quarter's $150 million [21] Question: How is the company managing expenses in the RIS business? - Management highlighted disciplined expense management and noted some one-time benefits from prior period accruals, with expectations for flat expenses year-over-year [44]

49% of rated fund AUM has a 4 or 5 star rating from Morningstar 4 Government Cash, 3.9% Agencies, State & Political, Other1, 10.1% 8.6% Residential Loans, 4.6% Commerical $73.7 B Mortgage Loans Corporate (ex-Office), U.S. invested assets Bonds, 34.6% 13.6% & cash Total Commercial Mortgage 7 Commerical Loans 18.2% Mortgage Loans (Office), 4.6% ABS, 7.0% MBS, 7.6% CMBS, 5.4% • Commercial mortgage loan portfolio has average loan-to-value (LTV) of 46% and average debt service coverage (DSC) ratio of 2.5x; refle ...

| --- | --- | |-----------------------------------------|-------| | | | | O Principal® | | | 2023 and long-term outlook | | | PRINCIPAL FINANCIAL GROUP March 1, 2023 | | Financial supplement enhancements Reflects recast results under long-duration targeted improvements accounting guidance (LDTI) Enhanced and refined supplement highlights the earnings drivers of our businesses Retirement and Income Solutions Principal Asset Management – Principal Global Investors and Principal International reported under a ...

Assets Under Management and Administration - As of December 31, 2022, Principal Financial Group had $1,455.8 billion in assets under administration (AUA) and $635.3 billion in assets under management (AUM) [12]. - The company provided WSRS products to over 42,000 defined contribution plans, totaling $401.4 billion in assets and covering over 10.8 million eligible plan participants as of December 31, 2022 [23]. - Approximately 31% of WSRS account values were managed by Principal Global Investors, while 57% were managed by third-party asset managers not under contract to sub-advise a PFG product as of December 31, 2022 [23]. - As of December 31, 2022, 92% of the $9.0 billion in variable annuity account balances was allocated to mutual funds managed by Principal Global Investors and the guaranteed option [28]. - As of December 31, 2022, Principal Global Investors managed $464.7 billion in assets [43]. - Principal Global Equities and related teams managed $200.7 billion in global equity assets as of December 31, 2022 [47]. - Principal Global Fixed Income and related teams managed $189.2 billion in global fixed income assets as of December 31, 2022 [48]. - The alternative asset classes managed by Principal amounted to $74.8 billion as of December 31, 2022 [49]. - Brasilprev, a joint venture in Brazil, had $66.3 billion of AUM as of December 31, 2022 [59]. - Cuprum, a subsidiary in Chile, had $41.2 billion of AUM as of December 31, 2022 [61]. - Principal's operations in Mexico managed $17.5 billion of AUM as of December 31, 2022 [65]. - CCB Principal Asset Management Co., Ltd. in China had $181.2 billion of AUM as of December 31, 2022 [69]. - The joint ventures in Southeast Asia managed $20.5 billion of AUM as of December 31, 2022 [72]. Insurance and Employee Benefits - As of December 31, 2022, over 108,000 group dental and vision insurance policies were in force, covering over 2.7 million employees [78]. - As of December 31, 2022, the company had over 89,000 group life policies providing nearly $167.0 billion of group life insurance in force, covering approximately 2.9 million employee lives [79]. - Long-term disability represented 59% of total group disability premium, while short-term disability represented 41% as of December 31, 2022 [80]. - The company served approximately 219,000 individual disability policyholders as of December 31, 2022, ranking 4th in the U.S. in terms of premium in force in the non-cancellable segment [81]. - As of December 31, 2022, the company administered approximately 729,000 individual life insurance policies with over $524.0 billion of individual life insurance in force [83]. - Interest sensitive products represented 19% of individual life insurance in force and generated 83% of individual life insurance annualized first year premium sales for the year ended December 31, 2022 [85]. - Term life insurance products represented 17% of individual life insurance annualized first year premium sales and 79% of individual life insurance in force as of December 31, 2022 [87]. - As of December 31, 2022, small and medium-sized business sales represented 100% of individual life sales and 68% of individual disability sales [92]. - The company plans to expand its Paid Family and Medical Leave (PFML) offerings to additional states in the future, having already sold PFML in two states as of December 31, 2022 [80]. - The group insurance market is shifting towards voluntary/worksite products, which presents growth opportunities for the company [90]. Financial Strength and Ratings - The company has been assigned strong financial strength ratings, including A+ ("Superior") from A.M. Best and AA− ("Very Strong") from Fitch Ratings [97]. - The company achieved a statutory surplus exceeding minimum risk-based capital requirements as of December 31, 2022 [104]. - As of December 31, 2022, the company employed approximately 19,300 people globally [121]. - The average tenure for global employees was 9.3 years, with an annual turnover rate of 20.9% [127]. Market Opportunities and Growth - The company believes there are significant growth opportunities in the retirement and employee benefit markets, particularly among small and medium-sized businesses [14]. - The company’s retirement services sales representatives maintained relationships with over 11,000 independent advisors, consultants, and agents as of December 31, 2022 [24]. Investment Portfolio and Risks - As of December 31, 2022, the company held $44.7 billion in fixed maturities, representing 65% of total U.S. invested assets, with approximately 7% rated below investment grade [160]. - The commercial mortgage loan portfolio amounted to $14.0 billion, accounting for 18% of total invested assets as of December 31, 2022 [161]. - Approximately $11.4 billion, or 84%, of the U.S. investment operations' commercial mortgage loans had balloon payment maturities, which historically have a higher default rate [162]. - The company’s international investment operations held $3.1 billion in fixed maturities, representing 42% of total international invested assets [160]. - An increase in defaults on the fixed maturities portfolio could harm the company's financial strength and reduce profitability [160]. - The company is exposed to credit risk from derivative instruments, with collateral agreements in place to limit exposure [166]. - Environmental liability exposure may arise from the commercial mortgage loan portfolio and real estate investments, potentially harming financial strength [168]. - The company’s revenues are significantly influenced by the value of assets under management (AUM) and assets under administration (AUA), which are affected by market volatility [152]. - Changes in interest rates may adversely affect the company's results of operations, financial condition, and liquidity, impacting net income [153]. - The transition from LIBOR to SOFR may affect the value of certain derivatives and floating rate securities held by the company [157]. - Commercial mortgage lending in California accounted for 26%, or $3.5 billion, of the U.S. investment operations commercial mortgage loan portfolio as of December 31, 2022, exposing the company to potential losses from economic downturns in the state [169]. - The U.S. investment operations had gross unrealized losses on fixed maturities of $5,296.7 million pre-tax as of December 31, 2022, with $1,572.3 million of these losses being for securities in a continuous unrealized loss position for over twelve months [170]. - The company is exposed to foreign currency risk in its international operations, which could adversely affect profitability if foreign currencies weaken against the U.S. dollar [171]. - The valuation of investments and the determination of allowances and impairments may significantly impact the company's results of operations or financial condition due to the use of estimates and assumptions [172]. Regulatory and Compliance Risks - Changes in laws or regulations could significantly increase compliance costs and reduce profitability, impacting how the company conducts its business [182]. - The SECURE 2.0 Act of 2022 may affect the company's retirement system operations, with potential benefits contingent on proper implementation [183]. - The NAIC's adoption of a principle-based reserving approach could lead to more volatile and less predictable reserve and capital levels for life insurance and annuities [188]. - The company may face losses on insurance and annuity products if actual experience differs significantly from pricing and reserving assumptions, impacting profitability [178]. - The company is required to evaluate the recoverability of deferred tax assets each quarter, which could lead to a valuation allowance that adversely affects results of operations [176]. - The determination of allowances and impairments varies by investment type and requires significant judgment, with potential future adjustments impacting financial strength [174]. - Changes in employee benefit regulations may reduce profitability due to potential increases in liability for damages in future litigation [194]. - The DOL is expected to release proposed rules regarding fiduciary investment advice, which could impact business operations [195]. - Financial services regulatory reform, including the Dodd-Frank Act, may reduce profitability and affect capital expenditures [196]. - Changes in cybersecurity and privacy regulations may increase compliance costs and lead to increased scrutiny [197]. - Environmental, social, and governance (ESG) requirements may impact financial and operational results due to emerging risks and regulatory changes [200]. - Changes in tax laws could reduce the attractiveness of insurance, annuity, and investment products, adversely affecting sales and profitability [202]. - A downgrade in financial strength or credit ratings could lead to increased policy surrenders and withdrawals, impacting profitability [215]. - Client terminations or withdrawals may reduce revenues for asset management and accumulation businesses, affecting assets under management (AUM) [217]. - Changes in accounting standards may adversely affect reported results of operations and financial condition, particularly regarding long-duration insurance contracts [206]. - Legal liability or adverse publicity from regulatory actions may affect financial strength and profitability [208]. - The company faces risks related to guarantees in certain products, which may decrease net income or increase volatility if hedging strategies are ineffective [220]. - International operations are exposed to political, legal, and operational risks that could negatively impact profitability, particularly in emerging markets [221]. - Compliance with stringent data security laws in some countries may lead to increased expenses and inefficiencies in business processes [222]. - The company is at risk of fraudulent activities, which can result in higher claims and operational expenses [223]. - Participation in joint ventures limits the company's control and may hinder efforts to protect or enhance investment value [224].

Principal Financial Group, Inc. (NASDAQ:PFG) Q4 2022 Earnings Conference Call January 31, 2023 10:00 AM ET Company Participants Humphrey Lee – Vice President-Investor Relations Dan Houston – Chief Executive Officer Deanna Strable – Chief Financial Officer Pat Halter – Global Asset Management Chris Littlefield – Retirement and Income Solutions Amy Friedrich – U.S. Insurance Solutions Conference Call Participants John Barnidge – Piper Sandler Jimmy Bhullar – J.P. Morgan Suneet Kamath – Jefferies Tracy Benguig ...

| --- | --- | |------------------------------------------------|-------| | | | | O Principal® | | | Fourth Quarter 2022 Earnings Call Presentation | | | PRINCIPAL FINANCIAL GROUP January 30, 2023 | | | --- | --- | --- | --- | |---------------------------------------------------------------|-----------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------| | | Full year 2022 financial highlights ...