Principal Financial(US:PFG)2025-07-30 17:51Revenue and Income - For the three months ended June 30, 2025, total revenues decreased by $639.5 million to $3,671.3 million compared to $4,310.8 million in the same period of 2024[458]. - Net income for the six months ended June 30, 2025, was $496.4 million, a decrease of $392.4 million from $888.8 million in 2024[458]. - Premiums and other considerations for the three months ended June 30, 2025, decreased by $530.1 million to $1,396.5 million compared to $1,926.6 million in 2024[458]. - Net income attributable to Principal Financial Group, Inc. increased by $76.7 million to $433.5 million for the three months ended June 30, 2025, compared to $356.8 million in 2024[458]. - Total revenues for the Retirement and Income Solutions segment decreased by $552.3 million primarily due to lower sales of single premium group annuities with life contingencies, while fees and other revenues for the Principal Asset Management segment increased by $13.8 million due to higher management fee revenue[460]. Investment Income and Expenses - Net investment income increased by $76.7 million to $1,162.8 million for the three months ended June 30, 2025, compared to $1,086.1 million in 2024[458]. - Operating expenses for the six months ended June 30, 2025, were $2,686.4 million, an increase of $22.3 million from $2,664.1 million in 2024[458]. - Total expenses for the three months ended June 30, 2025, decreased by $698.7 million to $3,168.2 million compared to $3,866.9 million in 2024[458]. - Benefits, claims, and settlement expenses decreased by $238.0 million to $1,839.9 million for the three months ended June 30, 2025, compared to $2,077.9 million in 2024[458]. Tax and Regulatory Matters - The effective income tax rate decreased to 14% for the three months ended June 30, 2025, from 20% for the same period in 2024, primarily due to a decrease in pre-tax income[467]. - The company expects the transaction with BCT to close during the first half of 2026, subject to regulatory approval[451]. Asset Management and Investments - Assets Under Management (AUM) increased to $723.0 billion as of June 30, 2025, up from $670.6 billion a year earlier, reflecting a growth of approximately 7.8%[488]. - Total operating revenues for the Principal Asset Management segment rose to $703.4 million for Q2 2025, a 2.7% increase from $684.8 million in Q2 2024[489]. - Pre-tax operating earnings for the Principal Asset Management segment increased by 24.8% to $236.4 million in Q2 2025 compared to $189.4 million in Q2 2024[489]. - The company experienced a $32.4 million increase in management fee revenue due to higher average AUM in the Investment Management operations for the first half of 2025[491]. Cash Flow and Financial Position - Net cash provided by operating activities was $1,789.2 million for the six months ended June 30, 2025, down from $2,015.9 million in 2024, primarily due to fluctuations in receivables and payables[527]. - Cash and cash equivalents as of June 30, 2025, were $368.4 million, an increase from $357.3 million as of December 31, 2024[533]. - Long-term debt as of June 30, 2025, was $3,920.1 million, slightly down from $3,930.6 million as of December 31, 2024[533]. - Total assets increased to $2,419.7 million as of June 30, 2025, from $2,367.3 million as of December 31, 2024[533]. - Total liabilities as of June 30, 2025, were $5,176.2 million, compared to $5,135.8 million as of December 31, 2024[533]. Market and Risk Management - The company managed credit risk through a dedicated committee that approves credit ratings for fixed maturities, ensuring continuous monitoring and annual reviews of investments[566]. - The company aims to maximize after-tax returns while managing investment risks through diversification and asset/liability matching strategies[565]. - The company had credit default swaps with a notional amount of $105.0 million to hedge certain credit exposures in its investment portfolio[569]. Investment Portfolio Performance - The net realized loss related to credit losses was $5.0 million for the three months ended June 30, 2025, compared to $0.6 million for the same period in 2024[596]. - The total international fixed maturities exposure was $8,075.3 million as of June 30, 2025, an increase from $7,605.7 million as of December 31, 2024[581]. - The total fixed maturities available-for-sale totaled $57,281.7 million as of June 30, 2025, with unrealized losses of $3,712.1 million[605].