Raises first quarter 2024 common stock
dividend and announces new $1.5 billion share repurchase
authorization
Company Highlights
- Full year 2023 net income attributable to Principal
Financial Group®, Inc. (PFG)1 of $623 million, or $2.55 per diluted
share, includes $892 million of loss from exited business. Fourth
quarter 2023 net loss attributable to PFG of $872 million, or $3.66
per diluted share, includes $1,171 million of loss from exited
business.
- Full year 2023 non-GAAP operating earnings2 of $1,603
million, or $6.55 per diluted share. Fourth quarter 2023 non-GAAP
operating earnings of $441 million, or $1.83 per diluted
share.
- Returned $1.3 billion of capital to shareholders for full
year 2023, including $0.4 billion in the fourth quarter of
2023.
- Company raises first quarter 2024 common stock dividend to
$0.69 per share.
- New share repurchase authorization of $1.5 billion approved
by Board of Directors.
- Assets under management (AUM) of $695 billion, which is
included in assets under administration (AUA) of $1.6
trillion.
- 2024 outlook: 9-12% annual non-GAAP operating earnings per
diluted share (EPS) growth3, 75-85% free capital flow conversion,
and $1.5-$1.8 billion capital deployment.
Principal Financial Group® (Nasdaq: PFG) announced results for
full year and fourth quarter 2023.
- Non-GAAP net income attributable to PFG excluding exited
business1 for the 12 months ending Dec. 31, 2023, of $1,514.9
million, compared to $1,453.2 million for the 12 months ending
Dec. 31, 2022. Non-GAAP net income excluding exited business per
diluted share of $6.19 for the 12 months ending Dec. 31, 2023,
compared to $5.69 for the 12 months ending Dec. 31, 2022. Non-GAAP
net income attributable to PFG excluding exited business for fourth
quarter 2023 of $299.1 million, or $1.19 per diluted share,
compared to $510.9 million, or $2.05 per diluted share, in the
prior year quarter.
- Non-GAAP operating earnings for the 12 months ending Dec.
31, 2023, of $1,602.8 million, compared to $1,618.8 million for
the 12 months ending Dec. 31, 2022. Non-GAAP operating earnings per
diluted share of $6.55 for the 12 months ending Dec. 31, 2023
compared to $6.34 per diluted share for the 12 months ending Dec.
31, 2022. Non-GAAP operating earnings for fourth quarter 2023 of
$440.5 million, or $1.83 per diluted share, compared to $394.3
million, or $1.58 per diluted share, in the prior year
quarter.
- Raised common stock dividend to $0.69 per share for
first quarter 2024, which was authorized by the company’s Board of
Directors, bringing the trailing twelve-month dividend to $2.65 per
share, a 4% increase compared to the prior year trailing
twelve-month period. The dividend will be payable on March 28,
2024, to shareholders of record as of March 12, 2024.
“Our diversified and integrated business model generated strong
fourth quarter and 2023 results – delivering on our outlook despite
a challenging environment,” said Dan Houston, chairman, president,
and CEO of Principal®. “With continued focus on higher growth
markets, integrated offerings, and valuable distribution
partnerships, we generated over $1.6 billion of non-GAAP operating
earnings for the full year 2023, including $441 million in the
fourth quarter. We returned more than $1.3 billion to shareholders
in 2023, delivering on our commitment to return excess capital
while continuing to invest for growth. We are building momentum and
are in a strong financial position to drive growth across our
businesses and positioned for strong results in 2024.”
Full year and fourth quarter highlights
- Retirement and Income Solutions (RIS) full year sales increased
9% over 2022, including $2.9 billion of pension risk transfer
sales; full year operating margin4 of 39%; fourth quarter recurring
deposits increased 12% from fourth quarter 2022
- Principal Global Investors (PGI) managed AUM of $499.5 billion,
increased 7% over 2022; positive full year real estate net cash
flow of $1.9 billion; full year operating margin5 of 35%
- Principal International (PI) reported record AUM of $180.4
billion, increased 15% over 2022, with positive full year net cash
flow of $2.1 billion
- Specialty Benefits full year premium and fees increased 9%
driven by record full year sales, strong retention, as well as
employment and wage growth
- Life Insurance business market full year premium and fees
increased 15% from 2022
- Strong investment performance6: 70% of Principal investment
options above median on a one-year basis, 58% on a three-year
basis, 80% on a five-year basis, and 83% on a ten-year basis;
additionally, 58% of fund-level AUM had a 4- or 5-star rating from
Morningstar.
- Capital returned to shareholders:
- Full year 2023: $1.3 billion, including:
- $0.7 billion to repurchase 9.1 million shares of common stock;
and
- $0.6 billion of common stock dividends with $2.60 per share
common dividend paid
- Fourth quarter 2023: $409.6 million, including:
- $250.6 million to repurchase 3.5 million shares of common
stock; and
- $159.0 million of common stock dividends with $0.67 per share
common dividend paid
Strong financial position
- $1.7 billion of excess and available capital in our holding
companies and other subsidiaries, aided by management actions to
increase capital efficiency
- Statutory risk-based capital (RBC) ratio for Principal Life
Insurance Company of 427%
New $1.5 billion share repurchase authorization
- The Board of Directors approved a new authorization for the
repurchase of $1.5 billion of the company’s outstanding common
stock.
- As of December 31, 2023, approximately $0.3 billion remained
under the company’s prior authorization.
2024 outlook
- Expect to deliver 2024 non-GAAP EPS growth of 9-12% compared to
2023 and reflecting macroeconomic assumptions as of Dec. 31,
2023.
- Long-term enterprise financial targets are unchanged:
- 9-12% annual non-GAAP EPS growth
- 75-85% free capital flow conversion, including 40% dividend
payout ratio7
- 14-16% non-GAAP ROE8
Segment results
Retirement and Income Solutions
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating earnings9
$264.6
$204.0
30%
$1,051.4
$959.1
10%
Net revenue10
$690.5
$615.5
12%
$2,690.3
$2,616.5
3%
Operating margin
38.3%
33.1%
39.1%
36.7%
- Pre-tax operating earnings increased $60.6 million
primarily due to higher net revenue.
- Net revenue increased $75.0 million primarily due to
growth in the business and strong revenue retention, higher net
investment income, as well as favorable markets.
Principal Global Investors
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating earnings
$127.3
$138.6
(8)%
$513.0
$604.0
(15)%
Operating revenues less pass-through
expenses1
$373.9
$379.5
(1)%
$1,488.9
$1,578.0
(6)%
Operating margin
34.2%
36.8%
34.7%
38.6%
Total PGI assets under management
(billions)
$499.5
$464.7
7%
PGI sourced assets under management
(billions)
$255.0
$241.6
6%
- Pre-tax operating earnings decreased $11.3 million
primarily due to lower operating revenues less pass-through
expenses and higher one-time expenses.
- Operating revenues less pass-through expenses decreased
$5.6 million primarily due to lower performance fees.
Principal International
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating earnings
$92.0
$77.7
18%
$304.7
$298.7
2%
Combined net revenue
(at PFG share)12
$266.3
$232.6
14%
$976.3
$920.7
6%
Operating margin13
34.5%
33.4%
31.2%
32.4%
Assets under management (billions)
$180.4
$156.5
15%
- Pre-tax operating earnings increased $14.3 million
primarily due to higher combined net revenue and improved
margin.
- Combined net revenue (at PFG share) increased $33.7
million primarily due to higher assets under management.
Specialty Benefits
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating earnings
$119.3
$112.7
6%
$447.0
$416.3
7%
Premium and fees
$791.4
$723.0
9%
$3,055.0
$2,804.8
9%
Operating margin14
15.1%
15.6%
14.6%
14.8%
Incurred loss ratio
61.0%
59.5%
60.4%
61.1%
- Pre-tax operating earnings increased $6.6 million due to
growth in the business and expense management discipline, partially
offset by a higher incurred loss ratio.
- Premium and fees increased $68.4 million driven by
record full year sales, strong retention, and employment and wage
growth.
- Incurred loss ratio increased to 61.0% compared to a
very favorable 4Q22 driven by less favorable disability
underwriting and group life mortality experience, partially offset
by improved dental results.
Life Insurance
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating earnings
(losses)
$25.1
$25.4
(1)%
$90.6
$154.0
(41)%
Premium and fees
$226.6
$215.5
5%
$922.2
$922.5
0%
Operating margin
11.1%
11.8%
9.8%
16.7%
- Pre-tax operating earnings decreased $0.3 million.
- Premium and fees increased $11.1 million as strong
business market growth outpaced the runoff of the legacy
business.
Corporate
(in millions except percentages or otherwise noted)
Quarter
Trailing Twelve Months
4Q23
4Q22
% Change
4Q23
4Q22
% Change
Pre-tax operating losses
$(88.5)
$(86.7)
(2)%
$(396.8)
$(469.4)
15%
- Pre-tax operating losses increased $1.8 million.
Forward looking and cautionary statements
Certain statements made by the company which are not historical
facts may be considered forward-looking statements, including,
without limitation, statements as to non-GAAP operating earnings,
net income attributable to PFG, net cash flow, realized and
unrealized gains and losses, capital and liquidity positions, sales
and earnings trends, and management’s beliefs, expectations, goals
and opinions. The company does not undertake to update these
statements, which are based on a number of assumptions concerning
future conditions that may ultimately prove to be inaccurate.
Future events and their effects on the company may not be those
anticipated, and actual results may differ materially from the
results anticipated in these forward-looking statements. The risks,
uncertainties and factors that could cause or contribute to such
material differences are discussed in the company’s annual report
on Form 10-K for the year ended Dec. 31, 2022, and in the company’s
quarterly report on Form 10-Q for the quarter ended Sep. 30, 2023,
filed by the company with the U.S. Securities and Exchange
Commission, as updated or supplemented from time to time in
subsequent filings. These risks and uncertainties include, without
limitation: adverse capital and credit market conditions may
significantly affect the company’s ability to meet liquidity needs,
access to capital and cost of capital; conditions in the global
capital markets and the economy generally; volatility or declines
in the equity, bond or real estate markets; changes in interest
rates or credit spreads or a prolonged low interest rate
environment; the elimination of the London Inter-Bank Offered Rate
(“LIBOR”); the company’s investment portfolio is subject to several
risks that may diminish the value of its invested assets and the
investment returns credited to customers; the company’s valuation
of investments and the determination of the amount of allowances
and impairments taken on such investments may include
methodologies, estimations and assumptions that are subject to
differing interpretations; any impairments of or valuation
allowances against the company’s deferred tax assets; the company’s
actual experience for insurance and annuity products could differ
significantly from its pricing and reserving assumptions; the
pattern of amortizing the company’s DAC asset and other actuarial
balances may change; changes in laws, regulations or accounting
standards; the company’s ability to pay stockholder dividends, make
share repurchases and meet its obligations may be constrained by
the limitations on dividends or other distributions Iowa insurance
laws impose on Principal Life; litigation and regulatory
investigations; from time to time the company may become subject to
tax audits, tax litigation or similar proceedings, and as a result
it may owe additional taxes, interest and penalties in amounts that
may be material; applicable laws and the company’s certificate of
incorporation and by-laws may discourage takeovers and business
combinations that some stockholders might consider in their best
interests; competition, including from companies that may have
greater financial resources, broader arrays of products, higher
ratings and stronger financial performance; a downgrade in the
company’s financial strength or credit ratings; client
terminations, withdrawals or changes in investor preferences; the
company’s hedging or risk management strategies prove ineffective
or insufficient; international business risks; risks arising from
participation in joint ventures; the company may need to fund
deficiencies in its “Closed Block” assets; the company’s reinsurers
could default on their obligations or increase their rates; risks
arising from acquisitions of businesses; risks related to
administering reinsurance transactions; a pandemic, terrorist
attack, military action or other catastrophic event; global climate
change; technological and societal changes may disrupt the
company’s business model and impair its ability to retain existing
customers, attract new customers and maintain its profitability;
damage to the company’s reputation; the company may not be able to
protect its intellectual property and may be subject to
infringement claims; inability to attract, develop and retain
qualified employees and sales representatives and develop new
distribution sources; an interruption in information technology,
infrastructure or other internal or external systems used for
business operations, or a failure to maintain the confidentiality,
integrity or availability of data residing on such systems; loss of
key vendor relationships or failure of a vendor to protect
information of our customers or employees; and the company’s
enterprise risk management framework may not be fully effective in
identifying or mitigating all of the risks to which the company is
exposed.
Use of non-GAAP financial measures
The company uses a number of non-GAAP financial measures that
management believes are useful to investors because they illustrate
the performance of normal, ongoing operations, which is important
in understanding and evaluating the company’s financial condition
and results of operations. They are not, however, a substitute for
U.S. GAAP financial measures. Therefore, the company has provided
reconciliations of the non-GAAP measures to the most directly
comparable U.S. GAAP measure at the end of the release. The company
adjusts U.S. GAAP measures for items not directly related to
ongoing operations. However, it is possible these adjusting items
have occurred in the past and could recur in future reporting
periods. Management also uses non-GAAP measures for goal setting,
as a basis for determining employee and senior management awards
and compensation and evaluating performance on a basis comparable
to that used by investors and securities analysts.
Earnings conference call
On Tuesday, Feb. 13, 2024, at 10:00 a.m. (ET), Chairman,
President and Chief Executive Officer Dan Houston and Executive
Vice President and Chief Financial Officer Deanna Strable will lead
a discussion of results and the impacts on future prospects, asset
quality and capital adequacy during a live conference call, which
can be accessed as follows:
- Via live Internet webcast. Please go to investors.principal.com
at least 10-15 minutes prior to the start of the call to register,
and to download and install any necessary audio software.
- Via telephone through Call Me, a zero hold-time telephone
dial-back service, or by dialing in one of the following numbers 10
minutes prior to the start of the call.
- 877-407-0832 (U.S. and Canadian callers)
- +1 201-689-8433 (International callers)
- Replay of the earnings call via webcast as well as a transcript
of the call will be available after the call at
investors.principal.com.
The company’s financial supplement and slide presentation is
currently available at investors.principal.com, and may be referred
to during the call.
About Principal®15
Principal Financial Group® (Nasdaq: PFG) is a global financial
company with nearly 20,000 employees16 passionate about improving
the wealth and well-being of people and businesses. In business for
more than 140 years, we’re helping approximately 62 million
customers16 plan, insure, invest, and retire, while working to
improve our planet, support the communities where we do business,
and build a diverse, inclusive workforce. Principal® is proud to be
recognized as one of the 2023 World’s Most Ethical Companies17, a
member of the Bloomberg Gender Equality Index, and named as a “Best
Places to Work in Money Management18.” Learn more about Principal
and our commitment to sustainability, inclusion, and purpose at
principal.com.
Summary of Principal Financial Group, Inc. and Segment
Results
Principal Financial Group, Inc.
Results:
(in millions)
Three Months Ended,
Trailing Twelve Months,
12/31/23
12/31/22
12/31/23
12/31/22
Net income (loss) attributable to
PFG
$
(871.7)
$
(16.2)
$
623.2
$
4,756.9
(Income) loss from exited business
1,170.8
527.1
891.7
(3,303.7)
Non-GAAP net income (loss) attributable
to PFG excluding exited business
$
299.1
$
510.9
$
1,514.9
$
1,453.2
Net realized capital (gains) losses, as
adjusted
141.4
(116.6)
87.9
165.6
Non-GAAP Operating Earnings*
$
440.5
$
394.3
$
1,602.8
$
1,618.8
Income taxes
99.3
77.4
407.1
343.9
Non-GAAP Pre-Tax Operating
Earnings
$
539.8
$
471.7
$
2,009.9
$
1,962.7
Segment Pre-Tax Operating Earnings
(Losses):
Retirement and Income Solutions
$
264.6
$
204.0
$
1,051.4
$
959.1
Principal Asset Management
219.3
216.3
817.7
902.7
Benefits and Protection
144.4
138.1
537.6
570.3
Corporate
(88.5)
(86.7)
(396.8)
(469.4)
Total Segment Pre-Tax Operating
Earnings
$
539.8
$
471.7
$
2,009.9
$
1,962.7
Per Diluted Share
Three Months Ended,
Twelve Months Ended,
12/31/23
12/31/22
12/31/23
12/31/22
Net income (loss)
$
(3.66)
$
(0.07)
$
2.55
$
18.63
(Income) loss from exited business
4.85
2.12
3.64
(12.94)
Non-GAAP net income (loss) excluding
exited business
$
1.19
$
2.05
$
6.19
$
5.69
Net realized capital (gains) losses, as
adjusted
0.59
(0.47)
0.36
0.65
Impact of dilutive shares19
0.05
0.00
0.00
0.00
Non-GAAP Operating Earnings
$
1.83
$
1.58
$
6.55
$
6.34
Weighted-average diluted common shares
outstanding (in millions)
241.3
249.2
244.6
255.3
*U.S. GAAP (GAAP) net income attributable to PFG versus
non-GAAP operating earnings
Management uses non-GAAP operating earnings, which is a
financial measure that excludes the effect of net realized capital
gains and losses, as adjusted, income (loss) from exited business
and other after-tax adjustments the company believes are not
indicative of overall operating trends, for goal setting, as a
basis for determining employee and senior management awards and
compensation and evaluating performance on a basis comparable to
that used by investors and securities analysts. Note: it is
possible these adjusting items have occurred in the past and could
recur in future reporting periods. While these items may be
significant components in understanding and assessing our
consolidated financial performance, management believes the
presentation of non-GAAP operating earnings enhances the
understanding of results of operations by highlighting earnings
attributable to the normal, ongoing operations of the company’s
businesses.
Selected Balance Sheet
Statistics
Period Ended,
12/31/23
12/31/22
Total assets (in billions)
$
305.0
$
290.9
Stockholders’ equity (in millions)
$
10,961.7
$
10,017.8
Total common equity (in millions)
$
10,916.0
$
9,976.7
Total common equity excluding cumulative
change in fair value of funds withheld embedded derivative and
accumulated other comprehensive income (AOCI) other than foreign
currency translation adjustment (in millions)
$
12,735.4
$
12,398.5
End of period common shares outstanding
(in millions)
236.4
243.5
Book value per common share
$
46.18
$
40.97
Book value per common share excluding
cumulative change in fair value of funds withheld embedded
derivative and AOCI other than foreign currency translation
adjustment
$
53.87
$
50.92
Principal Financial Group,
Inc.
Reconciliation of U.S. GAAP to
Non-GAAP Financial Measures
(in millions, except as
indicated)
Period Ended,
12/31/23
12/31/22
Stockholders’ Equity, Excluding
Cumulative Change in Fair Value of Funds Withheld Embedded
Derivative and AOCI Other Than Foreign Currency Translation
Adjustment, Available to Common Stockholders:
Stockholders’ equity
$
10,961.7
$
10,017.8
Noncontrolling interest
(45.7)
(41.1)
Stockholders’ equity available to common
stockholders
10,916.0
9,976.7
Cumulative change in fair value of funds
withheld embedded derivative
(2,027.9)
(2,885.6)
AOCI, other than foreign currency
translation adjustment
3,847.3
5,307.4
Stockholders’ equity, excluding cumulative
change in fair value of funds withheld embedded derivative and AOCI
other than foreign currency translation adjustment, available to
common stockholders
$
12,735.4
$
12,398.5
Book Value Per Common Share, Excluding
Cumulative Change in Fair Value of Funds Withheld Embedded
Derivative and AOCI Other Than Foreign Currency Translation
Adjustment:
Book value per common share
$
46.18
$
40.97
Cumulative change in fair value of funds
withheld embedded derivative and AOCI, other than foreign currency
translation adjustment
7.69
9.95
Book value per common share, excluding
change in fair value of funds withheld embedded derivative and AOCI
other than foreign currency translation adjustment
$
53.87
$
50.92
Principal Financial Group,
Inc.
Reconciliation of U.S. GAAP to
Non-GAAP Financial Measures
(in millions)
Three Months Ended,
Trailing Twelve
Months,
12/31/23
12/31/22
12/31/23
12/31/22
Income Taxes:
Total GAAP income taxes (benefit)
$
(268.0)
$
(11.2)
$
68.7
$
1,189.5
Net realized capital gains (losses) tax
adjustments
35.3
(34.2)
22.0
56.6
Exited business tax adjustments
311.3
116.2
238.1
(956.4)
Income taxes related to equity method
investments and noncontrolling interest
20.7
6.6
78.3
54.2
Income taxes
$
99.3
$
77.4
$
407.1
$
343.9
Net Realized Capital Gains
(Losses):
GAAP net realized capital gains
(losses)
$
(112.7)
$
171.3
$
(72.2)
$
(182.1)
Market value adjustments to fee
revenues
1.0
0.6
1.3
0.7
Net realized capital gains (losses)
related to equity method investments
4.6
(9.0)
8.8
(15.0)
Derivative and hedging-related revenue
adjustments
(0.4)
(10.0)
23.3
(91.3)
Certain variable annuity fees
18.0
18.1
73.3
75.9
Sponsored investment fund adjustments
5.8
5.3
23.4
22.2
Capital gains distributed – operating
expenses
(12.3)
(10.9)
(26.3)
102.9
Amortization of actuarial balances
-
(0.1)
(0.2)
(0.1)
Derivative and hedging-related expense
adjustments
0.9
-
1.8
-
Market value adjustments of embedded
derivatives
2.7
0.2
1.7
(40.9)
Market value adjustments of market risk
benefits
(30.3)
(4.5)
(71.3)
(157.2)
Capital gains distributed – cost of
interest credited
(36.0)
1.2
(52.2)
33.5
Net realized capital gains (losses) tax
adjustments
35.3
(34.2)
22.0
56.6
Net realized capital gains (losses)
attributable to noncontrolling interest, after-tax
(18.0)
(11.4)
(21.3)
29.2
Total net realized capital gains (losses)
after-tax adjustments
(28.7)
(54.7)
(15.7)
16.5
Net realized capital gains (losses), as
adjusted
$
(141.4)
$
116.6
$
(87.9)
$
(165.6)
Income (Loss) from Exited
Business:
Pre-tax impacts of exited business:
Strategic review costs and impacts
$
-
$
4.0
$
-
$
40.4
Amortization of reinsurance gains
(losses)
(18.2)
(18.5)
(68.7)
(56.7)
Other impacts of reinsured business
(30.5)
(28.5)
(140.4)
(125.8)
Net realized capital gains (losses) on
funds withheld assets
45.2
51.9
165.0
749.4
Change in fair value of funds withheld
embedded derivative
(1,478.6)
(652.2)
(1,085.7)
3,652.8
Tax impacts of exited business
311.3
116.2
238.1
(956.4)
Total income (loss) from exited
business
$
(1,170.8)
$
(527.1)
$
(891.7)
$
3,303.7
Principal Financial Group,
Inc.
Reconciliation of U.S. GAAP to
Non-GAAP Financial Measures
(in millions)
Three Months Ended,
Trailing Twelve
Months,
12/31/23
12/31/22
12/31/23
12/31/22
Principal Global Investors Operating
Revenues Less Pass-Through Expenses:
Operating revenues
$
403.8
$
410.6
$
1,611.2
$
1,715.5
Commissions and other expenses
(29.9)
(31.1)
(122.3)
(137.5)
Operating revenues less pass-through
expenses
$
373.9
$
379.5
$
1,488.9
$
1,578.0
Principal International Combined Net
Revenue (at PFG Share)
Pre-tax operating earnings
$
92.0
$
77.7
$
304.7
$
298.7
Combined operating expenses other than
pass-through commissions (at PFG share)
174.3
154.9
671.6
622.0
Combined net revenue (at PFG share)
$
266.3
$
232.6
$
976.3
$
920.7
________________________________
1 All financial results and periods
reflect the adoption of long-duration targeted improvements (LDTI)
accounting guidance.
2 Use of non-GAAP financial measures is
discussed in this release after segment results. Non-GAAP operating
earnings for total company is after tax.
3 Based on 2023 results excluding
significant variances. See Fourth Quarter 2023 Earnings and 2024
Outlook slide presentation for more details.
4 Operating margin for RIS = pre-tax
operating earnings divided by net revenue.
5 Operating margin for PGI = pre-tax
operating earnings, adjusted for noncontrolling interest divided by
operating revenues less pass-through expenses.
6 Includes only funds with ratings
assigned by Morningstar; non-rated funds excluded (85 total, 80 are
ranked).
7 Based on net income attributable to PFG
excluding income or loss from exited business.
8 Non-GAAP return on equity, excluding
cumulative change in fair value of funds withheld embedded
derivative and AOCI other than foreign currency translation
adjustment.
9 Pre-tax operating earnings = operating
earnings before income taxes and after noncontrolling interest.
10 Net revenue = 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.
11 The company has provided
reconciliations of the non-GAAP measures to the most directly
comparable U.S. GAAP measures at the end of the release. The
company has determined this measure is more representative of
underlying operating revenues growth for PGI as it removes
commissions and other expenses that are collected through fee
revenue and passed through expenses with no impact to pre-tax
operating earnings.
12 Combined net revenue (a non-GAAP
financial measure): net revenue for all PI companies at 100% less
pass-through commissions. The company has determined combined net
revenue (at PFG share) is more representative of underlying net
revenue growth for PI as it reflects our proportionate share of
consolidated and equity method subsidiaries. In addition, using
this net revenue metric provides a more meaningful representation
of our operating margin.
13 Operating margin for PI = pre-tax
operating earnings divided by combined net revenue (at PFG
share).
14 Operating margin for Benefits and
Protection = pre-tax operating earnings divided by premium and
fees.
15 Principal, Principal and symbol design
and Principal Financial Group are trademarks and service marks of
Principal Financial Services, Inc., a member of the Principal
Financial Group.
16 As of December 31, 2023
17 Ethisphere, 2023
18 Pensions & Investments, 2023
19 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240212065780/en/
Media Contact: Jane Slusark, 515-362-0482,
slusark.jane@principal.com Investor Contact: Humphrey Lee,
877-909-1105, lee.humphrey@principal.com
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