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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section
13 or 15(d) of the
Securities Exchange
Act of 1934
Date of Report:
October 24, 2024
(Date of earliest
event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant
as specified in its charter)
| Delaware |
1-16725 |
42-1520346 |
| (State or other jurisdiction |
(Commission file number) |
(I.R.S. Employer |
| of incorporation) |
|
Identification Number) |
711 High Street,
Des Moines, Iowa 50392
(Address of principal
executive offices)
(515) 247-5111
(Registrant’s
telephone number, including area code)
Check the appropriate
box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| | |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| | |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| | |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
| | |
| ¨ |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§203.405 of this chapter) or
rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
Emerging growth company ¨
| ¨ |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
| Title
of each class |
|
Trading
symbol(s) |
|
Name
of each exchange on which registered |
| Common Stock |
|
PFG |
|
Nasdaq Global Select Market |
| Item 2.02 | Results of Operations and Financial Condition |
On October 24, 2024, Principal Financial Group, Inc. publicly
announced information regarding its results of operations and financial condition for the quarter ended September 30, 2024. The text
of the announcement is included herewith as Exhibit 99.
| Item 9.01 |
Financial Statements and Exhibits |
| 104 | Cover Page to this Current Report on Form 8-K in Inline
XBRL |
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
| |
PRINCIPAL FINANCIAL GROUP, INC. |
| |
By: |
/s/ Joel Pitz |
| |
Name: |
Joel Pitz |
| Title: | Interim Chief Financial Officer |
Date: October 24, 2024
Exhibit 99
| INVESTOR CONTACT: |
MEDIA CONTACT: |
| Humphrey Lee |
877-909-1105,
lee.humphrey@principal.com |
Jane Slusark |
515-362-0482, slusark.jane@principal.com |
Principal Financial Group Announces Third
Quarter 2024 Results
Raises fourth quarter 2024 common stock
dividend
(Des Moines, Iowa) – Principal Financial Group®
(Nasdaq: PFG) announced results for third quarter 2024.
Third
Quarter 2024 Highlights
| · | Net
loss attributable to Principal Financial Group (PFG) of $220 million, or $0.95 per diluted
share, driven by the loss from exited business |
| · | Non-GAAP
net income attributable to PFG, excluding exited business, of $419 million, or $1.78 per
diluted share |
| · | Non-GAAP
operating earnings1 of $412 million, or $1.76 per diluted share; excluding impacts
of the 3Q24 significant variances2, non-GAAP operating earnings of $480 million,
or $2.05 per diluted share |
| · | Returned
$416 million of capital to shareholders, including $251 million of share repurchases and
$165 million of common stock dividends |
| · | Raised
fourth quarter 2024 common stock dividend to $0.73 per share, a 1 cent increase over the
third quarter 2024 dividend; the dividend will be payable on December 18, 2024, to shareholders
of record as of December 2, 2024 |
| · | Assets
under management (AUM) of $741 billion, which is included in assets under administration
(AUA) of $1.7 trillion |
| · | Strong
financial position with $1.6 billion of excess and available capital |
| |
|
|
| |
Dan Houston, chairman and CEO of Principal® |
|
| |
“Strong
business fundamentals, continued growth, and positive markets generated strong earnings in
the third quarter, and we continue to be confident in our full-year target. Our strategic
focus on higher growth markets, combined with our integrated product portfolio and strong
distribution relationships, continues to create value and drive growth for customers and
shareholders.
|
|
| |
We
returned $416 million to shareholders in the quarter, including $251 million of share repurchases,
delivering on our commitment to return excess capital to shareholders, while maintaining
our strong capital position.”
|
|
| |
|
|
1
Use of non-GAAP financial measures and their reconciliations to the most directly comparable GAAP measures are included in this
release. Non-GAAP operating earnings for total company is after tax.
2
The total company impacts of significant variances, including the actuarial assumption review, is after tax. See Exhibit 1 for
details on the impact of 3Q 2024 and 3Q 2023 significant variances on quarterly net income attributable to PFG; non-GAAP net income attributable
to PFG, excluding exited business; and non-GAAP operating earnings.
Third
Quarter Enterprise Results
In
millions except percentages, earnings per share, or otherwise noted
| |
Three
Months Ended, |
Trailing
Twelve Months, |
|
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
|
| Net
income (loss) attributable to PFG |
$(220.0) |
$1,246.2 |
N/M |
$(206.1) |
$1,478.7 |
N/M |
|
| Non-GAAP
net income attributable to PFG, excluding exited business |
$419.1 |
$544.4 |
(23)% |
$1,450.8 |
$1,726.7 |
(16)% |
|
| Non-GAAP
operating earnings |
$412.0 |
$419.7 |
(2)% |
$1,632.9 |
$1,556.6 |
5% |
|
| Non-GAAP
operating earnings, excluding impacts of significant variances2 |
$479.8 |
$446.4 |
7% |
$1,750.3 |
$1,662.4 |
5% |
|
| |
|
|
|
|
|
|
|
| Diluted
earnings per common share |
|
|
|
|
|
|
| Net
income (loss) attributable to PFG |
$(0.95) |
$5.10 |
N/M |
|
|
|
|
| Non-GAAP
net income attributable to PFG, excluding exited business |
$1.78 |
$2.23 |
(20)% |
|
|
|
|
| Non-GAAP
operating earnings |
$1.76 |
$1.72 |
2% |
|
|
|
|
| Non-GAAP
operating earnings, excluding impacts of significant variances2 |
$2.05 |
$1.83 |
12% |
|
|
|
|
| |
|
|
|
|
|
|
|
| Assets
under administration (billions) |
$1,691.0 |
$1,491.4 |
13% |
|
|
|
|
| Assets
under management (billions) |
$740.6 |
$650.6 |
14% |
|
|
|
|
Third
Quarter Segment Highlights
| · | Retirement
and Income Solutions (RIS) 40% operating margin3, excluding the significant variances
outlined in Exhibit 1, and recurring deposit growth of 10% |
| · | Principal
Global Investors (PGI) managed AUM of $541 billion increased $28 billion over second quarter
2024 and $72 billion over third quarter 2023 |
| · | Principal
International record pre-tax operating earnings of $121 million, record AUM of $185 billion,
and strong net cash flow of $2.3 billion, including $2.1 billion from investment management |
| · | Specialty
Benefits premium and fees increased 6% from third quarter 2023 |
| · | Life
Insurance business market premium and fees increased 12% from third quarter 2023 |
3
Operating margin for RIS = pre-tax operating earnings divided by net revenue.
Segment
Results
In
millions except percentages, or otherwise noted
Retirement
and Income Solutions
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating earnings4 |
$246.1 |
$304.7 |
(19)% |
$1,040.7 |
$990.8 |
5% |
| Net
revenue5 |
$679.4 |
$709.8 |
(4)% |
$2,762.2 |
$2,615.3 |
6% |
| Operating
margin |
36.2% |
42.9% |
|
37.7%* |
37.9%* |
|
*Operating
margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating
margin was 39.7% for third quarter 2024 and 38.3% for third quarter 2023.
| · | Pre-tax
operating earnings decreased $58.6 million. Excluding the significant variances outlined
in Exhibit 1, pre-tax operating earnings increased $32.0 million primarily due to higher
net revenue and operating margin. |
| · | Net
revenue decreased $30.4 million. Excluding the significant variances outlined in Exhibit 1,
net revenue increased $60.2 million, or 9%, due to growth in the business, favorable market
performance and higher net investment income. |
Principal
Global Investors
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating earnings |
$147.9 |
$151.6 |
(2)% |
$516.0 |
$524.3 |
(2)% |
| Operating
revenues less pass-through expenses6 |
$398.8 |
$393.9 |
1% |
$1,525.7 |
$1,494.5 |
2% |
| Operating
margin7 |
37.9% |
38.7% |
|
34.4% |
35.3% |
|
| Total
PGI assets under management (billions) |
$541.0 |
$469.0 |
15% |
|
|
|
| PGI
sourced assets under management (billions) |
$274.2 |
$240.9 |
14% |
|
|
|
| · | Pre-tax
operating earnings decreased $3.7 million primarily driven by muted growth in operating
revenues less pass-through expenses due to strong performance fees in the prior year quarter. |
| · | Operating
revenues less pass-through expenses increased $4.9 million primarily due to 6% growth
in management fees, resulting from higher AUM, partially offset by lower performance fees
and other revenue. |
4
Pre-tax operating earnings = operating earnings before income taxes and after noncontrolling interest.
5
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.
6
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.
7
Operating margin for PGI = pre-tax operating earnings, adjusted for noncontrolling interest divided by operating revenues less
pass-through expenses.
Principal
International
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating earnings |
$120.8 |
$70.8 |
71% |
$348.5 |
$290.4 |
20% |
| Combined
net revenue (at PFG share)8 |
$281.2 |
$239.1 |
18% |
$1,002.8 |
$942.6 |
6% |
| Operating
margin9 |
43.0% |
29.6% |
|
34.8%* |
30.8%* |
|
| Assets
under management (billions) |
$185.2 |
$168.4 |
10% |
|
|
|
*Operating
margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating
margin was 32.1% for third quarter 2024 and 31.6% for third quarter 2023.
| ● | Pre-tax
operating earnings increased $50.0 million. Excluding the significant variances outlined
in Exhibit 1, pre-tax operating earnings increased $5.9 million primarily due to improved
operating margin. |
| ● | Combined
net revenue (at PFG share) increased $42.1 million. Excluding the significant variances
outlined in Exhibit 1, combined net revenue was stable as growth in the businesses was
offset by foreign currency headwinds in Latin America. |
Specialty
Benefits
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating earnings |
$101.7 |
$147.8 |
(31)% |
$431.7 |
$440.4 |
(2)% |
| Premium
and fees |
$818.8 |
$771.3 |
6% |
$3,225.0 |
$2,986.6 |
8% |
| Operating
margin10 |
12.4% |
19.2% |
|
13.4%* |
14.7%* |
|
| Incurred
loss ratio |
62.7% |
56.1% |
|
61.6% |
60.0% |
|
*Operating
margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating
margin was 14.1% for third quarter 2024 and 14.8% for third quarter 2023.
| · | Pre-tax
operating earnings decreased $46.1 million. Excluding the significant variances outlined
in Exhibit 1, pre-tax operating earnings decreased $16.3 million primarily due to favorable
underwriting results in 3Q23, partially offset by growth in the business. |
| · | Premium
and fees increased $47.5 million driven by growth in the business. |
| · | Incurred
loss ratio was 62.7%. Excluding the significant variances outlined in Exhibit 1,
the incurred loss ratio of 61.5% increased due to unusually favorable LTD results in 3Q23
along with a higher group dental and group life loss ratio. |
8
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.
9
Operating margin for PI = pre-tax operating earnings divided by combined net revenue (at PFG share).
10
Operating margin for Benefits and Protection = pre-tax operating earnings divided by premium and fees.
Life Insurance
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating earnings (losses) |
$(37.3) |
$21.2 |
N/M |
$21.2 |
$90.9 |
(77)% |
| Premium
and fees |
$241.1 |
$241.8 |
0% |
$928.7 |
$911.1 |
2% |
| Operating
margin |
(15.5)% |
8.8% |
|
2.3%* |
10.0%* |
|
*Operating
margin – Excluding the third quarter actuarial assumption reviews and other significant variances, the trailing twelve month operating
margin was 12.5% for third quarter 2024 and 13.6% for third quarter 2023.
| · | Pre-tax
operating earnings decreased $58.5 million. Excluding the significant variances outlined
in Exhibit 1, pre-tax operating earnings increased $3.4 million driven by improved mortality
experience. |
| · | Premium
and fees decreased $0.7 million. Excluding the significant variances outlined in Exhibit 1,
premium and fees increased $1.0 million as strong business market growth outpaced the runoff
of the legacy life business. |
Corporate
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
%
Change |
3Q24 |
3Q23 |
%
Change |
| Pre-tax
operating losses |
$(79.4) |
$(114.8) |
31% |
$(360.2) |
$(395.0) |
9% |
| · | Pre-tax
operating losses decreased $35.4 million. Excluding the significant variances outlined
in Exhibit 1, pre-tax operating losses decreased $17.4 million due to lower operating
expenses. |
Exhibit 1
Principal
Financial Group
Impact
of 3Q 2024 and 3Q 2023 Significant Variances on Quarterly Net Income Attributable to PFG; Non-GAAP Net Income Attributable to PFG, Excluding
Exited Business; and Non-GAAP Operating Earnings
In
millions except per share data
| |
Impacts
of 3Q 2024 Significant Variances |
Impacts
of 3Q 2023 Significant Variances |
Actuarial
assumption
review |
Other
significant
variances11 |
Total
3Q 2024
significant
variances |
Actuarial
assumption
review |
Other
significant
variances12 |
Total
3Q 2023
significant
variances |
| Net income
(loss) attributable to PFG |
$ (85.7) |
1.0 |
$ (84.7) |
$ (9.7) |
$ (21.1) |
$ (30.8) |
| (Income)
loss from exited business |
20.6 |
- |
20.6 |
(0.1) |
- |
(0.1) |
| Non-GAAP net income (loss)
attributable to PFG, excluding exited business |
(65.1) |
1.0 |
(64.1) |
(9.8) |
(21.1) |
(30.9) |
| Net realized capital (gains)
losses, as adjusted |
(3.7) |
- |
(3.7) |
4.2 |
- |
4.2 |
| Non-GAAP
operating earnings |
(68.8) |
1.0 |
(67.8) |
(5.6) |
(21.1) |
(26.7) |
| Income
taxes |
(13.2) |
0.3 |
(12.9) |
68.8 |
(2.6) |
66.2 |
| Non-GAAP pre-tax operating
earnings |
$ (82.0) |
$ 1.3 |
$ (80.7) |
$ 63.2 |
$ (23.7) |
$ 39.5 |
| |
|
|
|
|
|
|
| Per
diluted share: |
|
|
|
|
|
|
| Net income (loss) attributable
to PFG |
$ (0.37) |
$ 0.01 |
$ (0.36) |
$ (0.04) |
$ (0.09) |
$ (0.13) |
| (Income)
loss from exited business |
0.09 |
0.00 |
0.09 |
(0.00) |
0.00 |
(0.00) |
| Non-GAAP net income (loss)
attributable to PFG, excluding exited business |
(0.28) |
0.01 |
(0.27) |
(0.04) |
(0.09) |
(0.13) |
| Net realized capital (gains)
losses, as adjusted |
(0.02) |
0.00 |
(0.02) |
0.02 |
0.00 |
0.02 |
| Non-GAAP
operating earnings |
$ (0.30) |
$ 0.01 |
$ (0.29) |
$ (0.02) |
$ (0.09) |
$ (0.11) |
| Weighted
average diluted common shares outstanding |
233.8 |
233.8 |
233.8 |
244.3 |
244.3 |
244.3 |
| |
|
|
|
|
|
|
| Segment pre-tax operating
earnings (losses): |
|
|
|
|
|
|
| Retirement
and Income Solutions |
$ (16.7) |
(29.5) |
$ (46.2) |
$ 53.4 |
$ (9.0) |
$ 44.4 |
| |
|
|
|
|
|
|
| Principal
Global Investors |
- |
- |
- |
- |
- |
- |
| Principal
International |
21.1 |
17.9 |
39.0 |
- |
(5.1) |
(5.1) |
| Principal
Asset Management |
21.1 |
17.9 |
39.0 |
- |
(5.1) |
(5.1) |
| |
|
|
|
|
|
|
| Specialty
Benefits |
(11.6) |
(2.0) |
(13.6) |
16.2 |
- |
16.2 |
| Life
Insurance |
(74.8) |
4.5 |
(70.3) |
(6.4) |
(2.0) |
(8.4) |
| Benefits
and Protection |
(86.4) |
2.5 |
(83.9) |
9.8 |
(2.0) |
7.8 |
| |
|
|
|
|
|
|
| Corporate |
- |
10.4 |
10.4 |
- |
(7.6) |
(7.6) |
| Total segment pre-tax
operating earnings (losses) |
$ (82.0) |
$ 1.3 |
$ (80.7) |
$ 63.2 |
$ (23.7) |
$ 39.5 |
Income
statement line item details of the 3Q24 and 3Q23 significant variances are available in our earnings conference call presentation on
our website.
11
Other significant variances in 3Q24 include 1) lower than expected variable investment income in RIS, Principal International,
Specialty Benefits and Life Insurance, partially offset by higher than expected variable investment income in Corporate; 2) impact of
higher than expected encaje performance and Latin American inflation in Principal International; 3) impact of GAAP-only regulatory closed
block adjustment in Life Insurance
12
Other significant variances in 3Q23 include 1) lower than expected variable investment income in RIS, Life Insurance and Corporate;
2) impact of lower than expected encaje performance, Latin American inflation and other items in Principal International.
Earnings
Conference Call
On Friday,
Oct. 25, 2024, at 10:00 a.m. (ET), Chairman and Chief Executive Officer Dan Houston and President and Chief Operating 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. |
| ● | Analysts
who will be asking questions will be sent a dial in number and authorization code in advance
of the call. |
| ● | 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.
Forward
Looking Statements
This release
contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995, including statements relating to share repurchases and planned dividends, the realization of our growth and business strategies
and results from ongoing operations. Forward-looking statements are made based upon our current expectations and beliefs concerning future
developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance and actual results
may differ materially from the results anticipated in the forward-looking statements. We describe risks, uncertainties and factors that
could cause or contribute to such material differences in our filings with the Securities and Exchange Commission, including in the “Risk
Factors” and “Note Concerning Forward-Looking Statements” sections in our annual report on Form 10-K for the year
ended Dec. 31, 2023, as updated or supplemented from time to time in subsequent filings. We assume no obligation to update any forward-looking
statement for any reason, which speaks as of its date.
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.
About Principal®13
Principal
Financial Group® (Nasdaq: PFG) is a global financial company with nearly 19,000 employees14 passionate about
improving the wealth and well-being of people and businesses. In business for 145 years, we’re helping approximately 68 million
customers14 plan, insure, invest, and retire, while working to support the communities where we do business, and build a diverse,
inclusive workforce. Principal® is proud to be recognized as one of the 2024 World’s Most Ethical Companies15,
a member of the Bloomberg Gender Equality Index, and a “Best Place to Work in Money Management16.” Learn more
about Principal and our commitment to building a better future at principal.com.
###
Summary
of Principal Financial Group® and Segment Results
| Principal
Financial Group, Inc. Results |
(in
millions) |
| Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
3Q24 |
3Q23 |
| Net
income (loss) attributable to PFG |
$ |
(220.0) |
$ |
1,246.2 |
$ |
(206.1) |
$ |
1,478.7 |
| (Income)
loss from exited business |
639.1 |
(701.8) |
1,656.9 |
248.0 |
| Non-GAAP
net income (loss) attributable to PFG excluding exited business |
$ |
419.1 |
$ |
544.4 |
$ |
1,450.8 |
$ |
1,726.7 |
| Net
realized capital (gains) losses, as adjusted |
(7.1) |
(124.7) |
182.1 |
(170.1) |
| Non-GAAP
Operating Earnings* |
$ |
412.0 |
$ |
419.7 |
$ |
1,632.9 |
$ |
1,556.6 |
| Income
taxes |
87.8 |
161.6 |
365.0 |
385.2 |
| Non-GAAP
Pre-Tax Operating Earnings |
$ |
499.8 |
$ |
581.3 |
$ |
1,997.9 |
$ |
1,941.8 |
| |
|
|
|
|
| Segment
Pre-Tax Operating Earnings (Losses): |
|
|
|
|
| Retirement
and Income Solutions |
$ |
246.1 |
$ |
304.7 |
$ |
1,040.7 |
$ |
990.8 |
| Principal
Asset Management |
268.7 |
222.4 |
864.5 |
814.7 |
| Benefits
and Protection |
64.4 |
169.0 |
452.9 |
531.3 |
| Corporate |
(79.4) |
(114.8) |
(360.2) |
(395.0) |
| Total
Segment Pre-Tax Operating Earnings |
$ |
499.8 |
$ |
581.3 |
$ |
1,997.9 |
$ |
1,941.8 |
|
Per
Diluted Share |
| Three
Months Ended, |
Nine
Months Ended, |
| 3Q24 |
3Q23 |
3Q24 |
3Q23 |
| Net
income (loss) attributable to PFG |
$ |
(0.95) |
$ |
5.10 |
$ |
2.81 |
$ |
6.08 |
| (Income)
loss from exited business |
2.73 |
(2.87) |
2.06 |
(1.13) |
| Non-GAAP
net income (loss) excluding exited business |
$ |
1.78 |
$ |
2.23 |
$ |
4.87 |
$ |
4.95 |
| Net realized
capital (gains) losses, as adjusted |
(0.03) |
(0.51) |
0.17 |
(0.22) |
| Impact
of dilutive shares17 |
0.01 |
0.00 |
0.00 |
0.00 |
| Non-GAAP
Operating Earnings |
$ |
1.76 |
$ |
1.72 |
$ |
5.04 |
$ |
4.73 |
| Weighted-average
diluted common shares outstanding (in millions) |
233.8 |
244.3 |
236.6 |
245.7 |
13
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.
14
As of September 30, 2024
15
Ethisphere, 2024
16
Pensions & Investments, 2023
17
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.
*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, |
| 3Q24 |
4Q23 |
| Total
assets (in billions) |
$ |
322.9 |
$ |
305.0 |
| Stockholders’
equity (in millions) |
$ |
11,281.4 |
$ |
10,961.7 |
| Total
common equity (in millions) |
$ |
11,237.4 |
$ |
10,916.0 |
| 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) |
$ |
12,464.9 |
$ |
12,735.4 |
| End
of period common shares outstanding (in millions) |
229.3 |
236.4 |
| Book
value per common share |
$ |
49.01 |
$ |
46.18 |
| Book
value per common share excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign
currency translation adjustment |
$ |
54.36 |
$ |
53.87 |
Principal
Financial Group, Inc.
Reconciliation
of U.S. GAAP to Non-GAAP Financial Measures
(in
millions, except as indicated)
| |
Period
Ended, |
| |
3Q24 |
4Q23 |
| 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 |
$ |
11,281.4 |
$ |
10,961.7 |
| Noncontrolling
interest |
(44.0) |
(45.7) |
| Stockholders’
equity available to common stockholders |
11,237.4 |
10,916.0 |
| Cumulative
change in fair value of funds withheld embedded derivative |
(1,753.9) |
(2,027.9) |
| AOCI,
other than foreign currency translation adjustment |
2,981.4 |
3,847.3 |
| 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 |
$ |
12,464.9 |
$ |
12,735.4 |
| |
|
|
| |
|
|
| 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 |
$ |
49.01 |
$ |
46.18 |
| Cumulative
change in fair value of funds withheld embedded derivative and AOCI, other than foreign currency translation adjustment |
5.35 |
7.69 |
| Book
value per common share, excluding change in fair value of funds withheld embedded derivative and AOCI other than foreign currency
translation adjustment |
$ |
54.36 |
$ |
53.87 |
Principal
Financial Group, Inc.
Reconciliation
of U.S. GAAP to Non-GAAP Financial Measures
(in
millions)
|
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| |
3Q24 |
3Q23 |
3Q24 |
3Q23 |
| Income
Taxes: |
|
|
|
|
| Total
GAAP income taxes (benefit) |
$ |
(100.4) |
$ |
354.8 |
$ |
(186.2) |
$ |
325.5 |
| Net
realized capital gains (losses) tax adjustments |
(7.6) |
(34.2) |
32.5 |
(47.5) |
| Exited
business tax adjustments |
170.0 |
(177.4) |
440.6 |
43.0 |
| Income
taxes related to equity method investments and noncontrolling interest |
25.8 |
18.4 |
78.1 |
64.2 |
| Income
taxes |
$ |
87.8 |
$ |
161.6 |
$ |
365.0 |
$ |
385.2 |
| |
|
|
|
|
| Net
Realized Capital Gains (Losses): |
|
|
|
|
| GAAP
net realized capital gains (losses) |
$ |
77.4 |
$ |
179.3 |
$ |
(51.4) |
$ |
211.8 |
| |
|
|
|
|
| Market
value adjustments to fee revenues |
- |
0.1 |
1.1 |
0.9 |
| Net
realized capital gains (losses) related to equity method investments |
0.3 |
(4.1) |
(9.0) |
(4.8) |
| Derivative
and hedging-related revenue adjustments |
17.3 |
26.6 |
52.0 |
13.7 |
| Certain
variable annuity fees |
17.7 |
18.5 |
71.9 |
73.4 |
| Sponsored
investment funds and other adjustments |
6.4 |
5.8 |
25.0 |
22.9 |
| Capital
gains distributed – operating expenses |
(36.7) |
(22.5) |
(96.4) |
(24.9) |
| Amortization
of actuarial balances |
(0.3) |
(0.3) |
(0.6) |
(0.3) |
| Derivative
and hedging-related expense adjustments |
(2.6) |
0.8 |
(1.9) |
0.9 |
| Market
value adjustments of embedded derivatives |
(5.6) |
(9.3) |
(13.0) |
(0.8) |
| Market
value adjustments of market risk benefits |
(40.8) |
(30.1) |
(75.9) |
(45.5) |
| Capital
gains distributed – cost of interest credited |
(4.8) |
(9.3) |
(85.4) |
(15.0) |
| Net
realized capital gains (losses) tax adjustments |
(7.6) |
(34.2) |
32.5 |
(47.5) |
| Net
realized capital gains (losses) attributable to noncontrolling interest, after-tax |
(13.6) |
3.4 |
(31.0) |
(14.7) |
| Total
net realized capital gains (losses) after-tax adjustments |
(70.3) |
(54.6) |
(130.7) |
(41.7) |
| |
|
|
|
|
| Net
realized capital gains (losses), as adjusted |
$ |
7.1 |
$ |
124.7 |
$ |
(182.1) |
$ |
170.1 |
| |
|
|
|
|
| Income
(Loss) from Exited Business: |
|
|
|
|
| Pre-tax
impacts of exited business: |
|
|
|
|
| Strategic
review costs and impacts |
$ |
- |
$ |
- |
$ |
- |
$ |
4.0 |
| Amortization
of reinsurance gains (losses) |
(46.4) |
(8.1) |
(492.2) |
(69.0) |
| Other
impacts of reinsured business |
(25.3) |
(39.3) |
69.1 |
(138.4) |
| Net
realized capital gains (losses) on funds withheld assets |
39.4 |
1.0 |
151.1 |
171.7 |
| Change
in fair value of funds withheld embedded derivative |
(776.8) |
925.6 |
(1,825.5) |
(259.3) |
| Tax
impacts of exited business |
170.0 |
(177.4) |
440.6 |
43.0 |
| Total
income (loss) from exited business |
$ (639.1) |
$ 701.8 |
$ (1,656.9) |
$ (248.0) |
Principal
Financial Group, Inc.
Reconciliation
of U.S. GAAP to Non-GAAP Financial Measures
(in
millions)
| |
Three
Months Ended, |
Trailing
Twelve Months, |
| 3Q24 |
3Q23 |
3Q24 |
3Q23 |
| Principal Global
Investors Operating Revenues Less Pass-Through Expenses: |
| Operating
revenues |
$ |
431.0 |
$ |
424.6 |
$ |
1,649.9 |
$ |
1,618.0 |
| Commissions
and other expenses |
(32.2) |
(30.7) |
(124.2) |
(123.5) |
| Operating
revenues less pass-through expenses |
$ |
398.8 |
$ |
393.9 |
$ |
1,525.7 |
$ |
1,494.5 |
| |
|
|
|
|
| |
|
|
|
|
| Principal International
Combined Net Revenue (at PFG Share): |
| Pre-tax
operating earnings |
$ |
120.8 |
$ |
70.8 |
$ |
348.5 |
$ |
290.4 |
| Combined
operating expenses other than pass-through commissions (at PFG share) |
160.4 |
168.3 |
654.3 |
652.2 |
| Combined
net revenue (at PFG share) |
$ |
281.2 |
$ |
239.1 |
$ |
1,002.8 |
$ |
942.6 |
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