On January 16, 2025, the company announced an agreement with Bank Consortium Trust Company (“BCT”) to expand investment management capabilities and exit sponsor and trustee (pension) roles in Hong Kong for MPF Schemes. This strategic shift could allow Principal to focus on its core competencies.

The company believes small and medium-sized businesses are an underserved market, offering attractive growth opportunities in the retirement and employee benefit markets. This indicates a targeted strategy for future expansion.

The company cannot predict the long-term impacts of climate change, but will continue to monitor new developments in the future. This indicates a forward-looking approach to potential environmental risks and opportunities.

The company states its commitment to continuous improvement and ongoing validation of its integrated risk management framework. This suggests a proactive approach to risk management and adaptation to changing circumstances.

The company highlights its focus on attracting, retaining, and developing talent, indicating a commitment to human capital management and workforce development. This is further supported by the data for average tenure and annual turnover rate.

The company emphasizes its commitment to an inclusive culture and providing a work environment where every employee feels welcomed, is respected and has an opportunity to thrive. This suggests a focus on diversity, equity, and inclusion initiatives.

The company acknowledges that adverse capital and credit market conditions may significantly affect its ability to meet liquidity needs, as well as its access to capital and cost of capital. This highlights a potential risk related to macroeconomic factors and financial market volatility.

The company notes that changes in interest rates or credit spreads or a prolonged low interest rate environment may adversely affect its results of operations, financial condition and liquidity, and its net income can vary from period to period. This highlights a significant risk factor related to macroeconomic conditions and market dynamics.

The company acknowledges that its requirements to post collateral or make payments related to declines in market value of specified assets may adversely affect its liquidity and expose it to counterparty credit risk. This highlights a potential risk related to financial market volatility and derivative usage.

The company acknowledges that it competes with many financial services companies, such as banks, mutual funds, institutional trust companies, broker-dealers, insurers, recordkeepers, asset managers and wealth managers. Some of these companies may offer a broader array of products, more competitive pricing, greater diversity of distribution sources, better brand recognition or, with respect to insurers, higher financial strength ratings.

The company distinguishes itself from its competitors through three positional advantages: privileged customer access through small and midsized businesses, retirement ecosystem and global asset management; extensive solutions and expertise integrated within and across business segments; and focus on attractive markets.

The company believes its strong ratings are an important factor in marketing its products to distributors and customers, as ratings information is broadly disseminated and generally used throughout the industry. This highlights the importance of maintaining strong financial strength ratings for competitive advantage.

The company maintains credit facilities with various financial institutions as a potential source of excess liquidity. These facilities are in place to bridge timing in cash flows to minimize the cost of meeting obligations, particularly during periods when alternative sources of liquidity are limited.

The company is committed to continuous improvement and ongoing validation of its integrated risk management framework. The company is also committed to continuous improvement and ongoing validation of its integrated risk management framework.

Each state has insurance guaranty association laws under which insurers doing business in a state can be assessed, up to prescribed limits, to cover contractual benefit obligations of insolvent insurance companies. The guaranty associations of each state levy assessments on member insurers doing business in their states based on the proportionate share of the premiums written by such insurer in the lines of business in which the insolvent insurer is engaged.

The company is subject to numerous federal, state, and international regulations regarding the privacy and security of personal information. These laws vary widely by jurisdiction. The laws and regulations that affect our business include, but are not limited to, the EU GDPR, U.S. federal, state, and local data protection laws such as the New York Department of Financial Services Part 500 cybersecurity requirements for financial services companies, the California Consumer Privacy Act and California Privacy Rights Act, China's Cybersecurity Law, and the China Personal Information Protection Law. Ongoing global developments in artificial intelligence (“AI”) regulations, such as the EU AI Act, Colorado AI Act, and other AI-related legislation will continue to increase and require attention and investments.

As a general matter, the company takes a proactive approach to assessing and monitoring cybersecurity-specific risks that is oriented around monitoring emerging external threats, ensuring controls are in place to identify and manage risk within our technology environment and creating a culture of vigilance across the organization.

The company tests for and resolves vulnerabilities within our systems and applications by using network and infrastructure vulnerability testing and adversary emulation, also known as red teaming and hire a third party to do the same at least once a year. We maintain a vulnerability disclosure program to enhance discovery and remediation of external-facing vulnerabilities. We also undergo a third party maturity assessment of our information security program every two years and a third party enterprise penetration test annually.

In February 2025, the Board authorized a share repurchase program of up to $1.5 billion of outstanding common stock, which has no expiration date, and is in addition to the $786.2 million that remained available under existing share repurchase authorizations as of December 31, 2024.

The company has a laddered long-term debt maturities with the next maturity occurring in May 2025. This indicates a strategy of managing debt obligations over time.

The company manages our investment risks by maintaining a well-diversified portfolio, both geographically and by sector. This indicates a strategy of mitigating risk through diversification.

Our financial and operational results could be impacted by emerging risk and changes to the regulatory landscape in areas like ESG requirements. While we closely monitor and respond to topics like social, environmental and demographic changes that include longer lifespans, income and wealth inequalities, environmental challenges and opportunities to expand global access to the financial system across all segments of the population, updated and changing regulatory and societal environment requirements could impact financial and operational results.

Changes and uncertainty in U.S. and non-U.S. legislation, policy or regulation regarding climate risk management or other ESG practices may result in higher regulatory costs, compliance costs and increased capital expenditures. Changes in regulations may also impact market conditions and our financial results, leading to realized or unrealized losses and decreased revenues.

We provide our global workforce with a myriad of opportunities to support their communities and the causes important to them. We encourage in-person and virtual volunteerism through our volunteer time off policy. As an example of this, at the Community Learning Center housed at our global headquarters, employees have ready access to a variety of volunteer opportunities, including the ability to mentor students, provide professional development coaching and teach future ready job skills such as coding.

Our results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. Continued adverse economic conditions may result in a decline in our AUM, AUA and revenues and erosion of our profit margins. In addition, in the event of extreme prolonged market events and economic downturns, we could incur significant losses.

We are exposed to foreign currency risk in our international operations as we sell products denominated in various local currencies and generally invest the associated assets in local currencies. For diversification purposes, assets backing the products may be partially invested in non-local currencies. In our U.S. operations, we also issue foreign currency-denominated funding agreements to nonqualified investors in the institutional market or invest in foreign currency-denominated investments.

Our businesses are subject to regulation and supervision by U.S. federal, state and broker dealer regulatory authorities as well as non-U.S. regulatory authorities for our operations and customers outside the U.S. Our businesses are also subject to U.S. federal, state and local tax laws as well as tax laws for jurisdictions outside the U.S. As we continue to expand our global footprint, we are subject to laws and regulations of jurisdictions where we register and sell products, even if we do not have a physical operating presence.