Principal Financial Group Inc

Good morning and welcome to the principal financial group fourth quarter 2025 financial results and 2026 outlook conference call there will be a question and answer period after the speakers have completed their prepared remarks. To ask a question during the session, you will need to press star one one on your telephone to withdraw your question, please press star one one again. we would ask that you be respectful of others and limit your questions to one and a follow-up so we can get everyone in the queue. I would now like to turn the conference call over to Humphrey Lee, Vice President of Investor Relations.

Thank you and good morning. Welcome to Principal Financial Group's fourth quarter and full year 2025 earnings and 2026 Outlook conference call. As always, Materials related to today's call are available on our website at investors.principal.com. Following a reading of the Safe Harbor provision, CEO Deanna Schrabel and CFO Joe Pitts will deliver prepared remarks. We will then open the call for questions. Members of senior management are also available for Q&A. Some of the comments made during this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The company does not revise or update them to reflect new information, subsequent events, or changes in strategy. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied are discussed in the company's most recent annual report on Form 10-K filed by the company with the U.S. Securities and Exchange Commission. Additionally, some of the comments made during this conference call may refer to non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures may be found in our earnings release, financial supplement, and slide presentation. Deanna?

Thanks, Humphrey, and welcome to everyone on the call. This morning, I'll walk through our strong full-year 2025 performance. Then Joel will follow with more details about our financial results, business unit performance, and our 2026 outlook. Our results in 2025 follow strong results in 2024, where we delivered our enterprise financial targets in both years, demonstrating the strength and quality of our execution. This momentum and our strong diversified business mix positions us well for 2026. We expect to deliver another year of performance within our target ranges for EPS growth, free capital flow conversion, and ROE. Turning to our results, which can be found on slide two, our adjusted non-GAAP earnings per share growth for full year 2025 was 12% and at the high end of our target range. Reported results were even stronger with EPS growth of nearly 20%. This growth was driven by favorable market conditions, strong underwriting performance and specialty benefits, and margin expansion with disciplined expense management across the enterprise. all while continuing to invest in the business. Our performance showcases the power of our diversified and resilient business mix. Strong, high-quality earnings and continued margin expansion reflects disciplined execution across all areas of the company. This momentum translates directly into robust capital generation, enabling us to invest in growth while continuing to deliver attractive returns to shareholders. We returned over $1.5 billion in 2025, including approximately $850 million of share repurchases and $685 million of common stock dividends, all within our targets. Our continued focus and execution against our strategic priorities is driving results. As shown on slide three, we remain focused on three attractive profit pools. The retirement ecosystem, small and mid-sized businesses, and global asset management, where growth is stronger, returns are higher, and our integrated business model creates differentiated advantages. Let me share some key highlights of our progress in each area for full year 2025, starting with the retirement ecosystem, in which we offer a comprehensive suite of capabilities across recordkeeping, asset management, wealth management, and income solutions. Our momentum is broad-based. where total retirement transfer deposits of $35 billion grew 9% year over year, and Workplace Savings and Retirement Solutions, or WSRS, recurring deposits increased 5%. This growth reflects our ability to win new business and retain existing clients in a competitive marketplace. What really excites me is the engagement we're seeing from participants on our platform. WSRS deferring participants grew over 3%, and those who are saving are saving more, with average deferrals per member increasing over 2%. Participant roll-ins reached $6.5 billion in 2025, up 15% over 2024, as we make it easy for participants to consolidate retirement savings from previous employers onto our platform. These engagement metrics demonstrate the strength of our platform in serving participants' retirement needs. Turning to sales, we continue to see momentum across key channels. Pension risk transfer sales for the year totaled $3 billion across 70 cases at attractive returns. Importantly, nearly a quarter of PRT premiums came from existing clients, highlighting the power of our integrated retirement solutions. Our retirement investment expertise continues to gain traction. DCIO sales were nearly $8 billion in 2025, demonstrating that our investment capabilities resonate with third-party retirement platforms. Additionally, this year we expanded and enhanced our retirement investment solutions, addressing a broader spectrum of plan sponsor needs. These connections within and across our businesses demonstrate a distinct competitive advantage as we deliver comprehensive retirement solutions. Turning to our small and mid-sized business market, our longstanding focus and differentiated capabilities in this attractive market continues to deliver results. In retirement, growth in our SMB market remains strong. WSRS recurring deposits grew 8% in 2025, and transfer deposits increased 32%. This, along with strong new business activity and retention, resulted in account value net cash flow of positive $1.5 billion. In benefits and protection, we continue to deepen customer relationships. On average, our group benefits customers now have 3.13 products with us, up nearly 3% compared to 2024. Employment growth for our block was nearly 2% on a trailing 12-month basis. This reflects both the resilience of the small business market and the value we deliver to help employers attract and retain talent. Additionally, life business market premium and fees grew 15% in 2025, demonstrating strong demand for specialized solutions which help business owners protect their key assets. In global asset management, we're generating strong new business momentum with continued focus on our competitive differentiators. Investment management gross sales reach $127 billion in 2025, up 16% over full year 2024, with particular strong momentum in private markets where sales increased 50%. Net cash flow in 2025 was strong in key growth areas. Our private markets capabilities generated positive net cash flow of $3.5 billion across real estate, infrastructure, and private credit. Our ETF platform added nearly $2 billion in positive net cash flow, reflecting increased momentum in delivering solutions that meet evolving investor needs. This contributed to strong AUM growth across our platform. Private markets AUM grew 12% year over year, and our ETF platform reached record AUM of $9 billion. In international pension, AUM grew 24% to record levels, demonstrating the strength of our diversified global platform. Looking across our three strategic growth areas, our execution in 2025 and the momentum we're seeing position us well for another strong year in 2026. Several early indicators stand out. Elevated quote volumes are materializing across distribution channels, and we're making strategic investments that are driving meaningful engagement and competitive advantage. Managed account adoption is accelerating, with participant enrollment up 51% in 2025, with account values over $9 billion. In our SMB segment, group benefits quote activity is strengthening. following our disciplined underwriting approach in dental. Additionally, new paid family medical leave markets in 2026 will contribute to growth as more states adopt mandated requirements similar to past years. In global asset management, demand for private market solutions continues to be demonstrated through increased RFP volume up 16% over the average of the last three years. Our growth expectations in this space are driven by focused new product development and strengthened through recent mandate takeovers, which further demonstrate client confidence in our capabilities. We're also continuing to innovate in the ways we interact with customers across the enterprise, leveraging data and emerging technologies, including AI, to deepen engagement and improve customer experience. The momentum and strength we are seeing across our businesses continues to build our confidence in delivering our financial goals as we expand our customer base to over 75 million worldwide. Lastly, as part of our ongoing business portfolio optimization, we recently announced the sale of our runoff annuities business in Chile. This action reflects the continued discipline we've applied over the last several years to strategically focus on higher growth, higher return, and more capital-efficient businesses. We are confident in the strength of our current portfolio and the way it positions us for future growth. Before I turn this over to Joel, I want to share some of the important recognitions we've received. For the 14th consecutive year, principal asset management was named a best place to work in money management by pensions and investments earning this recognition every year since the inception of the award. We were also recognized as a 2026 Military Friendly Employer, receiving this recognition since 2017. In addition, we earned the Equality 100 Award for 2026 by the Corporate Equality Index. These recognitions reinforce our culture and competitive advantages, help us attract and retain top talent, and differentiate us in the marketplace. We closed 2025 with momentum across our diverse portfolio of businesses. I'm incredibly proud of our results, and our success is a testament to the focus and hard work of our nearly 20,000 global employees. Their ongoing commitment to excellence and our customers enabled us to capitalize on opportunities throughout the year and has set the stage for continued growth in 2026. Joel?