filings.toolsPrincipal Financial Group 10-K 2022-12-31
Filed 2023-02-16. 2 sections, 1051K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES****SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended December 31, 2022 | |
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| OR | |
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-16725
PRINCIPAL FINANCIAL GROUP, INC**.**
(Exact name of Registrant as specified in its charter)
| | | |
|---|---|---|
| Delaware(State or other jurisdiction of incorporation or organization) | 711 High Street**,Des Moines,** Iowa 50392(Address of principal executive offices) | 42-1520346(I.R.S. Employer Identification Number) |
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| | (515) 247-5111(Registrant’s telephone number, including area code) | |
Securities registered pursuant to Section 12(b) of the Act:
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|---|---|---|
| Title of each class Common Stock, par value $0.01 | Trading symbol(s) PFG | Name of each exchange on which registered Nasdaq Global Select Market |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | 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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒
As of January 30, 2023, there were outstanding 243,104,123 shares of Common Stock, $0.01 par value per share of the Registrant.
The aggregate market value of the shares of the Registrant’s common equity held by non-affiliates of the Registrant was approximately $16.7 billion based on the closing price of $66.79 per share of Common Stock on June 30, 2022.
Documents Incorporated by Reference
The information required to be furnished pursuant to Part III of this Form 10-K is set forth in, and is hereby incorporated by reference herein from, the Registrant’s definitive proxy statement for the annual meeting of stockholders to be held on May 16, 2023, to be filed by the Registrant with the United States Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the year ended December 31, 2022.
PRINCIPAL FINANCIAL GROUP, INC.
TABLE OF CONTENTS
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
In order to ensure the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis, we have adopted disclosure controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by us in the reports we file with or submit to the SEC is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Our Chief Executive Officer, Daniel J. Houston, and our Chief Financial Officer, Deanna D. Strable-Soethout, have reviewed and evaluated our disclosure controls and procedures as of December 31, 2022, and have concluded our disclosure controls and procedures are effective.
Management’s Report on Internal Control Over Financial Reporting
Management of Principal Financial Group, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of management, including our Chief Executive Officer, Daniel J. Houston, and our Chief Financial Officer, Deanna D. Strable-Soethout, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on our evaluation, management has concluded that Principal Financial Group, Inc.’s internal control over financial reporting was effective as of December 31, 2022.
Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this annual report on Form 10-K, has issued its report on the effectiveness of our internal control over financial reporting. The report is included in Item 8. “Financial Statements and Supplementary Data.”
Changes in Internal Control Over Financial Reporting
We had no change in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information called for by Item 10 pertaining to directors is set forth in Principal Financial Group, Inc.’s proxy statement relating to the 2023 annual stockholders meeting (the “Proxy Statement”), which will be filed with the SEC on or about April 3, 2023, under the captions, “Election of Directors,” “Corporate Governance,” and “Security Ownership of Certain Beneficial Owners and Management — Delinquent Section 16(a) Reports.” Such information is incorporated herein by reference. The information called for by Item 10 pertaining to executive officers can be found in Part I of this Form 10-K under the caption, “Information about our Executive Officers.” The Company has adopted a code of ethics that applies to our principal executive officer, principal financial officer and principal accounting officer. The code of ethics has been posted on our internet website, found at www.principal.com. We intend to satisfy disclosure requirements regarding amendments to, or waivers from, any provision of our code of ethics on our website.
Item 11. Executive Compensation
The information called for by Item 11 pertaining to executive compensation is set forth in the Proxy Statement under the caption, “Executive Compensation,” and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information called for by Item 12 pertaining to security ownership of certain beneficial owners and management is set forth in the Proxy Statement under the caption, “Security Ownership of Certain Beneficial Owners and Management,” and is incorporated herein by reference.
Equity Compensation Plan Information
In general, we have two compensation plans under which our equity securities are authorized for issuance to employees or directors (not including our tax qualified pension plans): the Principal Financial Group, Inc. 2021 Stock Incentive Plan and the Principal Financial Group, Inc. Employee Stock Purchase Plan. The following table shows the number of shares of common stock issuable upon exercise of options outstanding as of December 31, 2022, the weighted average exercise price of those options and the number of shares of common stock remaining available for future issuance as of December 31, 2022, excluding shares issuable upon exercise of outstanding options.
| | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| | (a) | (b) | (c) | |||||
| | | | | | | | Number of securities | |
| | | | | | | | remaining available for | |
| | | Number of securities | | Weighted-average | | future issuance under | ||
| | | to be issued upon | | exercise price of | | equity compensation | ||
| | | exercise of outstanding | | outstanding | | plans (excluding | ||
| | | options, warrants | | options, warrants | | securities reflected | ||
| Plan Category | | and rights | | and rights | | in column (a)) | ||
| Equity compensation plans approved by our stockholders (1) | 7,964,890 | (2) | $ | 54.36 | (3) | 26,465,720 | (4) | |
| Equity compensation plans not approved by our stockholders | — | | n/a | — | |
| (1) | The Principal Financial Group, Inc. Employee Stock Purchase Plan, the Principal Financial Group, Inc. Stock Incentive Plan and the Principal Financial Group, Inc. Directors Stock Plan were each approved by our sole stockholder, Principal Mutual Holding Company, prior to our initial public offering of common stock on October 22, 2001. Subsequently, the Principal Financial Group, Inc. 2005 Stock Incentive Plan and the Principal Financial Group, Inc. 2005 Directors Stock Plan were each approved by our stockholders on May 17, 2005. An amendment to the Principal Financial Group, Inc. Employee Stock Purchase Plan to increase the number of shares available for issuance under the plan was approved on May 19, 2009. On May 18, 2010, our shareholders approved the 2010 Stock Incentive Plan, which replaced the 2005 Stock Incentive Plan. The 2010 Stock Incentive Plan was subsequently renamed the Amended and Restated 2010 Stock Incentive Plan. On May 20, 2014, our shareholders approved the Principal Financial Group, Inc. 2014 Stock Incentive Plan and the Principal Financial Group, Inc. 2014 Directors Stock Plan. On May 19, 2020, our shareholders approved the Principal Financial Group, Inc. 2020 Directors Stock Plan. On May 18, 2021, our shareholders approved the Principal Financial Group, Inc. 2021 Stock Incentive Plan. |
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| (2) | Includes 3,322,841 options outstanding under the employee stock incentive plans, 817,684 performance shares under the employee stock incentive plans, 3,515,438 restricted stock units under the employee stock incentive plans, 241,037 restricted stock units under the directors stock plans and 67,890 other stock-based awards under the director stock plans for obligations under the Deferred Compensation Plan for Non-Employee Directors of Principal Financial Group, Inc. |
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| (3) | The weighted-average exercise price relates only to outstanding stock options, not to outstanding performance shares, restricted stock units or other stock-based awards. |
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| (4) | This number includes 3,458,225 shares remaining for issuance under the Employee Stock Purchase Plan and 23,007,495 shares available for issuance in respect of future awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards under the 2021 Stock Incentive Plan. |
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Item 13. Certain Relationships and Related Transactions, and Director Independence
The information called for by Item 13 pertaining to certain relationships and related transactions is set forth in the Proxy Statement under the captions, “Corporate Governance — Director Independence,” and “Corporate Governance — Certain Relationships and Related Transactions,” and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information called for by Item 14 pertaining to principal accounting fees and services is set forth in the Proxy Statement under the caption, “Ratification of Appointment of Independent Registered Public Accountants,” and is incorporated herein by reference.
PART IV
Item 15. Exhibits and Financial Statement Schedules
| a. | Documents filed as part of this report. |
|---|
- Financial Statements (see Item 8. Financial Statements and Supplementary Data)
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Audited Consolidated Financial Statements
Consolidated Statements of Financial Position
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
- Schedule I — Summary of Investments — Other Than Investments in Related Parties
Schedule II — Condensed Financial Information of Registrant (Parent Only)
Schedule III — Supplementary Insurance Information
Schedule IV — Reinsurance
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
- Exhibits
Index of Exhibits
(Item 15.a.3.)
Paper copies of exhibits will be provided to shareholders upon reasonable request and upon payment of reasonable copying and mailing expenses.
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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. | |
|---|---|---|
| | | |
| Dated: February 16, 2023 | By | /s/ Deanna D. Strable-Soethout Deanna D. Strable-Soethout Executive Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Dated: February 16, 2023
| By | /s/ DANIEL J. HOUSTON | | By | /S/ SCOTT M. MILLS |
|---|---|---|---|---|
| | Daniel J. Houston | | | Scott M. Mills |
| | Chairman, President, Chief Executive Officer and | | | Director |
| | Director | | | |
| | | | | |
| By | /s/ DEANNA D. STRABLE-SOETHOUT | | By | /S/ H. ELIZABETH MITCHELL |
| | Deanna D. Strable-Soethout | | | H. Elizabeth Mitchell |
| | Executive Vice President and Chief | | | Director |
| | Financial Officer (Principal Financial Officer and | | | |
| | Principal Accounting Officer) | | | |
| | | | | |
| By | /s/ JONATHAN S. AUERBACH | | By | /S/ CLAUDIO N. MURUZABAL |
| | Jonathan S. Auerbach | | | Claudio N. Muruzabal |
| | Director | | | Director |
| | | | | |
| By | /s/ MARY E. BEAMS | | By | /S/ DIANE C. NORDIN |
| | Mary E. Beams | | | Diane C. Nordin |
| | Director | | | Director |
| | | | | |
| By | /s/ JOCELYN CARTER-MILLER | | By | /S/ BLAIR C. PICKERELL |
| | Jocelyn Carter-Miller | | | Blair C. Pickerell |
| | Director | | | Director |
| | | | | |
| By | /s/ MICHAEL T. DAN | | By | /s/ CLARE S. RICHER |
| | Michael T. Dan | | | Clare S. Richer |
| | Director | | | Director |
| | | | | |
| By | /s/ ROGER C. HOCHSCHILD | | By | /s/ ALFREDO RIVERA |
| | Roger C. Hochschild | | | Alfredo Rivera |
| | Director | | | Director |
Schedule I - Summary of Investments - Other Than Investments in Related Parties
December 31, 2022
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|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | Amount as | ||||
| | | | | | | | | shown in the | ||
| | | | | | | | | consolidated | ||
| | | | | | | | | statement of | ||
| | | | | | Fair | | financial | |||
| Type of Investment | Cost | value | position | |||||||
| | | (in millions) | ||||||||
| Fixed maturities, available-for-sale: | | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government corporations and agencies | | $ | 1,990.9 | | $ | 1,739.8 | | $ | 1,739.8 | |
| States, municipalities and political subdivisions | | | 7,355.4 | | | 6,232.3 | | | 6,232.3 | |
| Foreign governments | | | 611.2 | | | 567.3 | | | 567.3 | |
| Public utilities | | | 5,442.8 | | | 4,783.0 | | | 4,783.0 | |
| Redeemable preferred stock | | | 157.6 | | | 128.1 | | | 128.1 | |
| All other corporate bonds | | | 34,770.0 | | | 31,272.1 | | | 31,272.1 | |
| Residential mortgage-backed pass-through securities | | | 2,420.6 | | | 2,228.7 | | | 2,228.7 | |
| Commercial mortgage-backed securities | | | 5,572.2 | | | 4,864.6 | | | 4,864.6 | |
| Collateralized debt obligations | | | 4,705.6 | | | 4,566.4 | | | 4,566.4 | |
| Other debt obligations | | | 7,236.8 | | | 6,507.6 | | | 6,507.6 | |
| Total fixed maturities, available-for-sale | | | 70,263.1 | | | 62,889.9 | | | 62,889.9 | |
| Fixed maturities, trading | | | 760.7 | | | 760.7 | | | 760.7 | |
| Equity securities: | | | | | | | | | | |
| Banks, trust and insurance companies | | | 363.7 | | | 363.7 | | | 363.7 | |
| Public utilities | | | 0.2 | | | 0.2 | | | 0.2 | |
| Industrial, miscellaneous and all other | | | 809.8 | | | 809.8 | | | 809.8 | |
| Other corporate | | | 420.1 | | | 420.1 | | | 420.1 | |
| Non-redeemable preferred stock | | | 114.8 | | | 114.8 | | | 114.8 | |
| Total equity securities | | | 1,708.6 | | | 1,708.6 | | | 1,708.6 | |
| Mortgage loans | | | 20,629.8 | | XXXX | | | 20,629.8 | | |
| Real estate, net: | | | | | | | | | | |
| Real estate acquired in satisfaction of debt | | | 2.3 | | XXXX | | | 2.3 | | |
| Other real estate | | | 2,237.4 | | XXXX | | | 2,237.4 | | |
| Policy loans | | | 784.7 | | XXXX | | | 784.7 | | |
| Other investments | | | 6,075.9 | | XXXX | | | 6,075.9 | | |
| Total investments | | $ | 102,462.5 | | XXXX | | $ | 95,089.3 | |
Schedule II - Condensed Financial Information of Registrant (Parent Only)
Statements of Financial Position
| | | | | | | | |
|---|---|---|---|---|---|---|---|
| | | December 31, | |||||
| | 2022 | 2021 | |||||
| | | (in millions) | |||||
| Assets | | | | | | | |
| Fixed maturities, available-for-sale | | $ | 17.1 | | $ | 1,051.9 | |
| Fixed maturities, trading | | | — | | | 109.0 | |
| Other investments | | | 12.0 | | | 10.4 | |
| Cash and cash equivalents | | | 492.5 | | | 320.3 | |
| Income taxes receivable | | | — | | 20.4 | | |
| Deferred income taxes | | | 297.1 | | 320.9 | | |
| Amounts receivable from subsidiaries | | | 5.4 | | 5.5 | | |
| Other assets | | | 21.8 | | 27.1 | | |
| Investment in unconsolidated entities | | | 13,448.7 | | 18,932.4 | | |
| Total assets | | $ | 14,294.6 | | $ | 20,797.9 | |
| | | | | | | | |
| Liabilities | | | | | | | |
| Long-term debt | | $ | 3,929.2 | | $ | 4,226.2 | |
| Accrued investment payable | | | 24.7 | | 25.3 | | |
| Income taxes currently payable | | | 2.4 | | | — | |
| Pension liability | | | 332.7 | | | 473.2 | |
| Other liabilities | | | 3.9 | | | 3.8 | |
| Total liabilities | | | 4,292.9 | | 4,728.5 | | |
| | | | | | | | |
| Stockholders’ equity | | | | | | | |
| Common stock, par value $0.01 per share; 2,500 million shares authorized; 489.8 million and 484.9 million shares issued as of 2022 and 2021; 243.5 million and 261.7 million shares outstanding as of 2022 and 2021 | | | 4.9 | | 4.8 | | |
| Additional paid-in capital | | | 10,740.4 | | 10,495.0 | | |
| Retained earnings | | | 17,042.3 | | 12,884.5 | | |
| Accumulated other comprehensive income (loss) | | | (7,199.0) | | 1,610.9 | | |
| Treasury stock, at cost (246.3 million and 223.2 million shares as of 2022 and 2021) | | | (10,586.9) | | (8,925.8) | | |
| Total stockholders’ equity attributable to Principal Financial Group, Inc. | | | 10,001.7 | | 16,069.4 | | |
| Total liabilities and stockholders’ equity | | $ | 14,294.6 | | $ | 20,797.9 | |
See accompanying notes.
Statements of Operations
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|---|---|---|---|---|---|---|---|---|---|---|
| | | For the year ended December 31, | ||||||||
| | 2022 | 2021 | 2020 | |||||||
| | | (in millions) | ||||||||
| Revenues | | | | | | | | | | |
| Net investment income | | $ | 16.8 | | $ | 18.6 | | $ | 13.3 | |
| Net realized capital gains (losses) | | | (53.6) | | | (14.9) | | | 7.0 | |
| Total revenues | | | (36.8) | | | 3.7 | | | 20.3 | |
| | | | | | | | | | | |
| Expenses | | | | | | | | | | |
| Other operating costs and expenses | | | 188.8 | | | 160.9 | | | 200.0 | |
| Total expenses | | | 188.8 | | | 160.9 | | | 200.0 | |
| | | | | | | | | | | |
| Loss before income taxes | | | (225.6) | | | (157.2) | | | (179.7) | |
| Income tax benefits | | | (33.8) | | | (35.6) | | | (46.1) | |
| Equity in the net income of subsidiaries | | | 5,003.4 | | | 1,832.2 | | | 1,529.4 | |
| | | | | | | | | | | |
| Net income attributable to Principal Financial Group, Inc. | | $ | 4,811.6 | | $ | 1,710.6 | | $ | 1,395.8 | |
See accompanying notes.
Statements of Cash Flows
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | For the year ended December 31, | ||||||||
| | 2022 | 2021 | 2020 | |||||||
| | | (in millions) | ||||||||
| Operating activities | | | | | | | | | | |
| Net income | | $ | 4,811.6 | | $ | 1,710.6 | | $ | 1,395.8 | |
| Adjustments to reconcile net income to net cash used in operating activities: | | | | | | | | | | |
| Net realized capital (gains) losses | | | 53.6 | | | 14.9 | | | (7.0) | |
| Stock-based compensation | | | 1.7 | | | 1.6 | | | 1.4 | |
| Equity in the net income of subsidiaries | | | (5,003.4) | | | (1,832.2) | | | (1,529.4) | |
| Changes in: | | | | | | | | | | |
| Net cash flows for trading securities and equity securities with operating intent | | | 99.9 | | | 66.1 | | | 88.4 | |
| Current and deferred income tax benefits | | | (2.5) | | | (4.8) | | | (13.5) | |
| Other | | | (30.2) | | | (34.5) | | | 49.1 | |
| Net cash used in operating activities | | | (69.3) | | | (78.3) | | | (15.2) | |
| Investing activities | | | | | | | | | | |
| Fixed maturities available-for-sale and equity securities with intent to hold: | | | | | | | | | | |
| Purchases | | | — | | | (462.3) | | | (736.5) | |
| Sales | | | 935.9 | | | — | | | — | |
| Maturities | | | 52.7 | | | 190.2 | | | 193.7 | |
| Net purchases of property and equipment | | | (0.1) | | | (0.1) | | | (0.1) | |
| Net change in other investments | | | 14.3 | | | 46.7 | | | (50.0) | |
| Dividends and returns of capital received from unconsolidated entities | | | 1,660.3 | | | 1,826.3 | | | 799.1 | |
| Net cash provided by investing activities | | | 2,663.1 | | | 1,600.8 | | | 206.2 | |
| Financing activities | | | | | | | | | | |
| Issuance of common stock | | | 181.7 | | | 86.7 | | | 42.8 | |
| Acquisition of treasury stock | | | (1,661.0) | | | (937.2) | | | (307.0) | |
| Dividends to common stockholders | | | (642.3) | | | (654.1) | | | (614.5) | |
| Principal repayments of long-term debt | | | (300.0) | | | — | | | — | |
| Issuance of long-term debt | | | — | | | — | | | 595.2 | |
| Net cash used in financing activities | | | (2,421.6) | | | (1,504.6) | | | (283.5) | |
| | | | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | 172.2 | | | 17.9 | | | (92.5) | |
| Cash and cash equivalents at beginning of year | | | 320.3 | | | 302.4 | | | 394.9 | |
| | | | | | | | | | | |
| Cash and cash equivalents at end of year | | $ | 492.5 | | $ | 320.3 | | $ | 302.4 | |
See accompanying notes.
(1) Basis of Presentation
The accompanying condensed financial information should be read in conjunction with the consolidated financial statements and notes thereto of Principal Financial Group, Inc.
In the parent company only financial statements, our investment in unconsolidated entities is stated at cost plus equity in undistributed earnings of subsidiaries.
Principal Financial Group, Inc. sponsors nonqualified benefit plans for select employees and agents and is responsible for the obligations of these plans. Nonqualified plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants. The invested assets and benefit plan liabilities reported in the statements of financial position exclude amounts held in these trusts. The Rabbi trusts had $852.3 million and $889.0 million of plan assets and $691.8 million and $732.9 million of benefit plan liabilities as of December 31, 2022 and 2021, respectively.
(2) Dividends and Returns of Capital Received from Unconsolidated Entities
The parent company received cash dividends and returns of capital totaling $1,660.3 million, $1,826.3 million and $799.1 million from subsidiaries in 2022, 2021 and 2020, respectively.
Schedule III - Supplementary Insurance Information
As of December 31, 2022 and 2021 and for each of the years ended December 31, 2022, 2021 and 2020
| | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | Contractholder | ||||
| | | Deferred | | Future policy | | and other | ||||
| | | acquisition | | benefits and | | policyholder | ||||
| Segment | costs | claims | funds | |||||||
| | | (in millions) | ||||||||
| 2022: | | | | | | | | | | |
| Retirement and Income Solutions | | $ | 1,271.5 | | $ | 28,322.9 | | $ | 35,262.8 | |
| Principal Global Investors | | | — | | | — | | | — | |
| Principal International | | | 7.5 | | | 4,275.1 | | | 942.3 | |
| U.S. Insurance Solutions | | | 3,407.9 | | | 12,128.2 | | | 7,943.3 | |
| Corporate | | | — | | | 148.7 | | | (360.6) | |
| Total | | $ | 4,686.9 | | $ | 44,874.9 | | $ | 43,787.8 | |
| | | | | | | | | | | |
| 2021: | | | | | | | | | | |
| Retirement and Income Solutions | | $ | 819.4 | | $ | 27,716.5 | | $ | 35,941.4 | |
| Principal Global Investors | | | — | | | — | | | — | |
| Principal International | | | 8.4 | | | 3,813.5 | | | 1,047.2 | |
| U.S. Insurance Solutions | | | 2,929.7 | | | 12,262.1 | | | 8,039.6 | |
| Corporate | | | — | | | 156.0 | | | (359.2) | |
| Total | | $ | 3,757.5 | | $ | 43,948.1 | | $ | 44,669.0 | |
Schedule III - Supplementary Insurance Information - (continued)
As of December 31, 2022 and 2021 and for each of the years ended December 31, 2022, 2021 and 2020
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | Amortization of | | | | ||
| | | Premiums and | | Net | | Benefits, claims | | deferred | | Other | ||||||
| | | other | | investment | | and settlement | | acquisition | | operating | ||||||
| Segment | considerations | income (1) | expenses | costs | expenses (1) | |||||||||||
| | | (in millions) | ||||||||||||||
| 2022: | | | | | | | | | | | | | | | | |
| Retirement and Income Solutions | | $ | 1,959.7 | | $ | 2,252.2 | | $ | 3,228.6 | | $ | 134.2 | | $ | 1,606.8 | |
| Principal Global Investors | | | — | | | 13.1 | | | — | | | — | | | 1,093.5 | |
| Principal International | | | 77.7 | | | 818.7 | | | 697.5 | | | 1.0 | | | 432.6 | |
| U.S. Insurance Solutions | | | 3,306.5 | | | 564.2 | | | 2,421.1 | | | 249.2 | | | 1,027.9 | |
| Corporate | | | (4.2) | | | 182.2 | | | 23.6 | | | — | | | 420.7 | |
| Total | | $ | 5,339.7 | | $ | 3,830.4 | | $ | 6,370.8 | | $ | 384.4 | | $ | 4,581.5 | |
| | | | | | | | | | | | | | | | | |
| 2021: | | | | | | | | | | | | | | | | |
| Retirement and Income Solutions | | $ | 1,883.6 | | $ | 2,674.4 | | $ | 3,450.1 | | $ | 116.7 | | $ | 1,715.2 | |
| Principal Global Investors | | | — | | | 3.9 | | | — | | | — | | | 1,128.6 | |
| Principal International | | | 127.5 | | | 631.1 | | | 610.0 | | | 1.2 | | | 469.1 | |
| U.S. Insurance Solutions | | | 2,830.4 | | | 917.1 | | | 3,031.7 | | | 167.5 | | | 998.2 | |
| Corporate | | | — | | | 179.6 | | | 5.2 | | | — | | | 390.8 | |
| Total | | $ | 4,841.5 | | $ | 4,406.1 | | $ | 7,097.0 | | $ | 285.4 | | $ | 4,701.9 | |
| | | | | | | | | | | | | | | | | |
| 2020: | | | | | | | | | | | | | | | | |
| Retirement and Income Solutions | | $ | 3,221.0 | | $ | 2,457.9 | | $ | 4,899.4 | | $ | 82.2 | | $ | 1,578.2 | |
| Principal Global Investors | | | — | | | 5.6 | | | — | | | — | | | 1,029.6 | |
| Principal International | | | 156.6 | | | 446.8 | | | 440.7 | | | 1.2 | | | 416.8 | |
| U.S. Insurance Solutions | | | 2,659.8 | | | 850.6 | | | 2,937.2 | | | 304.7 | | | 936.9 | |
| Corporate | | | — | | | 129.7 | | | 4.2 | | | — | | | 296.9 | |
| Total | | $ | 6,037.4 | | $ | 3,890.6 | | $ | 8,281.5 | | $ | 388.1 | | $ | 4,258.4 | |
| (1) | Allocations of net investment income and certain operating expenses are based on a number of assumptions and estimates. Reported operating results would change by segment if different methods were applied. |
|---|
Schedule IV - Reinsurance
As of December 31, 2022, 2021 and 2020 and for each of the years then ended
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | Percentage | |
| | | | | | Ceded to | | Assumed | | | | | of amount | |||
| | | Gross | | other | | from other | | | | | assumed | ||||
| | amount | companies | companies | Net amount | to net | ||||||||||
| | | ($ in millions) | |||||||||||||
| 2022: | | | | | | | | | | | | | | | |
| Life insurance in force | | $ | 692,200.8 | | $ | 223,416.6 | | $ | 627.4 | | $ | 469,411.6 | | 0.1 | % |
| | | | | | | | | | | | | | | | |
| Premiums: | | | | | | | | | | | | | | | |
| Life insurance and annuities | | $ | 3,414.2 | | $ | 298.6 | | $ | 1.0 | | $ | 3,116.6 | | — | % |
| Accident and health insurance | | | 2,380.9 | | | 157.8 | | | — | | | 2,223.1 | | — | % |
| Total | | $ | 5,795.1 | | $ | 456.4 | | $ | 1.0 | | $ | 5,339.7 | | — | % |
| | | | | | | | | | | | | | | | |
| 2021: | | | | | | | | | | | | | | | |
| Life insurance in force | | $ | 667,509.8 | | $ | 383,937.7 | | $ | 787.8 | | $ | 284,359.9 | | 0.3 | % |
| | | | | | | | | | | | | | | | |
| Premiums: | | | | | | | | | | | | | | | |
| Life insurance and annuities | | $ | 3,323.3 | | $ | 494.9 | | $ | 1.5 | | $ | 2,829.9 | | 0.1 | % |
| Accident and health insurance | | | 2,167.3 | | | 155.7 | | | — | | | 2,011.6 | | — | % |
| Total | | $ | 5,490.6 | | $ | 650.6 | | $ | 1.5 | | $ | 4,841.5 | | — | % |
| | | | | | | | | | | | | | | | |
| 2020: | | | | | | | | | | | | | | | |
| Life insurance in force | | $ | 626,155.6 | | $ | 377,308.2 | | $ | 904.1 | | $ | 249,751.5 | | 0.4 | % |
| | | | | | | | | | | | | | | | |
| Premiums: | | | | | | | | | | | | | | | |
| Life insurance and annuities | | $ | 4,608.7 | | $ | 453.1 | | $ | 1.7 | | $ | 4,157.3 | | — | % |
| Accident and health insurance | | | 2,036.7 | | | 156.6 | | | — | | | 1,880.1 | | — | % |
| Total | | $ | 6,645.4 | | $ | 609.7 | | $ | 1.7 | | $ | 6,037.4 | | — | % |