We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Global Investors, Principal International and U.S. Insurance Solutions. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels.

The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment is organized into Retirement and Income Solutions – Fee, which includes full service accumulation, trust services, individual variable annuities and revenues and expenses associated with the purchase of the Acquired Business; and Retirement and Income Solutions – Spread, which includes individual fixed annuities, investment only, pension risk transfer and banking services.

The Principal Global Investors segment provides asset management services to our asset accumulation business, our insurance operations, the Corporate segment and third party clients. This segment also includes our mutual fund business.

The Principal International segment has operations in Latin America (Brazil, Chile and Mexico) and Asia (China, Hong Kong Special Administrative Region, India and Southeast Asia). We focus on locations with large middle classes, favorable demographics and growing long-term savings, ideally with voluntary or mandatory pension markets. We entered these locations through acquisitions, start-up operations and joint ventures.

The U.S. Insurance Solutions segment focuses on solutions for individuals and small-to-medium sized businesses and their employees. The segment is organized into Specialty Benefits insurance, which provides group dental and vision insurance, individual and group disability insurance, critical illness, accident, group life insurance and non-medical fee-for-service claims administration; and Individual Life insurance, which provides universal life, variable universal life, indexed universal life and traditional life insurance.

Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc. (“PSI”), our retail broker-dealer and registered investment advisor (“RIA”); RobustWealth, Inc. (“RobustWealth”), our financial technology company; and our exited group medical and long-term care insurance businesses are reported in this segment.

Management uses segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business.

The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings:

Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for:

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Amortization of hedge accounting book value adjustments for certain discontinued hedges,

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Certain hedge accounting market value revenue adjustments,

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Certain market value adjustments to fee revenues,

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Pre-tax net realized capital gains (losses) adjustments related to equity method investments,

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Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds,

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Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services,

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Related changes in the amortization pattern of DAC and related actuarial balances,

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Certain hedge accounting market value expense adjustments and

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Net realized capital gains (losses) distributed.

Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding:

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Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on:

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Amortization of hedge accounting book value adjustments for certain discontinued hedges,

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Certain hedge accounting market value revenue adjustments,

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Certain market value adjustments to fee revenues,

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Pre-tax net realized capital gains (losses) adjustments related to equity method investments,

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Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds and

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Recognition of deferred front-end fee revenues for sales charges on retirement and life insurance products and services.

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Pre-tax other adjustments and income taxes of equity method investments and

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Pre-tax other adjustments management believes are not indicative of overall operating trends.

The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and other postretirement benefit costs. The Corporate segment reflects the non-service components of pension and other postretirement benefit costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes.

The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements:


	December 31, 2020		December 31, 2019

	(in millions)
Assets:
Retirement and Income Solutions	$	207,288.4	$	192,698.1
Principal Global Investors		2,294.3		2,363.3
Principal International		51,707.6		48,857.6
U.S. Insurance Solutions		31,438.9		28,669.6
Corporate		3,898.5		3,499.2
Total consolidated assets	$	296,627.7	$	276,087.8


	For the year ended December 31,
	2020		2019		2018

	(in millions)
Operating revenues by segment:
Retirement and Income Solutions:
Retirement and Income Solutions – Fee	$	2,149.8	$	2,003.0	$	1,783.7
Retirement and Income Solutions – Spread		5,353.7		6,951.4		5,493.3
Total Retirement and Income Solutions (1)		7,503.5		8,954.4		7,277.0
Principal Global Investors (2)		1,539.1		1,505.8		1,736.3
Principal International		1,096.8		1,523.2		1,372.9
U.S. Insurance Solutions:
Specialty Benefits insurance		2,525.4		2,493.6		2,326.4
Individual Life insurance		1,955.0		1,955.6		1,763.6
Eliminations		(0.2)		(0.2)		(0.2)
Total U.S. Insurance Solutions		4,480.2		4,449.0		4,089.8
Corporate		(39.7)		(39.3)		(51.2)
Total segment operating revenues		14,579.9		16,393.1		14,424.8
Net realized capital gains (losses), net of related revenue adjustments		195.3		(98.5)		(132.3)
Adjustments related to equity method investments		(33.5)		(72.5)		(55.3)
Total revenues per consolidated statements of operations	$	14,741.7	$	16,222.1	$	14,237.2

Pre-tax operating earnings (losses) by segment:
Retirement and Income Solutions	$	966.9	$	874.0	$	922.2
Principal Global Investors		512.9		483.3		562.1
Principal International		243.6		390.7		272.6
U.S. Insurance Solutions		239.9		521.6		467.0
Corporate		(326.4)		(380.3)		(269.4)
Total segment pre-tax operating earnings		1,636.9		1,889.3		1,954.5
Pre-tax net realized capital gains (losses), as adjusted (3)		63.6		(140.9)		(126.4)
Adjustments related to equity method investments and noncontrolling interest		(7.0)		(55.1)		(43.7)
Income before income taxes per consolidated statements of operations	$	1,693.5	$	1,693.3	$	1,784.4

(1)	Reflects inter-segment revenues of $342.6 million, $357.8 million and $393.6 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(2)	Reflects inter-segment revenues of $273.8 million, $264.9 million and $262.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

(3)	Pre-tax net realized capital gains (losses), as adjusted, is derived as follows:


	For the year ended December 31,
	2020		2019		2018

	(in millions)
Net realized capital gains (losses)	$	302.6	$	(52.8)	$	(75.4)
Derivative and hedging-related revenue adjustments		(132.9)		(80.4)		(64.9)
Market value adjustments to fee revenues		(1.6)		—		0.1
Adjustments related to equity method investments		(1.5)		2.6		(5.4)
Adjustments related to sponsored investment funds		17.3		23.6		12.9
Recognition of front-end fee revenue		11.4		8.5		0.4
Net realized capital gains (losses), net of related revenue adjustments		195.3		(98.5)		(132.3)
Amortization of deferred acquisition costs and other actuarial balances		(26.8)		(40.8)		(27.0)
Capital (gains) losses distributed		(49.9)		(68.2)		14.4
Market value adjustments of embedded derivatives		(55.0)		66.6		18.5
Pre-tax net realized capital gains (losses), as adjusted (a)	$	63.6	$	(140.9)	$	(126.4)

(a)	As adjusted before noncontrolling interest capital gains (losses).

The following is a summary of income tax expense (benefit) allocated to our segments for purposes of determining non-GAAP operating earnings. Segment income taxes are reconciled to income taxes reported on our consolidated statements of operations.


	For the year ended December 31,
	2020		2019		2018

	(in millions)
Income tax expense (benefit) by segment:
Retirement and Income Solutions	$	106.6	$	71.8	$	85.6
Principal Global Investors		141.9		121.8		149.1
Principal International		62.0		106.8		73.3
U.S. Insurance Solutions		47.9		101.8		85.7
Corporate		(87.9)		(82.0)		(36.7)
Total segment income taxes from operating earnings		270.5		320.2		357.0
Tax expense (benefit) related to net realized capital losses, as adjusted		28.2		1.3		(71.4)
Certain adjustments related to equity method investments and noncontrolling interest		(33.7)		(72.3)		(54.9)
Total income taxes per consolidated statements of operations	$	265.0	$	249.2	$	230.7

The following is a summary of depreciation and amortization expense allocated to our segments for purposes of determining pre-tax operating earnings. Segment depreciation and amortization is reconciled to depreciation and amortization included in operating expenses in our consolidated statements of operations.


	For the year ended December 31,
	2020		2019		2018

	(in millions)
Depreciation and amortization expense by segment:
Retirement and Income Solutions	$	69.1	$	48.2	$	32.5
Principal Global Investors		21.6		18.9		21.9
Principal International		56.0		58.6		59.6
U.S. Insurance Solutions		25.1		25.0		26.2
Corporate		14.8		16.1		10.8
Total depreciation and amortization expense included in our consolidated statements of operations	$	186.6	$	166.8	$	151.0