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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SECURITIES AND EXCHANGE COMMISSION</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Washington, D.C. 20549</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM 8-K</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CURRENT REPORT</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Pursuant to Section 13 or 15(d) of the</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of Report: </FONT><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">August 1, 2011</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date of earliest event reported)</FONT></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PRINCIPAL FINANCIAL GROUP, INC.</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Exact name of registrant as specified in its charter)</FONT></TD></TR>
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     <TD style="TEXT-INDENT: 20px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Delaware</FONT></B>&nbsp;</TD>
     <TD style="TEXT-INDENT: 12px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1-16725</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 42-1520346</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 10px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (State or other jurisdiction</FONT>&nbsp;</TD>
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     <TD noWrap align=center><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of incorporation)</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp; Identification Number)</FONT>&nbsp;</TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">711 High Street, Des Moines, Iowa 50392</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Address of principal executive offices)</FONT></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">(515) 247-5111</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Registrant&#146;s telephone number, including area code)</FONT></TD></TR>
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     <TD colSpan=4 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">[&nbsp;&nbsp;&nbsp;&nbsp;]</FONT>&nbsp;</TD>
     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2.02. Results of Operations and Financial Condition</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On August 1, 2011, Principal Financial Group, Inc. publicly announced information regarding its</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">results of operations and financial condition for the quarter ended June 30, 2011. The text of the</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">announcement is included herewith as Exhibit 99.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9.01 Financial Statements and Exhibits</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">99 Second Quarter 2011 Earnings Release</FONT>&nbsp;</TD>
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     <TD colSpan=2 align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SIGNATURE</FONT></TD></TR>
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     <TD style="TEXT-INDENT: 10px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;<FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><U>___/s/ Terrance J. Lillis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT><U>&nbsp;</U></TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Terrance J. Lillis</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President and Chief Financial</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Officer</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: August 2, 2011</FONT>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXHIBIT 99</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Release:</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On receipt, August 1, 2011</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Media contact:</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Susan Houser, 515-248-2268, houser.susan@principal.com</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investor contact:</FONT></I>&nbsp;&nbsp;&nbsp;&nbsp; <I><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">John Egan, 515-235-9500, egan.john@principal.com</FONT></I>&nbsp;</TD></TR>
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     <TD colSpan=3 align=center><B><I><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Principal Financial Group, Inc. Announces Second Quarter 2011 Results</FONT></I></B></TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Second quarter 2011 operating earnings</FONT></B><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 </FONT></SUP><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">of $237 million, an increase of 25 percent over second</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">quarter 2010; net income available to common shareholders of $258 million, an increase of 93</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">percent over second quarter 2010.</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Year-to-date operating earnings of $469 million, an increase of 14 percent over the same period</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">in 2010; year-to-date net income available to common shareholders of $454 million, an increase</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">of 40 percent over the same period in 2010.</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Record assets under management of $335.8 billion at the end of second quarter 2011, an</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">increase of 18 percent compared to second quarter 2010.</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Des Moines, Iowa) &#150; Principal Financial Group, Inc. (NYSE: PFG) today announced results for second quarter</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2011. The company reported operating earnings of $237.3 million for second quarter 2011, compared to $190.4</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million for second quarter 2010. Operating earnings per diluted share (EPS) were $0.73 for second quarter</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2011, compared to $0.59 for second quarter 2010. The company reported net income available to common</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">stockholders of $258.0 million, or $0.80 per diluted share for second quarter 2011, compared to $134.0 million,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or $0.42 per diluted share for second quarter 2010. Operating revenues for second quarter 2011 were $2,149.0</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million compared to $1,976.2 million for the same period last year.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;The Principal</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">saw very positive results in the second quarter, contributing to a strong first half of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2011. We ended the quarter once again with record assets under management for the total company as well as</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in Principal International, and record account values in Retirement and Investor Services,&#148; said Larry D.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Zimpleman, chairman, president and chief executive officer of Principal Financial Group, Inc. &#147;Despite an</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">economic recovery that remains fragile, we continue to see strong growth and increasing earnings from our</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">businesses.&#148;</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Additionally, our strong financial position allows us to invest in our businesses for future growth</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and to also return capital to shareholders.&#148; said Zimpleman. &#147;Since the beginning of the year, we&#146;ve agreed to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">invest in future growth with the acquisitions of HSBC&#146;s Mexican mandatory retirement business and in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">majority stakes in two London-based asset managers: Finisterre Capital and Origin Asset Management. We</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">also returned capital to shareholders, completing our $250 million share repurchase authorization. We are</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">putting capital to work in ways that are accretive to earnings both in the short term and long term; are</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">meaningful to our strategy; and are beneficial to our shareholders. As our hybrid business model continues to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">generate increasing amounts of free cash flow, we are on track to surpass our $700 million estimate for capital</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">deployment on acquisitions and share repurchase in 2011 and we&#146;ll continue to work closely with our Board</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to be prudent in our deployment of excess capital.&#148;</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3>_______________________&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Use of non-GAAP financial measures is discussed in this release after Segment Highlights</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 4</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;Second quarter results demonstrate our strong operational leverage, with total company operating</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">earnings up 25 percent over the year ago quarter on a 15 percent increase in average assets under management,&#148;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">said Terry Lillis, senior vice president and chief financial officer. &#147;In addition, we saw the best quarter of net</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">income since before the financial crisis. On a year-to-date basis, net income is up 40 percent, or $130 million. Book</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value per share was another record this quarter and our excess capital position improved to $2.1 billion, even after</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">buying back 7.7 million shares in the quarter. These metrics demonstrate our financial strength and flexibility,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">which will serve us well through the rest of the year and into 2012.&#148;</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Key Highlights for the Second Quarter</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Strong sales in the company&#146;s three key U.S. Retirement and Investor Services products in the second</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter, with $1.7 billion for Full Service Accumulation, $2.6 billion for Principal Funds and $460</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million for Individual Annuities. In addition, Principal Global Investors was awarded $2.7 billion in new</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">mandates.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash flows of $1.8 billion for Principal International, $990 million for Full Service Accumulation, $530</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million for Principal Funds and $400 million for unaffiliated assets for Principal Global Investors.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Record total company assets under management of $335.8 billion, including a record $53.0 billion of assets</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">under management for Principal International.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Strong capital position with an estimated risk based capital ratio of 445 percent at quarter end and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately $2.1 billion of excess capital.</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Principal Financial Group bought back 7.7 million shares of common stock in the second quarter at an</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">average share price of $29.90. The remainder of the $250 million authorization was completed in the first</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">week of July, bringing the year-to-date total number of shares repurchased to 8.4 million.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Book value per share, excluding AOCI</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased to a record high of $29.20, up 7 percent over second</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter 2010.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Operating Return on Average Equity excluding AOCI of 10.1%.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Net Income</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income available to common stockholders of $258.0 million for second quarter 2011 reflects net realized</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital gains of $21.4 million, which include:</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$46.0 million of gains from the partial sale of our interest in an investment,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$28.4 million of losses related to credit gains and losses on sales and permanent impairments of fixed</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturity securities, including $23.1 million of losses on commercial mortgage backed securities, and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$2.8 million of losses on commercial mortgage whole loans.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><I><FONT size=2 face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment Highlights</FONT></I></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Retirement and Investor Services</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Segment operating earnings for second quarter 2011 were $161.3 million, compared to $129.0 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period in 2010. Full Service Accumulation earnings increased 22 percent from the year ago quarter</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to $83.0 million, reflecting an 18 percent increase in average account values. Principal Funds earnings increased</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">28 percent from a year ago to $13.2 million, primarily due to a 24 percent increase in average account values.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Individual Annuities earnings were $30.6 million compared to $22.6 million for second quarter 2010. The</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">positive variance reflects record account values. The accumulation businesses</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">had record account values of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$169.3 billion at June 30, 2011.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD colSpan=2>____________________&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">350 percent NAIC risk based capital ratio for the life company.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated Other Comprehensive Income</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Full Service Accumulation, Principal Funds, Individual Annuities and Bank and Trust Services</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 5</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues for second quarter 2011 were $1,044.1 million compared to $1,021.3 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period in 2010, primarily due to higher revenues for the accumulation businesses, which</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">improved $60.0 million, or 8 percent, from a year ago quarter. This was partially offset by a $35 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">decline in revenues in the Investment Only business.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment assets under management were $183.6 billion as of June 30, 2011, compared to $157.9</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of June 30, 2010.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Principal Global Investors</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings for second quarter 2011 were $20.8 million, compared to $12.3 million in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the prior year quarter, primarily due to an increase in assets under management and additional operating</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">leverage.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues for second quarter were $136.3 million, compared to $114.3 million for the same</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">period in 2010, primarily due to higher management and transaction fees.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unaffiliated assets under management were $79.5 billion as of June 30, 2011, compared to $71.2</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of June 30, 2010.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Principal International</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings were $37.5 million in second quarter 2011, compared to $35.0 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the prior year quarter. The improvement was primarily due to an increase in assets under management and a</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$1.7 million after-tax benefit from gains on the sale of bonds in our Brazilian joint venture. Second quarter 2010</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">results included two months of a higher economic interest in our Brazilian joint venture. Adjusting for the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">mentioned gains and the change in ownership, year over year earnings grew in line with the 38 percent growth</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in average assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues were $227.4 million for second quarter 2011, compared to $188.2 million for the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">same period in 2010, primarily due to growth in assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment assets under management were a record $53.0 billion as of June 30, 2011, up from $38.1</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of June 30, 2010. This includes a record $5.9 billion of net cash flows over the trailing twelve</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">months, or 15 percent of beginning of period assets under management. Reported assets under management</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">do not include an additional $7.2 billion of assets managed by our Chinese joint venture.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">U.S. Insurance Solutions</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings for second quarter 2011 were $49.5 million, compared to $50.0 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period in 2010. Specialty Benefits earnings were $25.9 million in second quarter 2011, up from</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$24.0 million for the same period in 2010, driven by membership growth and stable loss ratio results.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Individual Life earnings were $23.6 million in the second quarter, compared to $26.0 million in second</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter 2010. This reflects a $4 million shortfall for model and assumption changes and $3 million shortfall due to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">unfavorable mortality experience in second quarter 2011.We believe the run rate for Individual Life remains at $31 to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$33 million per quarter.</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 6</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating revenues for second quarter 2011 were $781.1 million compared to $687.3 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period a year ago, primarily due to significantly higher business owner and executive life</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">insurance sales and positive trends in both sales and lapses in Specialty Benefits.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Corporate</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating losses for second quarter 2011 were $31.8 million compared to operating losses of $35.9</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million in second quarter 2010.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Forward looking and cautionary statements</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This press release contains forward-looking statements, including, without limitation, statements as to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">operating earnings, net income available to common stockholders, net cash flows, realized and unrealized</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">expectations, goals and opinions. The company does not undertake to update these statements, which are</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future events and their effects on the company may not be those anticipated, and actual results may differ</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">materially from the results anticipated in these forward-looking statements. The risks, uncertainties and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors that could cause or contribute to such material differences are discussed in the company's annual report</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on Form 10-K for the year ended Dec. 31, 2010, and in the company&#146;s quarterly report on Form 10-Q for the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter ended March 31, 2011, filed by the company with the Securities and Exchange Commission, as</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">updated or supplemented from time to time in subsequent filings. These risks and uncertainties include,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">without limitation: adverse capital and credit market conditions may significantly affect the company&#146;s ability</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">markets and the economy generally; continued volatility or further declines in the equity markets; changes in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">interest rates or credit spreads; the company&#146;s investment portfolio is subject to several risks that may diminish</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the value of its invested assets and the investment returns credited to customers; the company&#146;s valuation of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">securities may include methodologies, estimations and assumptions that are subject to differing interpretations;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the determination of the amount of allowances and impairments taken on the company&#146;s investments requires</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be realized</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">or result in future impairments; competition from companies that may have greater financial resources, broader</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">arrays of products, higher ratings and stronger financial performance; a downgrade in the company&#146;s financial</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">strength or credit ratings; inability to attract and retain sales representatives and develop new distribution</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">sources; international business risks; the company&#146;s actual experience could differ significantly from its pricing</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and reserving assumptions; the company&#146;s ability to pay stockholder dividends and meet its obligations may be</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">pattern of amortizing the company&#146;s DPAC and other actuarial balances on its universal life-type insurance</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">contracts, participating life insurance policies and certain investment contracts may change; the company may</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">need to fund deficiencies in its &#147;Closed Block&#148; assets that support participating ordinary life insurance policies</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that had a dividend scale in force at the time of Principal Life&#146;s 1998 conversion into a stock life insurance</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">company; the company&#146;s reinsurers could default on their obligations or increase their rates; risks arising from</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">acquisitions of businesses; changes in laws, regulations or accounting standards; a computer system failure or</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">security breach could disrupt the company&#146;s business, and damage its reputation; results of litigation and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">material; fluctuations in foreign currency exchange rates; and applicable laws and the company&#146;s stockholder</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">rights plan, certificate of incorporation and by-laws may discourage takeovers and business combinations that</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">some stockholders might consider in their best interests.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Use of Non-GAAP Financial Measures</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The company uses a number of non-GAAP financial measures that management believes are useful to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">investors because they illustrate the performance of normal, ongoing operations, which is important in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">understanding and evaluating the company&#146;s financial condition and results of operations. They are not,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">however, a substitute for U.S. GAAP financial measures. Therefore, the company has provided</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure at the end</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 7</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"></FONT></TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of the release. The company adjusts U.S. GAAP measures for items not directly related to ongoing operations.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">However, it is possible these adjusting items have occurred in the past and could recur in the future reporting</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">periods. Management also uses non-GAAP measures for goal setting, as a basis for determining employee</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and senior management awards and compensation, and evaluating performance on a basis comparable to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">that used by investors and securities analysts.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings Conference Call</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On Tuesday, August 2, 2011 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Zimpleman and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">results, asset quality and capital adequacy during a live conference call, which can be accessed as follows:</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Via live Internet webcast. Please go to www.principal.com/investor at least 10-15 minutes prior to the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">start of the call to register, and to download and install any necessary audio software.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">callers) approximately 10 minutes prior to the start of the call. The access code is 79538107.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Replay of the earnings call via telephone is available by dialing 800-642-1687 (U.S. and Canadian</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">callers) or 706-645-9291 (International callers). The access code is 79538107. This replay will be</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available approximately two hours after the completion of the live earnings call through the end of day</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">August 9, 2011.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">www.principal.com/investor.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The company's financial supplement and additional investment portfolio detail for second quarter 2011 is</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">currently available at www.principal.com/investor, and may be referred to during the call.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">About the Principal Financial Group</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Principal Financial Group</FONT><SUP><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(The Principal </FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">)</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">is a leader in offering businesses, individuals and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">institutional clients a wide range of financial products and services, including retirement and investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">services, insurance, and banking through its diverse family of financial services companies. A member of the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fortune 500, the Principal Financial Group has $335.8 billion in assets under management</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and serves some</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.5 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">PFG. For more information, visit www.principal.com.</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">###</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif"></FONT></SUP></TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;The Principal Financial Group</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#148; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#147;The Principal&#148; are registered service marks of Principal Financial Services,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inc., a member of the Principal Financial Group.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of June 30, 2011</FONT>&nbsp;</TD></TR></TABLE></DIV>
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secondqtrer11.htm - Generated by SEC Publisher for SEC Filing
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:
August 1, 2011
(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))
_______________________
Page 2
Item 2.02. Results of Operations and Financial Condition
On August 1, 2011, Principal Financial Group, Inc. publicly announced information regarding its
results of operations and financial condition for the quarter ended June 30, 2011. The text of the
announcement is included herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
99 Second Quarter 2011 Earnings Release
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/ Terrance J. Lillis
Name:  Terrance J. Lillis
Title:     Senior Vice President and Chief Financial
Officer
Date: August 2, 2011
Page 3
EXHIBIT 99
Release:
On receipt, August 1, 2011
Media contact:
Susan Houser, 515-248-2268, houser.susan@principal.com
Investor contact:
John Egan, 515-235-9500, egan.john@principal.com
Principal Financial Group, Inc. Announces Second Quarter 2011 Results
•
Second quarter 2011 operating earnings
1
of $237 million, an increase of 25 percent over second
quarter 2010; net income available to common shareholders of $258 million, an increase of 93
percent over second quarter 2010.
•
Year-to-date operating earnings of $469 million, an increase of 14 percent over the same period
in 2010; year-to-date net income available to common shareholders of $454 million, an increase
of 40 percent over the same period in 2010.
•
Record assets under management of $335.8 billion at the end of second quarter 2011, an
increase of 18 percent compared to second quarter 2010.
(Des Moines, Iowa) – Principal Financial Group, Inc. (NYSE: PFG) today announced results for second quarter
2011. The company reported operating earnings of $237.3 million for second quarter 2011, compared to $190.4
million for second quarter 2010. Operating earnings per diluted share (EPS) were $0.73 for second quarter
2011, compared to $0.59 for second quarter 2010. The company reported net income available to common
stockholders of $258.0 million, or $0.80 per diluted share for second quarter 2011, compared to $134.0 million,
or $0.42 per diluted share for second quarter 2010. Operating revenues for second quarter 2011 were $2,149.0
million compared to $1,976.2 million for the same period last year.
"The Principal
®
saw very positive results in the second quarter, contributing to a strong first half of
2011. We ended the quarter once again with record assets under management for the total company as well as
in Principal International, and record account values in Retirement and Investor Services," said Larry D.
Zimpleman, chairman, president and chief executive officer of Principal Financial Group, Inc. "Despite an
economic recovery that remains fragile, we continue to see strong growth and increasing earnings from our
businesses."
"Additionally, our strong financial position allows us to invest in our businesses for future growth
and to also return capital to shareholders." said Zimpleman. "Since the beginning of the year, we've agreed to
invest in future growth with the acquisitions of HSBC's Mexican mandatory retirement business and in
majority stakes in two London-based asset managers: Finisterre Capital and Origin Asset Management. We
also returned capital to shareholders, completing our $250 million share repurchase authorization. We are
putting capital to work in ways that are accretive to earnings both in the short term and long term; are
meaningful to our strategy; and are beneficial to our shareholders. As our hybrid business model continues to
generate increasing amounts of free cash flow, we are on track to surpass our $700 million estimate for capital
deployment on acquisitions and share repurchase in 2011 and we'll continue to work closely with our Board
to be prudent in our deployment of excess capital."
_______________________
1
Use of non-GAAP financial measures is discussed in this release after Segment Highlights
Page 4
"Second quarter results demonstrate our strong operational leverage, with total company operating
earnings up 25 percent over the year ago quarter on a 15 percent increase in average assets under management,"
said Terry Lillis, senior vice president and chief financial officer. "In addition, we saw the best quarter of net
income since before the financial crisis. On a year-to-date basis, net income is up 40 percent, or $130 million. Book
value per share was another record this quarter and our excess capital position improved to $2.1 billion, even after
buying back 7.7 million shares in the quarter. These metrics demonstrate our financial strength and flexibility,
which will serve us well through the rest of the year and into 2012."
Key Highlights for the Second Quarter
•
Strong sales in the company's three key U.S. Retirement and Investor Services products in the second
quarter, with $1.7 billion for Full Service Accumulation, $2.6 billion for Principal Funds and $460
million for Individual Annuities. In addition, Principal Global Investors was awarded $2.7 billion in new
mandates.
•
Net cash flows of $1.8 billion for Principal International, $990 million for Full Service Accumulation, $530
million for Principal Funds and $400 million for unaffiliated assets for Principal Global Investors.
•
Record total company assets under management of $335.8 billion, including a record $53.0 billion of assets
under management for Principal International.
•
Strong capital position with an estimated risk based capital ratio of 445 percent at quarter end and
approximately $2.1 billion of excess capital.
2
•
Principal Financial Group bought back 7.7 million shares of common stock in the second quarter at an
average share price of $29.90. The remainder of the $250 million authorization was completed in the first
week of July, bringing the year-to-date total number of shares repurchased to 8.4 million.
•
Book value per share, excluding AOCI
3
increased to a record high of $29.20, up 7 percent over second
quarter 2010.
•
Operating Return on Average Equity excluding AOCI of 10.1%.
Net Income
Net income available to common stockholders of $258.0 million for second quarter 2011 reflects net realized
capital gains of $21.4 million, which include:
•
$46.0 million of gains from the partial sale of our interest in an investment,
•
$28.4 million of losses related to credit gains and losses on sales and permanent impairments of fixed
maturity securities, including $23.1 million of losses on commercial mortgage backed securities, and
•
$2.8 million of losses on commercial mortgage whole loans.
Segment Highlights
Retirement and Investor Services
Segment operating earnings for second quarter 2011 were $161.3 million, compared to $129.0 million
for the same period in 2010. Full Service Accumulation earnings increased 22 percent from the year ago quarter
to $83.0 million, reflecting an 18 percent increase in average account values. Principal Funds earnings increased
28 percent from a year ago to $13.2 million, primarily due to a 24 percent increase in average account values.
Individual Annuities earnings were $30.6 million compared to $22.6 million for second quarter 2010. The
positive variance reflects record account values. The accumulation businesses
4
had record account values of
$169.3 billion at June 30, 2011.
____________________
2
Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a
350 percent NAIC risk based capital ratio for the life company.
3
Accumulated Other Comprehensive Income
4
Full Service Accumulation, Principal Funds, Individual Annuities and Bank and Trust Services
Page 5
Operating revenues for second quarter 2011 were $1,044.1 million compared to $1,021.3 million
for the same period in 2010, primarily due to higher revenues for the accumulation businesses, which
improved $60.0 million, or 8 percent, from a year ago quarter. This was partially offset by a $35 million
decline in revenues in the Investment Only business.
Segment assets under management were $183.6 billion as of June 30, 2011, compared to $157.9
billion as of June 30, 2010.
Principal Global Investors
Segment operating earnings for second quarter 2011 were $20.8 million, compared to $12.3 million in
the prior year quarter, primarily due to an increase in assets under management and additional operating
leverage.
Operating revenues for second quarter were $136.3 million, compared to $114.3 million for the same
period in 2010, primarily due to higher management and transaction fees.
Unaffiliated assets under management were $79.5 billion as of June 30, 2011, compared to $71.2
billion as of June 30, 2010.
Principal International
Segment operating earnings were $37.5 million in second quarter 2011, compared to $35.0 million
in the prior year quarter. The improvement was primarily due to an increase in assets under management and a
$1.7 million after-tax benefit from gains on the sale of bonds in our Brazilian joint venture. Second quarter 2010
results included two months of a higher economic interest in our Brazilian joint venture. Adjusting for the
mentioned gains and the change in ownership, year over year earnings grew in line with the 38 percent growth
in average assets under management.
Operating revenues were $227.4 million for second quarter 2011, compared to $188.2 million for the
same period in 2010, primarily due to growth in assets under management.
Segment assets under management were a record $53.0 billion as of June 30, 2011, up from $38.1
billion as of June 30, 2010. This includes a record $5.9 billion of net cash flows over the trailing twelve
months, or 15 percent of beginning of period assets under management. Reported assets under management
do not include an additional $7.2 billion of assets managed by our Chinese joint venture.
U.S. Insurance Solutions
Segment operating earnings for second quarter 2011 were $49.5 million, compared to $50.0 million
for the same period in 2010. Specialty Benefits earnings were $25.9 million in second quarter 2011, up from
$24.0 million for the same period in 2010, driven by membership growth and stable loss ratio results.
Individual Life earnings were $23.6 million in the second quarter, compared to $26.0 million in second
quarter 2010. This reflects a $4 million shortfall for model and assumption changes and $3 million shortfall due to
unfavorable mortality experience in second quarter 2011.We believe the run rate for Individual Life remains at $31 to
$33 million per quarter.
Page 6
Segment operating revenues for second quarter 2011 were $781.1 million compared to $687.3 million
for the same period a year ago, primarily due to significantly higher business owner and executive life
insurance sales and positive trends in both sales and lapses in Specialty Benefits.
Corporate
Operating losses for second quarter 2011 were $31.8 million compared to operating losses of $35.9
million in second quarter 2010.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to
operating earnings, net income available to common stockholders, net cash flows, realized and unrealized
gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs,
expectations, goals and opinions. The company does not undertake to update these statements, which are
based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate.
Future events and their effects on the company may not be those anticipated, and actual results may differ
materially from the results anticipated in these forward-looking statements. The risks, uncertainties and
factors that could cause or contribute to such material differences are discussed in the company's annual report
on Form 10-K for the year ended Dec. 31, 2010, and in the company's quarterly report on Form 10-Q for the
quarter ended March 31, 2011, filed by the company with the Securities and Exchange Commission, as
updated or supplemented from time to time in subsequent filings. These risks and uncertainties include,
without limitation: adverse capital and credit market conditions may significantly affect the company's ability
to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital
markets and the economy generally; continued volatility or further declines in the equity markets; changes in
interest rates or credit spreads; the company's investment portfolio is subject to several risks that may diminish
the value of its invested assets and the investment returns credited to customers; the company's valuation of
securities may include methodologies, estimations and assumptions that are subject to differing interpretations;
the determination of the amount of allowances and impairments taken on the company's investments requires
estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be realized
or result in future impairments; competition from companies that may have greater financial resources, broader
arrays of products, higher ratings and stronger financial performance; a downgrade in the company's financial
strength or credit ratings; inability to attract and retain sales representatives and develop new distribution
sources; international business risks; the company's actual experience could differ significantly from its pricing
and reserving assumptions; the company's ability to pay stockholder dividends and meet its obligations may be
constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the
pattern of amortizing the company's DPAC and other actuarial balances on its universal life-type insurance
contracts, participating life insurance policies and certain investment contracts may change; the company may
need to fund deficiencies in its "Closed Block" assets that support participating ordinary life insurance policies
that had a dividend scale in force at the time of Principal Life's 1998 conversion into a stock life insurance
company; the company's reinsurers could default on their obligations or increase their rates; risks arising from
acquisitions of businesses; changes in laws, regulations or accounting standards; a computer system failure or
security breach could disrupt the company's business, and damage its reputation; results of litigation and
regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or
similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be
material; fluctuations in foreign currency exchange rates; and applicable laws and the company's stockholder
rights plan, certificate of incorporation and by-laws may discourage takeovers and business combinations that
some stockholders might consider in their best interests.
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
Page 7
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 the 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.
Earnings Conference Call
On Tuesday, August 2, 2011 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry
Zimpleman and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of
results, asset quality and capital adequacy during a live conference call, which can be accessed as follows:
•
Via live Internet webcast. Please go to www.principal.com/investor at least 10-15 minutes prior to the
start of the call to register, and to download and install any necessary audio software.
•
Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International
callers) approximately 10 minutes prior to the start of the call. The access code is 79538107.
•
Replay of the earnings call via telephone is available by dialing 800-642-1687 (U.S. and Canadian
callers) or 706-645-9291 (International callers). The access code is 79538107. This replay will be
available approximately two hours after the completion of the live earnings call through the end of day
August 9, 2011.
•
Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:
www.principal.com/investor.
The company's financial supplement and additional investment portfolio detail for second quarter 2011 is
currently available at www.principal.com/investor, and may be referred to during the call.
About the Principal Financial Group
The Principal Financial Group
®
(The Principal
®
)
5
is a leader in offering businesses, individuals and
institutional clients a wide range of financial products and services, including retirement and investment
services, insurance, and banking through its diverse family of financial services companies. A member of the
Fortune 500, the Principal Financial Group has $335.8 billion in assets under management
6
and serves some
16.5 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United
States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol
PFG. For more information, visit www.principal.com.
###
5
"The Principal Financial Group
"
and "The Principal" are registered service marks of Principal Financial Services,
Inc., a member of the Principal Financial Group.
6
As of June 30, 2011