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: FEBRUARY 4, 2008
                        (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>



ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On  February  4,  2008,  Principal  Financial  Group,  Inc.  publicly  announced
information  regarding its results of operations and financial condition for the
quarter  ended  December  31,  2007.  The text of the  announcement  is included
herewith as Exhibit 99.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99    Fourth Quarter 2007 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/ MICHAEL H. GERSIE
                                           ------------------------------------
                                    Name:  Michael H. Gersie
                                    Title: Executive Vice President and Chief
                                           Financial Officer

Date:    February 5, 2008


                                       2
<PAGE>

                                                                     EXHIBIT 99

RELEASE: On receipt
MEDIA CONTACT:               Jeff Rader, 515-247-7883, RADER.JEFF@PRINCIPAL.COM
INVESTOR RELATIONS CONTACT:  Tom Graf, 515-235-9500,
                             investor-relations@principal.com


     PRINCIPAL  FINANCIAL GROUP,  INC. REPORTS FOURTH QUARTER 2007 AND FULL YEAR
     RESULTS

     Des Moines, IA (February 4, 2008) - Principal  Financial Group, Inc. (NYSE:
     PFG) today announced net income  available to common  stockholders of $34.1
     million(1),  or $0.13 per diluted share for the three months ended December
     31, 2007,  compared to $284.1  million,  or $1.04 per diluted share for the
     three  months  ended  December 31,  2006.  The company  reported  operating
     earnings of $225.8  million  for fourth  quarter  2007,  compared to $252.0
     million for fourth quarter 2006. Operating earnings per diluted share (EPS)
     for fourth quarter 2007 were $0.86 compared to $0.93 for the same period in
     2006.  Operating  revenues for fourth  quarter 2007 were  $2,901.8  million
     compared to $2,537.0 million for the same period last year.(2)
              Principal  Financial Group, Inc. also announced full year results.
     The company reported net income available to common  stockholders of $827.3
     million,  or $3.09 per diluted share for the twelve  months ended  December
     31, 2007,  compared to $1,031.3 million, or $3.74 per diluted share for the
     twelve  months  ended  December  31,  2006.  The  company  reported  record
     operating earnings of $1,058.4 million for 2007, compared to $972.1 million
     for  2006.  EPS for 2007 was a record  $3.95  compared  to $3.53  for 2006.
     Operating  revenues for 2007 were a record  $11,249.8  million  compared to
     $9,825.8 million for 2006.
              "In a year marked by adverse credit conditions and volatile equity
     markets,  The  Principal  delivered a strong  operating  result - 9 percent
     growth in earnings  and 12 percent  EPS  growth,"  said J. Barry  Griswell,
     chairman and chief executive officer. "Excluding the health division, which
     had a difficult year, total company earnings improved 15 percent."
              "In 2007, our three key growth engines - U.S. Asset  Accumulation,
     Principal  Global  Investors  and  Principal  International  - continued to
     demonstrate  strong  fundamentals,"  said  Griswell.  "Total company assets
     under  management  (AUM)  increased $54 billion,  or 21 percent,  including
     nearly  $20  billion  of net  cash  flows,  and  each  of our  three  asset
     management and accumulation  segments delivered record earnings,  improving
     $111 million or 15 percent for the year on a combined basis(3)."
              "The continued  strength of these segments was also evident in the
     fourth quarter," said Griswell.  "Our key asset management and accumulation
     businesses  again  delivered some  outstanding  results,  performance  that
     supports our outlook for continued strong long-term growth."


                                       3
<PAGE>

              Added Larry  Zimpleman,  president  and chief  operating  officer,
     "Sales of our three key retirement and investment  offerings - Full Service
     Accumulation,  Principal Funds and Individual Annuities - were $5.6 billion
     in total in the  fourth  quarter  and $21.7  billion  for the  year,  up 63
     percent and 61 percent respectively over the prior year periods.  Principal
     Global  Investors' fee mandate business  earnings  improved 20 percent from
     the year ago  quarter  and 44 percent  for the year,  reflecting  continued
     strong growth in third party AUM, which  increased 24 percent on an organic
     basis. And Principal  International's  earnings  improved 70 percent from a
     year ago, a tremendous  finish to a breakout  year that included 54 percent
     growth  in  earnings,  50  percent  growth  in AUM,  32  percent  growth in
     operating revenues and a 290 basis point improvement in return on equity."
              "While  earnings  for  the  health  division  fell  short  of  our
     expectations  in the fourth quarter,  earnings in our asset  management and
     accumulation  businesses  remained  solid,  particularly in light of spread
     widening in the  commercial  mortgage  securitization  market and declining
     equity  markets,  which  included a 3.8 percent drop in the S&P 500 Index,"
     said   Zimpleman.   "While  we  can't  control  equity  and  credit  market
     conditions,  we continue to intensify our turnaround  efforts in the health
     business,   focusing  on  network  discounts,   claims  costs  and  expense
     management."

     Additional highlights include:

     o    Record  annual  operating  revenues  in all four  operating  segments,
          driving a $1.4 billion or 14 percent increase for 2007.
     o    Continued  strong  organic sales of the company's key  retirement  and
          investment  products.  For 2007: full service  accumulation sales were
          $9.5  billion,  an  increase of 31 percent  (sales of $2.4  billion in
          fourth  quarter  2007);  mutual funds sales were $8.8 billion,  up 130
          percent (sales of $2.1 billion in fourth quarter 2007); and individual
          annuities  sales  were  $3.5  billion,  up 40  percent  (sales of $1.2
          billion in fourth quarter 2007).
     o    Return on equity  improved  110 basis  points,  from 15.3  percent  at
          December 31, 2006 to 16.4 percent at December 31, 2007.

     "Looking  forward,  our 2008  results will clearly be impacted by difficult
     market  conditions - continued  uncertainty  around the economy,  continued
     adverse  credit   conditions,   and  continued  equity  market  volatility,
     including  a 6  percent  decline  in the  S&P 500  Index  in the  month  of
     January," said Zimpleman. "That said we expect market conditions to improve
     over time,  and we remain  committed  to and  confident  we can achieve our
     longer-term performance objectives - 11 to 13 percent average annual growth
     in EPS, and roughly 50 basis points average annual improvement in operating
     ROE."

     NET INCOME Net income  available to common  stockholders  of $34.1  million
     reflects net  realized/unrealized  capital losses of $211.5 million,  which
     includes: $134.8 million of losses related to impairments of fixed maturity
     securities (including $49.4 million related to subprime);  $33.5 million of
     impairments  on  equity  securities;  unrealized  capital  losses  of $26.3
     million,  primarily  from the mark to market of  interest  rate and  credit
     default  swaps;  and $21.3 million of realized  capital  losses  related to
     derivative  positions  (including  $7.9 million  related to subprime).  Net
     income also includes a $19.8 million gain from other after-tax adjustments,
     primarily  related  to a gain on sale of real  estate.  Between  the  fixed
     maturity and equity security  impairments,  $84.8 million of losses relates
     to certain structured assets. The company believes the fundamental  outlook
     for these assets  remains strong and that values will  ultimately  recover.
     With market illiquidity  reducing fair values, at year-end the company also
     conservatively valued its collateralized debt obligations,  which generated
     the $49.4 million of losses, identified above. The company believes current


                                       4
<PAGE>

     fair value is significantly  below the value it will ultimately  recover on
     these assets.

                               SEGMENT HIGHLIGHTS

     U.S. ASSET ACCUMULATION
              Segment  operating  earnings  for fourth  quarter 2007 were $149.9
     million,  compared to $146.6 million for the same period in 2006.  Earnings
     growth from higher account values was dampened by: a $16.5 million  pre-tax
     increase  over the same  period a year ago in deferred  policy  acquisition
     cost  amortization  expense  between  the  Full  Service  Accumulation  and
     Individual  Annuities  businesses,  primarily  due to  experience  true-ups
     related to equity  market  declines in fourth  quarter  2007 as compared to
     equity market gains in fourth quarter 2006.
              Operating  revenues for the fourth  quarter  increased to $1,300.3
     million compared to $1,085.3 million for the same period in 2006, primarily
     due to  solid  growth  in the  Principal  Funds  and  Individual  Annuities
     businesses.
              Segment assets under management were a record $178.1 billion as of
     December 31, 2007, compared to $161.9 billion as of December 31, 2006.

     GLOBAL ASSET MANAGEMENT
              Segment  operating  earnings  for fourth  quarter  2007 were $27.4
     million,  compared  to $32.1  million in the prior year  quarter.  Earnings
     growth from the fee mandate business,  which increased $4.8 million,  or 20
     percent compared to fourth quarter 2006, was more than offset by the impact
     on the spread and  securitization  business from unfavorable  conditions in
     the commercial mortgage-backed securities ("CMBS") market.
              Operating revenues for fourth quarter increased to a record $174.1
     million compared to $149.5 million for the same period in 2006, as a result
     of higher management fees across all lines of business.
              Third party assets under  management for the segment were a record
     $87.4  billion as of December  31,  2007,  compared to $59.2  billion as of
     December 31, 2006.

     INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION
              Segment  operating  earnings  for fourth  quarter  2007 were $25.4
     million,  compared to $14.9 million for the same period in 2006, reflecting
     solid  earnings  growth in Brazil,  Hong  Kong,  Chile,  and China.  Fourth
     quarter 2007 earnings  also included a $5.6 million tax charge,  due to new
     tax  regulations in Mexico,  partially  offset by a $3.8 million  after-tax
     benefit from higher  yields on invested  assets in Chile,  due to unusually
     high inflation.
              Operating revenues were a record $255.4 million for fourth quarter
     2007,  compared  to $128.6  million  for the same  period  last  year.  The
     increase was primarily  the result of higher yields on invested  assets and
     increased sales of single premium group annuities in Chile.
              Segment assets under  management were a record $28.7 billion as of
     December 31, 2007, compared to $19.1 billion as of December 31, 2006.

                                       5
<PAGE>

     LIFE AND HEALTH INSURANCE
              Segment  operating  earnings  for fourth  quarter  2007 were $42.1
     million,  compared to $64.9 million for the same period in 2006.  Specialty
     Benefits  division  earnings  increased  $4.1  million  to  $25.5  million,
     reflecting  growth  in  the  business  and  effective  expense  management.
     Individual Life earnings were $26.0 million,  compared to $30.4 million for
     the  same  period  in 2006.  Adjusting  fourth  quarter  2006  results  for
     investment earnings on a higher capital base and lower than normal deferred
     policy  acquisition  cost  amortization  expense,  Individual Life earnings
     improved  modestly from a year ago. The Health  division had a loss of $9.4
     million in fourth  quarter 2007,  reflecting  claim  seasonality  in higher
     deductible health plans, as well as adverse claims experience overall. This
     compared to earnings of $13.1 million in fourth  quarter 2006, or losses of
     $1.9 million after  adjusting  fourth  quarter 2006 for the  development of
     year-end 2006 claims, as previously communicated.

              Operating revenues were a record $1,221.6 million,  an increase of
     one percent from the same period in 2006.  Specialty  Benefits continued to
     achieve strong growth,  with revenues improving 11 percent from a year ago.
     Individual Life revenues  increased 3 percent,  reflecting  solid growth in
     fee-based  universal  life and variable  universal  life  products.  Health
     revenues decreased seven percent, primarily due to a 12 percent decrease in
     insured medical covered members.

     CORPORATE AND OTHER
              Operating losses for the segment in fourth quarter 2007 were $19.0
     million,  compared to operating  losses of $6.5 million for the same period
     in  2006.  Although  many  items  contributed  to the  variance,  the  main
     contributors were lower earnings on reduced invested capital in the segment
     and higher interest  expense,  due in part to the company's  fourth quarter
     2006 issuance of long-term debt.

     FORWARD LOOKING AND CAUTIONARY STATEMENTS
     This press release contains forward-looking statements,  including, without
     limitation,  statements as to sales targets, 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
     December 31, 2006, and in the company's  quarterly  report on Form 10-Q for
     the  quarter  ended  September  30,  2007,  filed by the  company  with the
     Securities and Exchange Commission.  These risks and uncertainties include,
     without limitation:  competitive factors;  volatility of financial markets;
     decrease in ratings; interest rate changes; inability to attract and retain
     sales  representatives;  international  business  risks;  foreign  currency
     exchange  rate  fluctuations;   a  pandemic,   terrorist  attack  or  other
     catastrophic event;  default of the company's  re-insurers;  and investment
     portfolio risks.

                                       6
<PAGE>


     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 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.  Management
     also uses  non-GAAP  measures for goal  setting,  determining  employee and
     senior management awards and compensation,  and evaluating performance on a
     basis comparable to that used by investors and securities analysts.

     SHARE REPURCHASES
     In  October  2007,  the  company  repurchased  1.1  million  shares for $70
     million,  which completed the Board's May 2007  authorization of up to $250
     million.   In  November  2007,   following  the  Board's  share  repurchase
     authorization  of  up  to  $500  million,   the  company  entered  into  an
     accelerated  common stock  repurchase  agreement  with an investment  bank.
     Under this  agreement,  the  company  paid $250  million and  received  the
     initial  delivery  of  approximately  2.9  million  common  shares,   while
     retaining the right to receive  additional  common shares  depending on the
     volume weighted  average share price of the company's common stock over the
     program's  execution  period.  The  accelerated  agreement was completed in
     January 2008, at which time the company received  approximately 0.9 million
     additional shares.

     EARNINGS CONFERENCE CALL
     At 9:00 A.M. (CDT) tomorrow, Chairman and CEO J. Barry Griswell,  President
     and COO Larry  Zimpleman,  and Executive Vice President and CFO Mike Gersie
     will lead a discussion during a live conference call. Parties interested in
     listening  to the  conference  call  live may  access  the  webcast  on the
     company's Investor Relations (IR) website  (www.principal.com/investor)  or
     by dialing (800) 374-1609 (U.S.  callers) or (706) 643-7701  (International
     callers) approximately 10 minutes prior to the start of the call. To access
     the call, leader name is Tom Graf.  Listeners can access an audio replay of
     the call on the IR website,  or by calling  (800)  642-1687 (US callers) or
     (706) 645-9291  (International  callers). The access code for the replay is
     28483992.  Replays  will  be  available  through  February  12,  2008.  The
     financial  supplement  is  currently  available  on our  website and may be
     referred to during the conference call.


     ABOUT THE PRINCIPAL FINANCIAL GROUP
     The  Principal  Financial  Group(R) (The  Principal  (R))(4) is a leader in
     offering businesses,  individuals and institutional clients a wide range of
     financial  products  and  services,  including  retirement  and  investment
     services, life and health insurance, and banking through its diverse family
     of financial services companies. A member of the Fortune 500, the Principal
     Financial Group has $311.1 billion in assets under management(5) and serves
     some 18.6 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.

                                       ###


                                       7
<PAGE>

<TABLE>
<CAPTION>

SUMMARY OF SEGMENT AND PRINCIPAL FINANCIAL GROUP, INC. RESULTS

                                                                 OPERATING EARNINGS (LOSS)* IN MILLIONS
                                                     -------------------------------------------------------------
                                                            THREE MONTHS ENDED,           TWELVE MONTHS ENDED,
                                                     -------------------------------------------------------------
<S>                                                         <C>             <C>          <C>           <C>
                                           SEGMENT         12/31/07       12/31/06       12/31/07        12/31/06
---------------------------------------------------- ---------------- -------------- -------------- --------------
                            U.S. ASSET ACCUMULATION         $ 149.9         $146.6       $  655.8      $  542.6
---------------------------------------------------- ---------------- -------------- -------------- --------------
                            GLOBAL ASSET MANAGEMENT            27.4           32.1          108.5         102.5
---------------------------------------------------- ---------------- -------------- -------------- --------------
    INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION            25.4           14.9          110.7          71.8
---------------------------------------------------- ---------------- -------------- -------------- --------------
                          LIFE AND HEALTH INSURANCE            42.1           64.9          221.1         282.5
---------------------------------------------------- ---------------- -------------- -------------- --------------
                                CORPORATE AND OTHER          (19.0)           (6.5)         (37.7)        (27.3)
---------------------------------------------------- ---------------- -------------- -------------- --------------
                                 OPERATING EARNINGS           225.8          252.0        1,058.4         972.1
---------------------------------------------------- ---------------- -------------- -------------- --------------
                    NET REALIZED/UNREALIZED CAPITAL
                        GAINS (LOSSES), AS ADJUSTED          (211.5)           9.7         (229.7)         18.0
---------------------------------------------------- ---------------- -------------- -------------- --------------
                        OTHER AFTER-TAX ADJUSTMENTS            19.8           22.4           (1.4)         41.2
---------------------------------------------------- ---------------- -------------- -------------- --------------
        NET INCOME AVAILABLE TO COMMON STOCKHOLDERS         $  34.1         $284.1       $  827.3      $1,031.3
---------------------------------------------------- ---------------- -------------- -------------- --------------

                                                                          PER DILUTED SHARE
                                                     -------------------------------------------------------------
                                                            THREE MONTHS ENDED,           TWELVE MONTHS ENDED,
                                                     -------------------------------------------------------------
                                                           12/31/07       12/31/06       12/31/07        12/31/06
                                                     ---------------- -------------- -------------- --------------
                                 OPERATING EARNINGS         $   0.86        $  0.93      $    3.95     $    3.53
---------------------------------------------------- ---------------- -------------- -------------- --------------
                    NET REALIZED/UNREALIZED CAPITAL            (0.81)          0.04          (0.85)         0.07
                        GAINS (LOSSES), AS ADJUSTED
---------------------------------------------------- ---------------- -------------- -------------- --------------
                        OTHER AFTER-TAX ADJUSTMENTS             0.08           0.07          (0.01)         0.14
---------------------------------------------------- ---------------- -------------- -------------- --------------
        NET INCOME AVAILABLE TO COMMON STOCKHOLDERS         $   0.13        $  1.04      $    3.09     $    3.74
---------------------------------------------------- ---------------- -------------- -------------- --------------
 WEIGHTED-AVERAGE DILUTED COMMON SHARES OUTSTANDING           263.9          272.1          268.1         275.5
---------------------------------------------------- ---------------- -------------- -------------- --------------

</TABLE>






*OPERATING  EARNINGS  VERSUS  U.S.  GAAP (GAAP) NET INCOME  AVAILABLE  TO COMMON
STOCKHOLDERS  Management uses operating  earnings,  which excludes the effect of
net  realized/unrealized  capital  gains  and  losses,  as  adjusted,  and other
after-tax adjustments, for goal setting, determining employee compensation,  and
evaluating  performance  on a basis  comparable  to that used by  investors  and
securities analysts. Segment operating earnings are determined by adjusting U.S.
GAAP net income  available to common  stockholders  for net  realized/unrealized
capital  gains and losses,  as adjusted,  and other  after-tax  adjustments  the
company believes are not indicative of overall operating trends. Note: after-tax
adjustments  have  occurred  in the past and  could  recur in  future  reporting
periods.  While these items may be significant  components in understanding  and
assessing  our  consolidated  financial  performance,  management  believes  the
presentation of segment  operating  earnings  enhances the  understanding of our
results of  operations  by  highlighting  earnings  attributable  to the normal,
ongoing operations of the company's businesses.


                                       8
<PAGE>
<TABLE>
<CAPTION>


                         PRINCIPAL FINANCIAL GROUP, INC.
                              RESULTS OF OPERATIONS
                                  (IN MILLIONS)

                                                         THREE MONTHS ENDED              TWELVE MONTHS ENDED
                                                 ------------------------------- ---------------------------------
                                                        12/31/07       12/31/06        12/31/07        12/31/06
                                                 ---------------- --------------- --------------- ----------------
   <S>                                                  <C>             <C>           <C>             <C>
   Premiums and other considerations                    $1,178.1        $1,098.9      $  4,634.1      $  4,305.3
   Fees and other revenues                                 680.8           515.0         2,634.7         1,902.5
   Net investment income                                 1,037.7           924.1         3,966.5         3,620.6
   Net realized/unrealized capital gains
   (losses)                                               (332.5)           21.6          (328.8)           44.7
                                                 ---------------- --------------- --------------- ----------------
   TOTAL REVENUES                                        2,564.1         2,559.6        10,906.5         9,873.1
                                                 ---------------- --------------- --------------- ----------------
   Benefits, claims, and settlement expenses             1,709.4         1,464.8         6,435.3         5,692.4
   Dividends to policyholders                               71.9            73.3           293.8           290.7
   Operating expenses                                      813.2           692.9         3,129.2         2,558.7
                                                 ---------------- --------------- --------------- ----------------
   TOTAL EXPENSES                                        2,594.5         2,231.0         9,858.3         8,541.8
                                                 ---------------- --------------- --------------- ----------------
   Income (loss) from continuing operations
        before income taxes                                (30.4)          328.6         1,048.2         1,331.3
   Income taxes (benefit)                                  (52.2)           66.2           208.1           295.9
                                                 ---------------- --------------- --------------- ----------------
   Income from continuing operations, net of
        related income taxes                                21.8           262.4           840.1         1,035.4
   Income from discontinued operations, net of
        related taxes                                       20.6            30.0           20.2             28.9
                                                 ---------------- --------------- --------------- ----------------
   NET INCOME                                               42.4           292.4           860.3         1,064.3
   Preferred stock dividends                                 8.3             8.3            33.0            33.0
                                                 ---------------- --------------- --------------- ----------------
   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS          $   34.1        $  284.1      $    827.3      $  1,031.3
   Less:
   Net realized/unrealized capital gains
        (losses), as adjusted                             (211.5)            9.7          (229.7)           18.0
   Other after-tax adjustments                              19.8            22.4            (1.4)           41.2
                                                 ---------------- --------------- --------------- ----------------
   OPERATING EARNINGS                                   $  225.8        $  252.0      $  1,058.4      $    972.1
                                                 ================ =============== =============== ================

                                                   SELECTED BALANCE SHEET STATISTICS

                                                                            PERIOD ENDED
                                                     ------------------------------------------------------------
                                                          12/31/07              12/31/06            12/31/05
                                                     -------------------- --------------------- -----------------
  Total assets (in billions)                            $  154.5                 $   143.7         $   127.0
  Total common equity (in millions)                     $6,879.7                 $ 7,318.8         $ 7,265.2
  Total common equity excluding accumulated other
       comprehensive income (in millions)               $6,459.5                 $ 6,471.9         $ 6,270.4
  End of period common shares outstanding
       (in millions)                                       259.1                     268.4             280.6
  Book value per common share                           $   26.55                $    27.27        $    25.89
  Book value per common share excluding
      accumulated other comprehensive income            $   24.93                $    24.11        $    22.35

</TABLE>


                                       9
<PAGE>

<TABLE>
<CAPTION>

                         PRINCIPAL FINANCIAL GROUP, INC.
           RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO U.S. GAAP
                       (IN MILLIONS, EXCEPT AS INDICATED)

                                                               THREE MONTHS ENDED              TWELVE MONTHS ENDED
                                                         ------------------------------------------------------------------
                                                               12/31/07        12/31/06        12/31/07         12/31/06
                                                         ----------------- --------------- --------------- ----------------
<S>                                                                <C>             <C>              <C>             <C>
DILUTED EARNINGS PER COMMON SHARE:
Operating Earnings                                                 0.86            0.93             3.95            3.53
Net realized/unrealized capital gains (losses)                    (0.81)           0.04            (0.85)           0.07
Other after-tax adjustments                                        0.08            0.07            (0.01)           0.14
                                                         ----------------- --------------- --------------- ----------------
Net income available to common stockholders                        0.13            1.04             3.09            3.74
                                                         ================= =============== =============== ================

BOOK VALUE PER COMMON SHARE EXCLUDING ACCUMULATED
OTHER COMPREHENSIVE INCOME:
Book value per common share excluding accumulated
     other comprehensive income                                   24.93           24.11            24.93           24.11
Net unrealized capital gains                                       1.22            3.21             1.22            3.21
Foreign currency translation                                       0.14           (0.10)            0.14           (0.10)
Net unrecognized post-retirement benefit obligations               0.26            0.05             0.26            0.05
                                                         ----------------- --------------- --------------- ----------------
Book value per common share including accumulated
     other comprehensive income                                   26.55           27.27            26.55           27.27
                                                         ================= =============== =============== ================
OPERATING REVENUES:
USAA                                                           1,300.3         1,085.3          5,150.2         4,107.0
GAM                                                              174.1           149.5            603.0           488.1
IAMA                                                             255.4           128.6            796.3           605.4
Life and Health                                                1,221.6         1,210.1          4,857.1         4,736.2
Corporate and Other                                              (49.6)          (36.5)          (156.8)         (110.9)
                                                         ----------------- --------------- --------------- ----------------
Total operating revenues                                       2,901.8         2,537.0         11,249.8         9,825.8
Add:  Net realized/unrealized capital gains (losses)
     and related fee adjustments                                (337.0)           20.6           (343.0)           44.2
Less:  Operating revenues from discontinued real estate            0.7            (2.0)             0.3            (3.1)
Total GAAP revenues                                      ----------------  ---------------  -------------- ----------------
                                                               2,564.1         2,559.6         10,906.5         9,873.1
                                                         ================= =============== =============== ================
OPERATING EARNINGS:
USAA                                                             149.9           146.6            655.8           542.6
GAM                                                               27.4            32.1            108.5           102.5
IAMA                                                              25.4            14.9            110.7            71.8
Life and Health                                                   42.1            64.9            221.1           282.5
Corporate and Other                                              (19.0)           (6.5)           (37.7)          (27.3)
                                                         ----------------- --------------- --------------- ----------------
Total operating earnings                                         225.8           252.0          1,058.4           972.1
Net realized/unrealized capital gains (losses)                  (211.5)            9.7           (229.7)           18.0
Other after-tax adjustments                                       19.8            22.4             (1.4)           41.2
Net income available to common stockholders              ----------------- ---------------  -------------- ----------------
                                                                  34.1           284.1            827.3         1,031.3
                                                         ================= =============== =============== ================

NET REALIZED/UNREALIZED CAPITAL GAINS (LOSSES):
Net realized/unrealized capital gains (losses), as
adjusted                                                        (211.5)            9.7           (229.7)           18.0
Add:
Periodic settlements and accruals on non-hedge
derivatives                                                        4.0             -               18.9              -
Amortization of DPAC and sale inducement costs                   (15.3)           (1.5)           (10.4)           (5.4)
Capital gains distributed                                          3.3             6.0             11.0            11.8
Tax impacts                                                     (118.4)            3.5           (125.5)           12.1
Minority interest capital gains                                    4.9             2.9             11.6             7.7
Less related fee adjustments:
Unearned front-end fee income                                       -             (0.8)             8.7             0.8
Certain market value adjustments to fee revenues                  (0.5)           (0.2)            (4.0)           (1.3)
                                                         ---------------   --------------- --------------- ----------------
GAAP net realized/unrealized capital gains (losses)             (332.5)           21.6           (328.8)           44.7
                                                         ===============   =============== =============== ================

OTHER AFTER TAX ADJUSTMENTS:
Gain on disposal of discontinued real estate
    investments                                                   20.0            30.9             20.0            30.9
Tax refinements related to prior years                            (0.2)            -              (21.4)            -
Contribution to foundation                                         -              (8.5)             -              (8.5)
IRS audit Issue                                                    -               -                -              18.8
                                                         ---------------   --------------- --------------- ----------------
Total other after-tax adjustments                                 19.8            22.4             (1.4)           41.2
                                                         ===============   =============== =============== ================

</TABLE>

                                       10
<PAGE>


(1)  Fourth  quarter 2007 net income  discussed in this release  before  Segment
     Highlights.
(2)  Use of non-GAAP  financial  measures is  discussed  in this  release  after
     Segment Highlights.
(3)  The  increase  was $158  million or 22 percent  on a reported  basis,  $111
     million or 15 percent  excluding  $28 million of net  benefiting  items for
     Full Service  Accumulation in 2007, and $19 million of net benefiting items
     for Principal International.
(4)  "The Principal  Financial Group" and "The Principal" are registered service
     marks of Principal  Financial  Services,  Inc.,  a member of the  Principal
     Financial Group.
(5)  As of December 31, 2007


                                       11
<PAGE>
[{"type": "8-K", "sequence": "1", "filename": "final4thqtrer.txt", "description": "FORM 8-K", "secsgml_size_bytes": 41902}]
{"company-data": {"conformed-name": "PRINCIPAL FINANCIAL GROUP INC", "cik": "0001126328", "assigned-sic": "6321", "irs-number": "421520346", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-16725", "film-number": "08574282"}, "business-address": {"street1": "711 HIGH STREET", "city": "DES MOINES", "state": "IA", "zip": "50392-0300", "phone": "5152475111"}, "mail-address": {"street1": "711 HIGH STREET", "city": "DES MOINES", "state": "IA", "zip": "50392-0300"}}
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: FEBRUARY 4, 2008
                        (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))

                               ------------------
ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On  February  4,  2008,  Principal  Financial  Group,  Inc.  publicly  announced
information  regarding its results of operations and financial condition for the
quarter  ended  December  31,  2007.  The text of the  announcement  is included
herewith as Exhibit 99.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99    Fourth Quarter 2007 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/ MICHAEL H. GERSIE
                                           ------------------------------------
                                    Name:  Michael H. Gersie
                                    Title: Executive Vice President and Chief
                                           Financial Officer

Date:    February 5, 2008

                                       2
EXHIBIT 99

RELEASE: On receipt
MEDIA CONTACT:               Jeff Rader, 515-247-7883, RADER.JEFF@PRINCIPAL.COM
INVESTOR RELATIONS CONTACT:  Tom Graf, 515-235-9500,
                             investor-relations@principal.com

     PRINCIPAL  FINANCIAL GROUP,  INC. REPORTS FOURTH QUARTER 2007 AND FULL YEAR
     RESULTS

     Des Moines, IA (February 4, 2008) - Principal  Financial Group, Inc. (NYSE:
     PFG) today announced net income  available to common  stockholders of $34.1
     million(1),  or $0.13 per diluted share for the three months ended December
     31, 2007,  compared to $284.1  million,  or $1.04 per diluted share for the
     three  months  ended  December 31,  2006.  The company  reported  operating
     earnings of $225.8  million  for fourth  quarter  2007,  compared to $252.0
     million for fourth quarter 2006. Operating earnings per diluted share (EPS)
     for fourth quarter 2007 were $0.86 compared to $0.93 for the same period in
     2006.  Operating  revenues for fourth  quarter 2007 were  $2,901.8  million
     compared to $2,537.0 million for the same period last year.(2)
              Principal  Financial Group, Inc. also announced full year results.
     The company reported net income available to common  stockholders of $827.3
     million,  or $3.09 per diluted share for the twelve  months ended  December
     31, 2007,  compared to $1,031.3 million, or $3.74 per diluted share for the
     twelve  months  ended  December  31,  2006.  The  company  reported  record
     operating earnings of $1,058.4 million for 2007, compared to $972.1 million
     for  2006.  EPS for 2007 was a record  $3.95  compared  to $3.53  for 2006.
     Operating  revenues for 2007 were a record  $11,249.8  million  compared to
     $9,825.8 million for 2006.
              "In a year marked by adverse credit conditions and volatile equity
     markets,  The  Principal  delivered a strong  operating  result - 9 percent
     growth in earnings  and 12 percent  EPS  growth,"  said J. Barry  Griswell,
     chairman and chief executive officer. "Excluding the health division, which
     had a difficult year, total company earnings improved 15 percent."
              "In 2007, our three key growth engines - U.S. Asset  Accumulation,
     Principal  Global  Investors  and  Principal  International  - continued to
     demonstrate  strong  fundamentals,"  said  Griswell.  "Total company assets
     under  management  (AUM)  increased $54 billion,  or 21 percent,  including
     nearly  $20  billion  of net  cash  flows,  and  each  of our  three  asset
     management and accumulation  segments delivered record earnings,  improving
     $111 million or 15 percent for the year on a combined basis(3)."
              "The continued  strength of these segments was also evident in the
     fourth quarter," said Griswell.  "Our key asset management and accumulation
     businesses  again  delivered some  outstanding  results,  performance  that
     supports our outlook for continued strong long-term growth."

                                       3
Added Larry  Zimpleman,  president  and chief  operating  officer,
     "Sales of our three key retirement and investment  offerings - Full Service
     Accumulation,  Principal Funds and Individual Annuities - were $5.6 billion
     in total in the  fourth  quarter  and $21.7  billion  for the  year,  up 63
     percent and 61 percent respectively over the prior year periods.  Principal
     Global  Investors' fee mandate business  earnings  improved 20 percent from
     the year ago  quarter  and 44 percent  for the year,  reflecting  continued
     strong growth in third party AUM, which  increased 24 percent on an organic
     basis. And Principal  International's  earnings  improved 70 percent from a
     year ago, a tremendous  finish to a breakout  year that included 54 percent
     growth  in  earnings,  50  percent  growth  in AUM,  32  percent  growth in
     operating revenues and a 290 basis point improvement in return on equity."
              "While  earnings  for  the  health  division  fell  short  of  our
     expectations  in the fourth quarter,  earnings in our asset  management and
     accumulation  businesses  remained  solid,  particularly in light of spread
     widening in the  commercial  mortgage  securitization  market and declining
     equity  markets,  which  included a 3.8 percent drop in the S&P 500 Index,"
     said   Zimpleman.   "While  we  can't  control  equity  and  credit  market
     conditions,  we continue to intensify our turnaround  efforts in the health
     business,   focusing  on  network  discounts,   claims  costs  and  expense
     management."

     Additional highlights include:

     o    Record  annual  operating  revenues  in all four  operating  segments,
          driving a $1.4 billion or 14 percent increase for 2007.
     o    Continued  strong  organic sales of the company's key  retirement  and
          investment  products.  For 2007: full service  accumulation sales were
          $9.5  billion,  an  increase of 31 percent  (sales of $2.4  billion in
          fourth  quarter  2007);  mutual funds sales were $8.8 billion,  up 130
          percent (sales of $2.1 billion in fourth quarter 2007); and individual
          annuities  sales  were  $3.5  billion,  up 40  percent  (sales of $1.2
          billion in fourth quarter 2007).
     o    Return on equity  improved  110 basis  points,  from 15.3  percent  at
          December 31, 2006 to 16.4 percent at December 31, 2007.

     "Looking  forward,  our 2008  results will clearly be impacted by difficult
     market  conditions - continued  uncertainty  around the economy,  continued
     adverse  credit   conditions,   and  continued  equity  market  volatility,
     including  a 6  percent  decline  in the  S&P 500  Index  in the  month  of
     January," said Zimpleman. "That said we expect market conditions to improve
     over time,  and we remain  committed  to and  confident  we can achieve our
     longer-term performance objectives - 11 to 13 percent average annual growth
     in EPS, and roughly 50 basis points average annual improvement in operating
     ROE."

     NET INCOME Net income  available to common  stockholders  of $34.1  million
     reflects net  realized/unrealized  capital losses of $211.5 million,  which
     includes: $134.8 million of losses related to impairments of fixed maturity
     securities (including $49.4 million related to subprime);  $33.5 million of
     impairments  on  equity  securities;  unrealized  capital  losses  of $26.3
     million,  primarily  from the mark to market of  interest  rate and  credit
     default  swaps;  and $21.3 million of realized  capital  losses  related to
     derivative  positions  (including  $7.9 million  related to subprime).  Net
     income also includes a $19.8 million gain from other after-tax adjustments,
     primarily  related  to a gain on sale of real  estate.  Between  the  fixed
     maturity and equity security  impairments,  $84.8 million of losses relates
     to certain structured assets. The company believes the fundamental  outlook
     for these assets  remains strong and that values will  ultimately  recover.
     With market illiquidity  reducing fair values, at year-end the company also
     conservatively valued its collateralized debt obligations,  which generated
     the $49.4 million of losses, identified above. The company believes current

                                       4
fair value is significantly  below the value it will ultimately  recover on
     these assets.

                               SEGMENT HIGHLIGHTS

     U.S. ASSET ACCUMULATION
              Segment  operating  earnings  for fourth  quarter 2007 were $149.9
     million,  compared to $146.6 million for the same period in 2006.  Earnings
     growth from higher account values was dampened by: a $16.5 million  pre-tax
     increase  over the same  period a year ago in deferred  policy  acquisition
     cost  amortization  expense  between  the  Full  Service  Accumulation  and
     Individual  Annuities  businesses,  primarily  due to  experience  true-ups
     related to equity  market  declines in fourth  quarter  2007 as compared to
     equity market gains in fourth quarter 2006.
              Operating  revenues for the fourth  quarter  increased to $1,300.3
     million compared to $1,085.3 million for the same period in 2006, primarily
     due to  solid  growth  in the  Principal  Funds  and  Individual  Annuities
     businesses.
              Segment assets under management were a record $178.1 billion as of
     December 31, 2007, compared to $161.9 billion as of December 31, 2006.

     GLOBAL ASSET MANAGEMENT
              Segment  operating  earnings  for fourth  quarter  2007 were $27.4
     million,  compared  to $32.1  million in the prior year  quarter.  Earnings
     growth from the fee mandate business,  which increased $4.8 million,  or 20
     percent compared to fourth quarter 2006, was more than offset by the impact
     on the spread and  securitization  business from unfavorable  conditions in
     the commercial mortgage-backed securities ("CMBS") market.
              Operating revenues for fourth quarter increased to a record $174.1
     million compared to $149.5 million for the same period in 2006, as a result
     of higher management fees across all lines of business.
              Third party assets under  management for the segment were a record
     $87.4  billion as of December  31,  2007,  compared to $59.2  billion as of
     December 31, 2006.

     INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION
              Segment  operating  earnings  for fourth  quarter  2007 were $25.4
     million,  compared to $14.9 million for the same period in 2006, reflecting
     solid  earnings  growth in Brazil,  Hong  Kong,  Chile,  and China.  Fourth
     quarter 2007 earnings  also included a $5.6 million tax charge,  due to new
     tax  regulations in Mexico,  partially  offset by a $3.8 million  after-tax
     benefit from higher  yields on invested  assets in Chile,  due to unusually
     high inflation.
              Operating revenues were a record $255.4 million for fourth quarter
     2007,  compared  to $128.6  million  for the same  period  last  year.  The
     increase was primarily  the result of higher yields on invested  assets and
     increased sales of single premium group annuities in Chile.
              Segment assets under  management were a record $28.7 billion as of
     December 31, 2007, compared to $19.1 billion as of December 31, 2006.

                                       5
LIFE AND HEALTH INSURANCE
              Segment  operating  earnings  for fourth  quarter  2007 were $42.1
     million,  compared to $64.9 million for the same period in 2006.  Specialty
     Benefits  division  earnings  increased  $4.1  million  to  $25.5  million,
     reflecting  growth  in  the  business  and  effective  expense  management.
     Individual Life earnings were $26.0 million,  compared to $30.4 million for
     the  same  period  in 2006.  Adjusting  fourth  quarter  2006  results  for
     investment earnings on a higher capital base and lower than normal deferred
     policy  acquisition  cost  amortization  expense,  Individual Life earnings
     improved  modestly from a year ago. The Health  division had a loss of $9.4
     million in fourth  quarter 2007,  reflecting  claim  seasonality  in higher
     deductible health plans, as well as adverse claims experience overall. This
     compared to earnings of $13.1 million in fourth  quarter 2006, or losses of
     $1.9 million after  adjusting  fourth  quarter 2006 for the  development of
     year-end 2006 claims, as previously communicated.

              Operating revenues were a record $1,221.6 million,  an increase of
     one percent from the same period in 2006.  Specialty  Benefits continued to
     achieve strong growth,  with revenues improving 11 percent from a year ago.
     Individual Life revenues  increased 3 percent,  reflecting  solid growth in
     fee-based  universal  life and variable  universal  life  products.  Health
     revenues decreased seven percent, primarily due to a 12 percent decrease in
     insured medical covered members.

     CORPORATE AND OTHER
              Operating losses for the segment in fourth quarter 2007 were $19.0
     million,  compared to operating  losses of $6.5 million for the same period
     in  2006.  Although  many  items  contributed  to the  variance,  the  main
     contributors were lower earnings on reduced invested capital in the segment
     and higher interest  expense,  due in part to the company's  fourth quarter
     2006 issuance of long-term debt.

     FORWARD LOOKING AND CAUTIONARY STATEMENTS
     This press release contains forward-looking statements,  including, without
     limitation,  statements as to sales targets, 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
     December 31, 2006, and in the company's  quarterly  report on Form 10-Q for
     the  quarter  ended  September  30,  2007,  filed by the  company  with the
     Securities and Exchange Commission.  These risks and uncertainties include,
     without limitation:  competitive factors;  volatility of financial markets;
     decrease in ratings; interest rate changes; inability to attract and retain
     sales  representatives;  international  business  risks;  foreign  currency
     exchange  rate  fluctuations;   a  pandemic,   terrorist  attack  or  other
     catastrophic event;  default of the company's  re-insurers;  and investment
     portfolio risks.

                                       6
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 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.  Management
     also uses  non-GAAP  measures for goal  setting,  determining  employee and
     senior management awards and compensation,  and evaluating performance on a
     basis comparable to that used by investors and securities analysts.

     SHARE REPURCHASES
     In  October  2007,  the  company  repurchased  1.1  million  shares for $70
     million,  which completed the Board's May 2007  authorization of up to $250
     million.   In  November  2007,   following  the  Board's  share  repurchase
     authorization  of  up  to  $500  million,   the  company  entered  into  an
     accelerated  common stock  repurchase  agreement  with an investment  bank.
     Under this  agreement,  the  company  paid $250  million and  received  the
     initial  delivery  of  approximately  2.9  million  common  shares,   while
     retaining the right to receive  additional  common shares  depending on the
     volume weighted  average share price of the company's common stock over the
     program's  execution  period.  The  accelerated  agreement was completed in
     January 2008, at which time the company received  approximately 0.9 million
     additional shares.

     EARNINGS CONFERENCE CALL
     At 9:00 A.M. (CDT) tomorrow, Chairman and CEO J. Barry Griswell,  President
     and COO Larry  Zimpleman,  and Executive Vice President and CFO Mike Gersie
     will lead a discussion during a live conference call. Parties interested in
     listening  to the  conference  call  live may  access  the  webcast  on the
     company's Investor Relations (IR) website  (www.principal.com/investor)  or
     by dialing (800) 374-1609 (U.S.  callers) or (706) 643-7701  (International
     callers) approximately 10 minutes prior to the start of the call. To access
     the call, leader name is Tom Graf.  Listeners can access an audio replay of
     the call on the IR website,  or by calling  (800)  642-1687 (US callers) or
     (706) 645-9291  (International  callers). The access code for the replay is
     28483992.  Replays  will  be  available  through  February  12,  2008.  The
     financial  supplement  is  currently  available  on our  website and may be
     referred to during the conference call.

     ABOUT THE PRINCIPAL FINANCIAL GROUP
     The  Principal  Financial  Group(R) (The  Principal  (R))(4) is a leader in
     offering businesses,  individuals and institutional clients a wide range of
     financial  products  and  services,  including  retirement  and  investment
     services, life and health insurance, and banking through its diverse family
     of financial services companies. A member of the Fortune 500, the Principal
     Financial Group has $311.1 billion in assets under management(5) and serves
     some 18.6 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.

                                       ###

                                       7
SUMMARY OF SEGMENT AND PRINCIPAL FINANCIAL GROUP, INC. RESULTS

                                                                 OPERATING EARNINGS (LOSS)* IN MILLIONS
                                                     -------------------------------------------------------------
                                                            THREE MONTHS ENDED,           TWELVE MONTHS ENDED,
                                                     -------------------------------------------------------------
SEGMENT         12/31/07       12/31/06       12/31/07        12/31/06
---------------------------------------------------- ---------------- -------------- -------------- --------------
                            U.S. ASSET ACCUMULATION         $ 149.9         $146.6       $  655.8      $  542.6
---------------------------------------------------- ---------------- -------------- -------------- --------------
                            GLOBAL ASSET MANAGEMENT            27.4           32.1          108.5         102.5
---------------------------------------------------- ---------------- -------------- -------------- --------------
    INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION            25.4           14.9          110.7          71.8
---------------------------------------------------- ---------------- -------------- -------------- --------------
                          LIFE AND HEALTH INSURANCE            42.1           64.9          221.1         282.5
---------------------------------------------------- ---------------- -------------- -------------- --------------
                                CORPORATE AND OTHER          (19.0)           (6.5)         (37.7)        (27.3)
---------------------------------------------------- ---------------- -------------- -------------- --------------
                                 OPERATING EARNINGS           225.8          252.0        1,058.4         972.1
---------------------------------------------------- ---------------- -------------- -------------- --------------
                    NET REALIZED/UNREALIZED CAPITAL
                        GAINS (LOSSES), AS ADJUSTED          (211.5)           9.7         (229.7)         18.0
---------------------------------------------------- ---------------- -------------- -------------- --------------
                        OTHER AFTER-TAX ADJUSTMENTS            19.8           22.4           (1.4)         41.2
---------------------------------------------------- ---------------- -------------- -------------- --------------
        NET INCOME AVAILABLE TO COMMON STOCKHOLDERS         $  34.1         $284.1       $  827.3      $1,031.3
---------------------------------------------------- ---------------- -------------- -------------- --------------

                                                                          PER DILUTED SHARE
                                                     -------------------------------------------------------------
                                                            THREE MONTHS ENDED,           TWELVE MONTHS ENDED,
                                                     -------------------------------------------------------------
                                                           12/31/07       12/31/06       12/31/07        12/31/06
                                                     ---------------- -------------- -------------- --------------
                                 OPERATING EARNINGS         $   0.86        $  0.93      $    3.95     $    3.53
---------------------------------------------------- ---------------- -------------- -------------- --------------
                    NET REALIZED/UNREALIZED CAPITAL            (0.81)          0.04          (0.85)         0.07
                        GAINS (LOSSES), AS ADJUSTED
---------------------------------------------------- ---------------- -------------- -------------- --------------
                        OTHER AFTER-TAX ADJUSTMENTS             0.08           0.07          (0.01)         0.14
---------------------------------------------------- ---------------- -------------- -------------- --------------
        NET INCOME AVAILABLE TO COMMON STOCKHOLDERS         $   0.13        $  1.04      $    3.09     $    3.74
---------------------------------------------------- ---------------- -------------- -------------- --------------
 WEIGHTED-AVERAGE DILUTED COMMON SHARES OUTSTANDING           263.9          272.1          268.1         275.5
---------------------------------------------------- ---------------- -------------- -------------- --------------
*OPERATING  EARNINGS  VERSUS  U.S.  GAAP (GAAP) NET INCOME  AVAILABLE  TO COMMON
STOCKHOLDERS  Management uses operating  earnings,  which excludes the effect of
net  realized/unrealized  capital  gains  and  losses,  as  adjusted,  and other
after-tax adjustments, for goal setting, determining employee compensation,  and
evaluating  performance  on a basis  comparable  to that used by  investors  and
securities analysts. Segment operating earnings are determined by adjusting U.S.
GAAP net income  available to common  stockholders  for net  realized/unrealized
capital  gains and losses,  as adjusted,  and other  after-tax  adjustments  the
company believes are not indicative of overall operating trends. Note: after-tax
adjustments  have  occurred  in the past and  could  recur in  future  reporting
periods.  While these items may be significant  components in understanding  and
assessing  our  consolidated  financial  performance,  management  believes  the
presentation of segment  operating  earnings  enhances the  understanding of our
results of  operations  by  highlighting  earnings  attributable  to the normal,
ongoing operations of the company's businesses.

                                       8
PRINCIPAL FINANCIAL GROUP, INC.
                              RESULTS OF OPERATIONS
                                  (IN MILLIONS)

                                                         THREE MONTHS ENDED              TWELVE MONTHS ENDED
                                                 ------------------------------- ---------------------------------
                                                        12/31/07       12/31/06        12/31/07        12/31/06
                                                 ---------------- --------------- --------------- ----------------
Premiums and other considerations                    $1,178.1        $1,098.9      $  4,634.1      $  4,305.3
   Fees and other revenues                                 680.8           515.0         2,634.7         1,902.5
   Net investment income                                 1,037.7           924.1         3,966.5         3,620.6
   Net realized/unrealized capital gains
   (losses)                                               (332.5)           21.6          (328.8)           44.7
                                                 ---------------- --------------- --------------- ----------------
   TOTAL REVENUES                                        2,564.1         2,559.6        10,906.5         9,873.1
                                                 ---------------- --------------- --------------- ----------------
   Benefits, claims, and settlement expenses             1,709.4         1,464.8         6,435.3         5,692.4
   Dividends to policyholders                               71.9            73.3           293.8           290.7
   Operating expenses                                      813.2           692.9         3,129.2         2,558.7
                                                 ---------------- --------------- --------------- ----------------
   TOTAL EXPENSES                                        2,594.5         2,231.0         9,858.3         8,541.8
                                                 ---------------- --------------- --------------- ----------------
   Income (loss) from continuing operations
        before income taxes                                (30.4)          328.6         1,048.2         1,331.3
   Income taxes (benefit)                                  (52.2)           66.2           208.1           295.9
                                                 ---------------- --------------- --------------- ----------------
   Income from continuing operations, net of
        related income taxes                                21.8           262.4           840.1         1,035.4
   Income from discontinued operations, net of
        related taxes                                       20.6            30.0           20.2             28.9
                                                 ---------------- --------------- --------------- ----------------
   NET INCOME                                               42.4           292.4           860.3         1,064.3
   Preferred stock dividends                                 8.3             8.3            33.0            33.0
                                                 ---------------- --------------- --------------- ----------------
   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS          $   34.1        $  284.1      $    827.3      $  1,031.3
   Less:
   Net realized/unrealized capital gains
        (losses), as adjusted                             (211.5)            9.7          (229.7)           18.0
   Other after-tax adjustments                              19.8            22.4            (1.4)           41.2
                                                 ---------------- --------------- --------------- ----------------
   OPERATING EARNINGS                                   $  225.8        $  252.0      $  1,058.4      $    972.1
                                                 ================ =============== =============== ================

                                                   SELECTED BALANCE SHEET STATISTICS

                                                                            PERIOD ENDED
                                                     ------------------------------------------------------------
                                                          12/31/07              12/31/06            12/31/05
                                                     -------------------- --------------------- -----------------
  Total assets (in billions)                            $  154.5                 $   143.7         $   127.0
  Total common equity (in millions)                     $6,879.7                 $ 7,318.8         $ 7,265.2
  Total common equity excluding accumulated other
       comprehensive income (in millions)               $6,459.5                 $ 6,471.9         $ 6,270.4
  End of period common shares outstanding
       (in millions)                                       259.1                     268.4             280.6
  Book value per common share                           $   26.55                $    27.27        $    25.89
  Book value per common share excluding
      accumulated other comprehensive income            $   24.93                $    24.11        $    22.35
9
PRINCIPAL FINANCIAL GROUP, INC.
           RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO U.S. GAAP
                       (IN MILLIONS, EXCEPT AS INDICATED)

                                                               THREE MONTHS ENDED              TWELVE MONTHS ENDED
                                                         ------------------------------------------------------------------
                                                               12/31/07        12/31/06        12/31/07         12/31/06
                                                         ----------------- --------------- --------------- ----------------
DILUTED EARNINGS PER COMMON SHARE:
Operating Earnings                                                 0.86            0.93             3.95            3.53
Net realized/unrealized capital gains (losses)                    (0.81)           0.04            (0.85)           0.07
Other after-tax adjustments                                        0.08            0.07            (0.01)           0.14
                                                         ----------------- --------------- --------------- ----------------
Net income available to common stockholders                        0.13            1.04             3.09            3.74
                                                         ================= =============== =============== ================

BOOK VALUE PER COMMON SHARE EXCLUDING ACCUMULATED
OTHER COMPREHENSIVE INCOME:
Book value per common share excluding accumulated
     other comprehensive income                                   24.93           24.11            24.93           24.11
Net unrealized capital gains                                       1.22            3.21             1.22            3.21
Foreign currency translation                                       0.14           (0.10)            0.14           (0.10)
Net unrecognized post-retirement benefit obligations               0.26            0.05             0.26            0.05
                                                         ----------------- --------------- --------------- ----------------
Book value per common share including accumulated
     other comprehensive income                                   26.55           27.27            26.55           27.27
                                                         ================= =============== =============== ================
OPERATING REVENUES:
USAA                                                           1,300.3         1,085.3          5,150.2         4,107.0
GAM                                                              174.1           149.5            603.0           488.1
IAMA                                                             255.4           128.6            796.3           605.4
Life and Health                                                1,221.6         1,210.1          4,857.1         4,736.2
Corporate and Other                                              (49.6)          (36.5)          (156.8)         (110.9)
                                                         ----------------- --------------- --------------- ----------------
Total operating revenues                                       2,901.8         2,537.0         11,249.8         9,825.8
Add:  Net realized/unrealized capital gains (losses)
     and related fee adjustments                                (337.0)           20.6           (343.0)           44.2
Less:  Operating revenues from discontinued real estate            0.7            (2.0)             0.3            (3.1)
Total GAAP revenues                                      ----------------  ---------------  -------------- ----------------
                                                               2,564.1         2,559.6         10,906.5         9,873.1
                                                         ================= =============== =============== ================
OPERATING EARNINGS:
USAA                                                             149.9           146.6            655.8           542.6
GAM                                                               27.4            32.1            108.5           102.5
IAMA                                                              25.4            14.9            110.7            71.8
Life and Health                                                   42.1            64.9            221.1           282.5
Corporate and Other                                              (19.0)           (6.5)           (37.7)          (27.3)
                                                         ----------------- --------------- --------------- ----------------
Total operating earnings                                         225.8           252.0          1,058.4           972.1
Net realized/unrealized capital gains (losses)                  (211.5)            9.7           (229.7)           18.0
Other after-tax adjustments                                       19.8            22.4             (1.4)           41.2
Net income available to common stockholders              ----------------- ---------------  -------------- ----------------
                                                                  34.1           284.1            827.3         1,031.3
                                                         ================= =============== =============== ================

NET REALIZED/UNREALIZED CAPITAL GAINS (LOSSES):
Net realized/unrealized capital gains (losses), as
adjusted                                                        (211.5)            9.7           (229.7)           18.0
Add:
Periodic settlements and accruals on non-hedge
derivatives                                                        4.0             -               18.9              -
Amortization of DPAC and sale inducement costs                   (15.3)           (1.5)           (10.4)           (5.4)
Capital gains distributed                                          3.3             6.0             11.0            11.8
Tax impacts                                                     (118.4)            3.5           (125.5)           12.1
Minority interest capital gains                                    4.9             2.9             11.6             7.7
Less related fee adjustments:
Unearned front-end fee income                                       -             (0.8)             8.7             0.8
Certain market value adjustments to fee revenues                  (0.5)           (0.2)            (4.0)           (1.3)
                                                         ---------------   --------------- --------------- ----------------
GAAP net realized/unrealized capital gains (losses)             (332.5)           21.6           (328.8)           44.7
                                                         ===============   =============== =============== ================

OTHER AFTER TAX ADJUSTMENTS:
Gain on disposal of discontinued real estate
    investments                                                   20.0            30.9             20.0            30.9
Tax refinements related to prior years                            (0.2)            -              (21.4)            -
Contribution to foundation                                         -              (8.5)             -              (8.5)
IRS audit Issue                                                    -               -                -              18.8
                                                         ---------------   --------------- --------------- ----------------
Total other after-tax adjustments                                 19.8            22.4             (1.4)           41.2
                                                         ===============   =============== =============== ================
10
(1)  Fourth  quarter 2007 net income  discussed in this release  before  Segment
     Highlights.
(2)  Use of non-GAAP  financial  measures is  discussed  in this  release  after
     Segment Highlights.
(3)  The  increase  was $158  million or 22 percent  on a reported  basis,  $111
     million or 15 percent  excluding  $28 million of net  benefiting  items for
     Full Service  Accumulation in 2007, and $19 million of net benefiting items
     for Principal International.
(4)  "The Principal  Financial Group" and "The Principal" are registered service
     marks of Principal  Financial  Services,  Inc.,  a member of the  Principal
     Financial Group.
(5)  As of December 31, 2007

                                       11