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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>SECURITIES AND EXCHANGE COMMISSION</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Washington, D.C. 20549</FONT></B></TD></TR>
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     <TD align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>FORM 8-K</FONT></B></TD></TR>
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     <TD align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CURRENT REPORT</FONT></B></TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD align=center><B><FONT 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 align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Securities Exchange Act of 1934</FONT></B></TD></TR>
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     <TD align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of Report: </FONT><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">February 8, 2010</FONT></B></TD></TR>
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     <TD align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date of earliest event reported)</FONT></TD></TR>
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     <TD noWrap align=center><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=5>PRINCIPAL FINANCIAL GROUP, INC.</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Exact name of registrant as specified in its charter)</FONT></TD></TR></TABLE><BR>
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     <TD 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;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Delaware</FONT></B>&nbsp;</TD>
     <TD 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;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>1-16725</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 42-1520346</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (State or other jurisdiction</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Commission file number)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp; (I.R.S. Employer</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Identification Number)</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=center colSpan=2><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>711 High Street, Des Moines, Iowa 50392</FONT></B></TD></TR>
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     <TD align=center colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Address of principal executive offices)</FONT></TD></TR>
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     <TD align=center colSpan=2><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>(515) 247-5111</FONT></B></TD></TR>
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     <TD align=center colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(Registrant&#146;s telephone number, including area code)</FONT></TD></TR>
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     <TD noWrap align=left colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; registrant under any of the following provisions:</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp;&nbsp;&nbsp;]</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp; &nbsp;]</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp; &nbsp;]</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>240.14d-2(b))</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp; &nbsp;]</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>240.13e-4(c))</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Page 2</FONT><FONT size=2>&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2.02. Results of Operations and Financial Condition</FONT></B></TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">On February 8, 2010, Principal Financial Group, Inc. publicly announced information regarding its</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">results of operations and financial condition for the quarter ended December 31, 2009. The text of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">the announcement is included herewith as Exhibit 99.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9.01 Financial Statements and Exhibits</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">99&nbsp;&nbsp;&nbsp; Fourth Quarter 2009 Earnings Release</FONT>&nbsp;</TD></TR>
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     <TD align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">SIGNATURE</FONT></TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT 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 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp;</TD></TR>
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     <TD 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif">By:</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp; /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; </U></TD></TR>
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     <TD 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Name:&nbsp; Terrance J. Lillis</FONT>&nbsp;</TD></TR>
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     <TD 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Title:&nbsp;&nbsp;&nbsp;&nbsp; Senior Vice President and Chief Financial</FONT>&nbsp;</TD></TR>
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     <TD 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Officer</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: February 8, 2010</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Page 3</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD 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;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>EXHIBIT 99</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>RELEASE</FONT></B><B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif" size=2>:</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>On receipt</FONT>&nbsp;</TD>
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     <TD noWrap align=left colSpan=2><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>MEDIA CONTACT:</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Eva Quinn, 515-247-7468, quinn.eva@principal.com</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>INVESTOR RELATIONS CONTACT</FONT></B><I><FONT face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif" size=2>:</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Tom Graf, 515-235-9500, investor-relations@principal.com</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL FINANCIAL GROUP, INC. REPORTS FULL YEAR AND FOURTH QUARTER 2009 RESULTS</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Des Moines, IA (February 8, 2010) &#150; Principal Financial Group, Inc. (NYSE: PFG) today announced</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>results for full year and fourth quarter 2009. The company reported net income available to common</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>stockholders of $589.7 million, or $1.97 per diluted share for the twelve months ended December 31, 2009,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>compared to $425.1 million, or $1.63 per diluted share for the twelve months ended December 31, 2008. The</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>company reported operating earnings of $804.1 million for 2009, compared to $942.7 million for 2008.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating earnings per diluted share (EPS) for 2009 were $2.69 compared to $3.61 for 2008. Per share data is</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>based on weighted average common shares outstanding of 298.9 million and 261.1 million, for the twelve</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>month periods ending December 31, 2009, and December 31, 2008, respectively. Operating revenues for 2009</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>were $9,322.8 million compared to $10,725.1 million for 2008.</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" size=2>1</FONT></SUP>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>For the three months ended December 31, 2009 the company reported net income available to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>common stockholders of $141.9 million or $0.44 per diluted share compared to a net loss available to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>common stockholders of $7.5 million, or $(0.03) per diluted share for the three months ended December 31,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>2008. The company reported operating earnings of $200.9 million for fourth quarter 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$179.0 million for fourth quarter 2008. EPS for fourth quarter 2009 was $0.62 compared to $0.69 for the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>same period in 2008. Per share data is based on weighted average common shares outstanding of 321.9 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and 259.7 million, for fourth quarter 2009 and fourth quarter 2008, respectively. Operating revenues for fourth</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>quarter 2009 were $2,368.7 million compared to $2,527.0 million for the same period last year. Assets under</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>management (AUM) were $284.7 billion as of December 31, 2009 compared to $247.0 billion as of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>December 31, 2008.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#147;Fourth quarter was a solid finish to a very solid year for The Principal, demonstrating the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>resiliency of our businesses,&#148; said Larry D. Zimpleman, chairman, president and chief executive officer.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#147;With improved market conditions and business fundamentals, the fourth quarter was a continuation of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>positive trends from the past two quarters.&#148;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#147;2009 was a year of strong management action to address some of the most challenging economic</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and market conditions in 75 years,&#148; said Zimpleman. &#147;We took the necessary actions to align expenses with</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>revenues; we enhanced liquidity through the crisis; and we strengthened our capital position with our equity</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and debt capital raises. We also continued to implement our strategy to deliver sustainable, long-term growth</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;_________________________</TD></TR>
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     <TD noWrap align=left><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>1 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Use of non-GAAP financial measures is discussed in this release after Segment Highlights.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Page 4</FONT><FONT size=1>&nbsp;</FONT></TD>
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     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>by expanding our portfolio of employee benefit and investment offerings; adding new distribution alliances;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and extending our joint venture with Banco do Brasil for 23 years.</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>2 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#148;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Additional Highlights:</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Book value including accumulated other comprehensive income per share more than tripled from a year ago</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>to $23.05 as of December 31, 2009, reflecting a $6.3 billion decrease in net unrealized losses.</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" size=2>3</FONT></SUP>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating return on average equity excluding accumulated other comprehensive income improved 40</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>basis points in the fourth quarter to 10.6 percent for the trailing twelve months ended December 31,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>2009.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Total company operating expenses down $375.6 million, or 12 percent compared to 2008, reflecting</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>strong expense management.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Strong sales in 2009 of the company&#146;s three key U.S. retirement and investment products, despite a</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>difficult sales environment &#150; $14.9 billion on a combined basis, including fourth quarter sales of $1.0</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>billion for Full Service Accumulation, $1.8 billion for Principal Funds and $0.4 billion for Individual</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Annuities.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Strong capital and liquidity, with: an estimated risk based capital ratio of 415 to 425 percent at year-end;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>approximately $1.5 billion of excess capital;</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>4 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and approximately $6.4 billion of liquid assets.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Continued to scale back Investment Only (the company&#146;s institutional GIC and funding agreement</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>business), reducing the block by $4.3 billion in 2009, releasing approximately $165 million of capital.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Record operating earnings for the Individual Annuities business of $100.7 million in 2009.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Record assets under management for Principal International of $34.6 billion, including record net cash</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>flows of $3.2 billion, or 14 percent of beginning of year assets under management.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Added Terry Lillis, senior vice president and chief financial officer, &#147;We&#146;ve seen substantial recovery in</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>asset valuations, but with consumer confidence still fragile, the economic recovery remains tenuous. Businesses</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and institutional investors continue to proceed with caution, which has impacted sales and net cash flows. We are</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>however, continuing to see signs of improvement. At a billion dollars in the fourth quarter, full service</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>accumulation sales more than doubled from third quarter, and quote activity has improved sequentially for three</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>consecutive quarters. In addition, increased search activity from institutional investors translated into a number of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>key wins for Principal Global Investors in the fourth quarter.&#148;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Net Income</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Net income available to common stockholders of $589.7 million for 2009 reflects net realized capital losses</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>of $213.7 million, which includes:</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp; &#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$279.4 million of losses related to sales and permanent impairments of fixed maturity securities,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>including $61.0 million of losses on commercial mortgage backed securities; partially offset by $71.7</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>million of gains related to sales of fixed maturity securities;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$78.1 million of losses on commercial mortgage loans;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$44.7 million of losses on derivatives and related hedge activities;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$99.0 million of gains related to deferred policy acquisition costs; and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$31.9 million of gains, primarily due to mark to market of fixed maturity securities held as trading.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>_________________________&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>2 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Pending completion of necessary approvals and transactions associated with the Memorandum of Understanding announced on</FONT><FONT size=1>&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>October 27, 2009, to extend the pension and long-term asset accumulation joint venture in Brazil.</FONT><FONT size=1>&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left colSpan=2><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>3 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Net unrealized losses equal the excess of gross unrealized losses over gross unrealized gains.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>4 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a 350 percent NAIC</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>risk based capital ratio for the life company.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Page 5</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2>Net income available to common stockholders of $141.9 million for fourth quarter 2009 reflects net realized </FONT></TD></TR>
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     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2>capital losses of $59.1 million, which includes:</FONT></TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$62.6 million of losses related to sales and permanent impairments of fixed maturity securities including</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$29.1 million of losses on commercial mortgage backed securities; partially offset by $7.9 million of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>gains related to sales of fixed maturity securities;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$20.6 million of losses on commercial mortgage loans;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$6.1 million of losses related to permanent impairments of equity securities;</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$5.4 million of losses on fixed maturity securities held as trading; and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$31.2 million of gains related to deferred policy acquisition costs.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><I><FONT face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></TABLE><BR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Asset Accumulation</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Segment operating earnings for fourth quarter 2009 were $125.3 million, compared to $102.8 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for the same period in 2008. Individual annuities earnings were $24.2 million for fourth quarter 2009, compared</FONT></TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to a loss of $0.1 million in the year ago quarter. The increase from a year ago reflects 9 percent higher average</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; account values in fourth quarter 2009 than a year ago, and higher amortization expense from deferred policy</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; acquisition costs in fourth quarter 2008 due to equity market performance, which reduced earnings for that period</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by $14.8 million after tax. Full service accumulation earnings increased $13.2 million or 24 percent from a year</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ago to $67.5 million for fourth quarter 2009 primarily reflecting a 10 percent increase in average account values</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; and lower operating expenses. Principal Funds earnings increased $6.5 million from a year ago to $8.5 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; for fourth quarter 2009, primarily due to 7 percent higher average account values and lower operating expenses.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; These increases were partially offset by a $24.8 million decline in Investment Only earnings, reflecting 23% lower</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; average account values in fourth quarter 2009 than a year ago, and higher fee income in fourth quarter 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; resulting from a high volume of medium term note early redemptions with no corresponding activity in fourth</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; quarter 2009.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating revenues for the fourth quarter were $1,017.1 million, compared to $1,100.5 million for</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; the same period in 2008. The decline primarily reflects lower net investment income in the Investment Only</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; business, which the company has been scaling back over the last several quarters.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Segment assets under management were $159.8 billion as of December 31, 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $139.1 billion as of December 31, 2008.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Global Asset Management</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Segment operating earnings for fourth quarter 2009 were $12.7 million. This compares to $27.0</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; million in the prior year quarter, which included earnings of $15.6 million after-tax from a performance fee</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (under the terms of the contract, this performance fee is determined every five years).</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating revenues for fourth quarter were $120.4 million, compared to $173.5 million for the same</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; period in 2008 primarily due to the fourth quarter 2008 performance fee noted above.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Non-affiliated assets under management were $73.8 billion as of December 31, 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $70.3 billion as of December 31, 2008.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Page 6</FONT><FONT size=2>&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>International Asset Management and Accumulation</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Segment operating earnings for fourth quarter 2009 were $39.5 million, compared to $18.4 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>in the prior year quarter, primarily due to higher fee revenues on higher assets under management and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>improving macroeconomic conditions. The increase also reflects $3.4 million of after-tax gains on bonds in</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Brazil in fourth quarter 2009, compared to $3.3 million of after-tax losses on bonds for the same period a year</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ago, included in operating earnings under equity method accounting.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating revenues were $180.3 million for fourth quarter, compared to $148.6 million for the same</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>period last year, primarily the result of stronger earnings from Brazil and higher annuity sales in Chile.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Segment assets under management were a record $34.6 billion as of December 31, 2009,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>compared to $23.1 billion as of December 31, 2008. The increase from a year ago includes record net cash</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>flows of $3.2 billion, or 14 percent of beginning of year assets under management.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Life and Health Insurance</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&nbsp;&nbsp;&nbsp;&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 operating earnings for fourth quarter 2009 were $44.6 million, compared to $50.6 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for the same period in 2008. The decline primarily reflects higher claim costs in fourth quarter 2009 for the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Health division, which had an operating loss of $11.4 million, compared to an operating loss of $5.6 million</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for fourth quarter 2008. Losses in both periods reflect claim seasonality in higher deductible plans.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Individual Life earnings were $30.5 million compared to $29.6 million in fourth quarter 2008. Specialty</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Benefits earnings were $25.5 million compared to $26.6 million in fourth quarter 2008.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating revenues for fourth quarter were $1,095.8 million, compared to $1,154.9 million for the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>same period a year ago. The decline was primarily due to a 10 percent decline in Health division premiums,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>which primarily reflects a decline in group medical covered members.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Corporate</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Operating losses for fourth quarter 2009 were $21.2 million, compared to operating losses of $19.8</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>million for the same period in 2008, primarily reflecting higher interest on corporate debt in fourth quarter</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>2009.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Other-than-temporary impairments for fourth quarter 2009 and year-ended December 31, 2009</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>On April 9, 2009, the Financial Accounting Standards Board established new requirements for measuring and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>presenting other-than-temporary impairment charges on available-for-sale securities, which the Company</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>adopted with first quarter 2009 reporting.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Based on the new requirements, on a pre-tax basis, total other than temporary impairment losses on available-</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>for-sale securities were $204.1 million for fourth quarter 2009 and the noncredit portion of loss recognized in</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>other comprehensive income was $98.5 million. Net impairment losses on available-for-sale securities of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>$105.6 million for fourth quarter 2009 reflect: the company&#146;s actions to reduce asset ratings drift risk by selling</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>or tendering certain securities, which resulted in a loss of $8.0 million; and deterioration in expected cash flows,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>which resulted in a $19.0 million net impairment charge on non-agency residential mortgage backed securities</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and residential collateralized debt obligations, and a $44.7 million net impairment of commercial mortgage</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>backed securities and commercial mortgage backed collateralized debt obligations. The remainder of the net</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>impairment losses for fourth quarter 2009 primarily relates to impairments of corporate credits.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>On a pre-tax basis, total other than temporary impairment losses on available-for-sale securities were $714.1</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>million for year-ended December 31, 2009 and the noncredit portion of loss recognized in other</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>comprehensive income was $260.9 million. Net impairment losses on available-for-sale securities of $453.2</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>million for the year-ended December 31, 2009 reflect: the company&#146;s actions to reduce asset ratings drift risk</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>by selling or tendering certain securities, which resulted in a loss of $87.4 million; deterioration in expected</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>cash flows, which resulted in an $84.4 million net impairment charge on non-agency residential mortgage</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>backed securities and residential collateralized debt obligations, and a $93.9 million net impairment of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>commercial mortgage backed securities and commercial mortgage backed collateralized debt obligations.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The remainder of the net impairment losses for the year-ended December 31, 2009 primarily relates to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>impairments of corporate credits.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Forward looking and cautionary statements</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>This press release contains forward-looking statements, including, without limitation, statements as to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>operating earnings, net income available to common stockholders, net cash flows, realized and unrealized</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>goals and opinions. The company does not undertake to update or revise these statements, which are based</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>events and their effects on the company may not be those anticipated, and actual results may differ materially</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>could cause or contribute to such material differences are discussed in the company's annual report on Form</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>10-K for the year ended December 31, 2008, and in company&#146;s quarterly report on Form 10-Q for the quarter</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ended September 30, 2009, filed by the company with the Securities and Exchange Commission, as updated</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>or supplemented from time to time in subsequent filings. These risks and uncertainties include, without</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>limitation: adverse capital and credit market conditions that may significantly affect the company&#146;s ability to</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>meet liquidity needs, access to capital and cost of capital; a continuation of difficult conditions in the global</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>capital markets and the general economy that may materially adversely affect the company&#146;s business and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>results of operations; the actions of the U.S. government, Federal Reserve and other governmental and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended effect; the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>company; investment risks which may diminish the value of the company&#146;s invested assets and the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>investment returns credited to customers, which could reduce sales, revenues, assets under management and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>net income; requirements to post collateral or make payments related to declines in market value of specified</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.&#146;s primary</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>default of the company&#146;s re-insurers.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Use of Non-GAAP Financial Measures</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The company uses a number of non-GAAP financial measures that management believes are useful to investors</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>because they illustrate the performance of normal, ongoing operations, which is important in understanding and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>evaluating the company&#146;s financial condition and results of operations. They are not, however, a substitute for</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>U.S. GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>measures to the most directly comparable U.S. GAAP measure at the end of the release. The company adjusts</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>U.S. GAAP measures for items not directly related to ongoing operations. However, it is possible these</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>adjusting items have occurred in the past and could recur in the future reporting periods. Management also uses</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>non-GAAP measures for goal setting, as a basis for determining employee and senior management</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>awards and compensation, and evaluating performance on a basis comparable to that used by investors</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and securities analysts.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>Earnings Conference Call</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>On Tuesday, February 9, 2010 at 10:00 A.M. (ET), Chairman, President and Chief Executive Officer Larry</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Zimpleman and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>results, asset quality and capital adequacy during a live conference call, which can be accessed as follows:</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Via live Internet webcast. Please go to </FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#0000ff size=2><U>www.principal.com/investor</U> </FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>at least 10-15 minutes prior to the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>start of the call to register, and to download and install any necessary audio software.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>callers) approximately 10 minutes prior to the start of the call. The call leader's name is Tom Graf.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;&nbsp; </TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Replays of the earnings call are available at: </FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" color=#0000ff size=2><U>www.principal.com/investor</U> </FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>or by dialing 800-642-1687</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(U.S. and Canadian callers) or 706-645-9291 (International callers). The access code is 48727511.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Replays will be available approximately two hours after the completion of the live earnings call through</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>the end of day February 16, 2010.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The company's financial supplement and additional investment portfolio detail for fourth quarter 2009 is</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>currently available at </FONT><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" color=#0000ff size=2><U>www.principal.com/investor</U></FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>, and may be referred to during the call.</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>About the Principal Financial Group</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>The Principal Financial Group<SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#174;</FONT></SUP></FONT><FONT face="SymbolMT,Times New Roman,Times,serif" size=1> </FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>(The Principal </FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>&#174; </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" size=2>)</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>5 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>is a leader in offering businesses, individuals and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>institutional clients a wide range of financial products and services, including retirement and investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>services, life and health insurance, and banking through its diverse family of financial services companies. A</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>member of the Fortune 500, the Principal Financial Group has $284.7 billion in assets under management</FONT><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>6</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and serves some 18.9 million customers worldwide from offices in Asia, Australia, Europe, Latin America</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>ticker symbol PFG. For more information, visit </FONT><FONT face="TimesNewRomanPSMT,Times New &#13;&#10;Roman,Times,serif" color=#0000ff size=2><U>www.principal.com</U></FONT><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>.</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></TD>
     <TD noWrap align=left><FONT 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; ###</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD colSpan=2>_________________________&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>5 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>"The Principal Financial Group" and &#147;The Principal&#148; are registered service marks of Principal Financial Services, Inc., a member of the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>Principal Financial Group.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>6 </FONT></SUP><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=1>As of December 31, 2009</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD width="100%"></TD></TR>
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     <TD noWrap align=left><B><FONT face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif" size=2>*Operating earnings versus U.S. GAAP (GAAP) net income available to common stockholders</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>Management uses operating earnings, which excludes the effect of net realized capital gains and losses, as adjusted, and other after-</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>tax adjustments, for goal setting, as a basis for determining employee compensation, and evaluating performance on a basis</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>comparable to that used by investors and securities analysts. Segment operating earnings are determined by adjusting U.S. GAAP</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>net income available to common stockholders for net realized capital gains and losses, as adjusted, and other after-tax adjustments</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>the company believes are not indicative of overall operating trends. Note: it is possible these adjusting items have occurred in the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>past and could recur in future reporting periods. While these items may be significant components in understanding and assessing</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>our consolidated financial performance, management believes the presentation of segment operating earnings enhances the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>understanding of results of operations by highlighting earnings attributable to the normal, ongoing operations of the company&#146;s</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>businesses.</FONT>&nbsp;</TD></TR></TABLE><BR>
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fourthqtrer09.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:
February 8, 2010
(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 February 8, 2010, Principal Financial Group, Inc. publicly announced information regarding its
results of operations and financial condition for the quarter ended December 31, 2009. The text of
the announcement is included herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
99    Fourth Quarter 2009 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: February 8, 2010
Page 3
EXHIBIT 99
RELEASE
:
On receipt
MEDIA CONTACT:
Eva Quinn, 515-247-7468, quinn.eva@principal.com
INVESTOR RELATIONS CONTACT
:
Tom Graf, 515-235-9500, investor-relations@principal.com
PRINCIPAL FINANCIAL GROUP, INC. REPORTS FULL YEAR AND FOURTH QUARTER 2009 RESULTS
Des Moines, IA (February 8, 2010) – Principal Financial Group, Inc. (NYSE: PFG) today announced
results for full year and fourth quarter 2009. The company reported net income available to common
stockholders of $589.7 million, or $1.97 per diluted share for the twelve months ended December 31, 2009,
compared to $425.1 million, or $1.63 per diluted share for the twelve months ended December 31, 2008. The
company reported operating earnings of $804.1 million for 2009, compared to $942.7 million for 2008.
Operating earnings per diluted share (EPS) for 2009 were $2.69 compared to $3.61 for 2008. Per share data is
based on weighted average common shares outstanding of 298.9 million and 261.1 million, for the twelve
month periods ending December 31, 2009, and December 31, 2008, respectively. Operating revenues for 2009
were $9,322.8 million compared to $10,725.1 million for 2008.
1
For the three months ended December 31, 2009 the company reported net income available to
common stockholders of $141.9 million or $0.44 per diluted share compared to a net loss available to
common stockholders of $7.5 million, or $(0.03) per diluted share for the three months ended December 31,
2008. The company reported operating earnings of $200.9 million for fourth quarter 2009, compared to
$179.0 million for fourth quarter 2008. EPS for fourth quarter 2009 was $0.62 compared to $0.69 for the
same period in 2008. Per share data is based on weighted average common shares outstanding of 321.9 million
and 259.7 million, for fourth quarter 2009 and fourth quarter 2008, respectively. Operating revenues for fourth
quarter 2009 were $2,368.7 million compared to $2,527.0 million for the same period last year. Assets under
management (AUM) were $284.7 billion as of December 31, 2009 compared to $247.0 billion as of
December 31, 2008.
"Fourth quarter was a solid finish to a very solid year for The Principal, demonstrating the
resiliency of our businesses," said Larry D. Zimpleman, chairman, president and chief executive officer.
"With improved market conditions and business fundamentals, the fourth quarter was a continuation of
positive trends from the past two quarters."
"2009 was a year of strong management action to address some of the most challenging economic
and market conditions in 75 years," said Zimpleman. "We took the necessary actions to align expenses with
revenues; we enhanced liquidity through the crisis; and we strengthened our capital position with our equity
and debt capital raises. We also continued to implement our strategy to deliver sustainable, long-term growth
_________________________
1
Use of non-GAAP financial measures is discussed in this release after Segment Highlights.
Page 4
by expanding our portfolio of employee benefit and investment offerings; adding new distribution alliances;
and extending our joint venture with Banco do Brasil for 23 years.
2
"
Additional Highlights:
•
Book value including accumulated other comprehensive income per share more than tripled from a year ago
to $23.05 as of December 31, 2009, reflecting a $6.3 billion decrease in net unrealized losses.
3
•
Operating return on average equity excluding accumulated other comprehensive income improved 40
basis points in the fourth quarter to 10.6 percent for the trailing twelve months ended December 31,
2009.
•
Total company operating expenses down $375.6 million, or 12 percent compared to 2008, reflecting
strong expense management.
•
Strong sales in 2009 of the company's three key U.S. retirement and investment products, despite a
difficult sales environment – $14.9 billion on a combined basis, including fourth quarter sales of $1.0
billion for Full Service Accumulation, $1.8 billion for Principal Funds and $0.4 billion for Individual
Annuities.
•
Strong capital and liquidity, with: an estimated risk based capital ratio of 415 to 425 percent at year-end;
approximately $1.5 billion of excess capital;
4
and approximately $6.4 billion of liquid assets.
•
Continued to scale back Investment Only (the company's institutional GIC and funding agreement
business), reducing the block by $4.3 billion in 2009, releasing approximately $165 million of capital.
•
Record operating earnings for the Individual Annuities business of $100.7 million in 2009.
•
Record assets under management for Principal International of $34.6 billion, including record net cash
flows of $3.2 billion, or 14 percent of beginning of year assets under management.
Added Terry Lillis, senior vice president and chief financial officer, "We've seen substantial recovery in
asset valuations, but with consumer confidence still fragile, the economic recovery remains tenuous. Businesses
and institutional investors continue to proceed with caution, which has impacted sales and net cash flows. We are
however, continuing to see signs of improvement. At a billion dollars in the fourth quarter, full service
accumulation sales more than doubled from third quarter, and quote activity has improved sequentially for three
consecutive quarters. In addition, increased search activity from institutional investors translated into a number of
key wins for Principal Global Investors in the fourth quarter."
Net Income
Net income available to common stockholders of $589.7 million for 2009 reflects net realized capital losses
of $213.7 million, which includes:
•
$279.4 million of losses related to sales and permanent impairments of fixed maturity securities,
including $61.0 million of losses on commercial mortgage backed securities; partially offset by $71.7
million of gains related to sales of fixed maturity securities;
•
$78.1 million of losses on commercial mortgage loans;
•
$44.7 million of losses on derivatives and related hedge activities;
•
$99.0 million of gains related to deferred policy acquisition costs; and
•
$31.9 million of gains, primarily due to mark to market of fixed maturity securities held as trading.
_________________________
2
Pending completion of necessary approvals and transactions associated with the Memorandum of Understanding announced on
October 27, 2009, to extend the pension and long-term asset accumulation joint venture in Brazil.
3
Net unrealized losses equal the excess of gross unrealized losses over gross unrealized gains.
4
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.
Page 5
Net income available to common stockholders of $141.9 million for fourth quarter 2009 reflects net realized
capital losses of $59.1 million, which includes:
•
$62.6 million of losses related to sales and permanent impairments of fixed maturity securities including
$29.1 million of losses on commercial mortgage backed securities; partially offset by $7.9 million of
gains related to sales of fixed maturity securities;
•
$20.6 million of losses on commercial mortgage loans;
•
$6.1 million of losses related to permanent impairments of equity securities;
•
$5.4 million of losses on fixed maturity securities held as trading; and
•
$31.2 million of gains related to deferred policy acquisition costs.
Segment Highlights
U.S. Asset Accumulation
Segment operating earnings for fourth quarter 2009 were $125.3 million, compared to $102.8 million
for the same period in 2008. Individual annuities earnings were $24.2 million for fourth quarter 2009, compared
to a loss of $0.1 million in the year ago quarter. The increase from a year ago reflects 9 percent higher average
account values in fourth quarter 2009 than a year ago, and higher amortization expense from deferred policy
acquisition costs in fourth quarter 2008 due to equity market performance, which reduced earnings for that period
by $14.8 million after tax. Full service accumulation earnings increased $13.2 million or 24 percent from a year
ago to $67.5 million for fourth quarter 2009 primarily reflecting a 10 percent increase in average account values
and lower operating expenses. Principal Funds earnings increased $6.5 million from a year ago to $8.5 million
for fourth quarter 2009, primarily due to 7 percent higher average account values and lower operating expenses.
These increases were partially offset by a $24.8 million decline in Investment Only earnings, reflecting 23% lower
average account values in fourth quarter 2009 than a year ago, and higher fee income in fourth quarter 2008
resulting from a high volume of medium term note early redemptions with no corresponding activity in fourth
quarter 2009.
Operating revenues for the fourth quarter were $1,017.1 million, compared to $1,100.5 million for
the same period in 2008. The decline primarily reflects lower net investment income in the Investment Only
business, which the company has been scaling back over the last several quarters.
Segment assets under management were $159.8 billion as of December 31, 2009, compared to
$139.1 billion as of December 31, 2008.
Global Asset Management
Segment operating earnings for fourth quarter 2009 were $12.7 million. This compares to $27.0
million in the prior year quarter, which included earnings of $15.6 million after-tax from a performance fee
(under the terms of the contract, this performance fee is determined every five years).
Operating revenues for fourth quarter were $120.4 million, compared to $173.5 million for the same
period in 2008 primarily due to the fourth quarter 2008 performance fee noted above.
Non-affiliated assets under management were $73.8 billion as of December 31, 2009, compared to
$70.3 billion as of December 31, 2008.
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International Asset Management and Accumulation
Segment operating earnings for fourth quarter 2009 were $39.5 million, compared to $18.4 million
in the prior year quarter, primarily due to higher fee revenues on higher assets under management and
improving macroeconomic conditions. The increase also reflects $3.4 million of after-tax gains on bonds in
Brazil in fourth quarter 2009, compared to $3.3 million of after-tax losses on bonds for the same period a year
ago, included in operating earnings under equity method accounting.
Operating revenues were $180.3 million for fourth quarter, compared to $148.6 million for the same
period last year, primarily the result of stronger earnings from Brazil and higher annuity sales in Chile.
Segment assets under management were a record $34.6 billion as of December 31, 2009,
compared to $23.1 billion as of December 31, 2008. The increase from a year ago includes record net cash
flows of $3.2 billion, or 14 percent of beginning of year assets under management.
Life and Health Insurance
Segment operating earnings for fourth quarter 2009 were $44.6 million, compared to $50.6 million
for the same period in 2008. The decline primarily reflects higher claim costs in fourth quarter 2009 for the
Health division, which had an operating loss of $11.4 million, compared to an operating loss of $5.6 million
for fourth quarter 2008. Losses in both periods reflect claim seasonality in higher deductible plans.
Individual Life earnings were $30.5 million compared to $29.6 million in fourth quarter 2008. Specialty
Benefits earnings were $25.5 million compared to $26.6 million in fourth quarter 2008.
Operating revenues for fourth quarter were $1,095.8 million, compared to $1,154.9 million for the
same period a year ago. The decline was primarily due to a 10 percent decline in Health division premiums,
which primarily reflects a decline in group medical covered members.
Corporate
Operating losses for fourth quarter 2009 were $21.2 million, compared to operating losses of $19.8
million for the same period in 2008, primarily reflecting higher interest on corporate debt in fourth quarter
2009.
Other-than-temporary impairments for fourth quarter 2009 and year-ended December 31, 2009
On April 9, 2009, the Financial Accounting Standards Board established new requirements for measuring and
presenting other-than-temporary impairment charges on available-for-sale securities, which the Company
adopted with first quarter 2009 reporting.
Based on the new requirements, on a pre-tax basis, total other than temporary impairment losses on available-
for-sale securities were $204.1 million for fourth quarter 2009 and the noncredit portion of loss recognized in
other comprehensive income was $98.5 million. Net impairment losses on available-for-sale securities of
$105.6 million for fourth quarter 2009 reflect: the company's actions to reduce asset ratings drift risk by selling
or tendering certain securities, which resulted in a loss of $8.0 million; and deterioration in expected cash flows,
which resulted in a $19.0 million net impairment charge on non-agency residential mortgage backed securities
and residential collateralized debt obligations, and a $44.7 million net impairment of commercial mortgage
backed securities and commercial mortgage backed collateralized debt obligations. The remainder of the net
impairment losses for fourth quarter 2009 primarily relates to impairments of corporate credits.
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On a pre-tax basis, total other than temporary impairment losses on available-for-sale securities were $714.1
million for year-ended December 31, 2009 and the noncredit portion of loss recognized in other
comprehensive income was $260.9 million. Net impairment losses on available-for-sale securities of $453.2
million for the year-ended December 31, 2009 reflect: the company's actions to reduce asset ratings drift risk
by selling or tendering certain securities, which resulted in a loss of $87.4 million; deterioration in expected
cash flows, which resulted in an $84.4 million net impairment charge on non-agency residential mortgage
backed securities and residential collateralized debt obligations, and a $93.9 million net impairment of
commercial mortgage backed securities and commercial mortgage backed collateralized debt obligations.
The remainder of the net impairment losses for the year-ended December 31, 2009 primarily relates to
impairments of corporate credits.
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
losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations,
goals and opinions. The company does not undertake to update or revise 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, 2008, and in company's quarterly report on Form 10-Q for the quarter
ended September 30, 2009, 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 that may significantly affect the company's ability to
meet liquidity needs, access to capital and cost of capital; a continuation of difficult conditions in the global
capital markets and the general economy that may materially adversely affect the company's business and
results of operations; the actions of the U.S. government, Federal Reserve and other governmental and
regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended effect; the
risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets
recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the
company; investment risks which may diminish the value of the company's invested assets and the
investment returns credited to customers, which could reduce sales, revenues, assets under management and
net income; requirements to post collateral or make payments related to declines in market value of specified
assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes
in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign
currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.'s primary
reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and
regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of
financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales
representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and
default of the company's re-insurers.
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 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.
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Earnings Conference Call
On Tuesday, February 9, 2010 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 call leader's name is Tom Graf.
•
Replays of the earnings call are available at:
www.principal.com/investor
or by dialing 800-642-1687
(U.S. and Canadian callers) or 706-645-9291 (International callers). The access code is 48727511.
Replays will be available approximately two hours after the completion of the live earnings call through
the end of day February 16, 2010.
The company's financial supplement and additional investment portfolio detail for fourth quarter 2009 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, 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 $284.7 billion in assets under management
6
and serves some 18.9 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 December 31, 2009
Page 9
*Operating earnings versus U.S. GAAP (GAAP) net income available to common stockholders
Management uses operating earnings, which excludes the effect of net realized capital gains and losses, as adjusted, and other after-
tax adjustments, for goal setting, as a basis for 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 capital gains and losses, as adjusted, and other after-tax adjustments
the company believes are not indicative of overall operating trends. Note: it is possible these adjusting items 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 results of operations by highlighting earnings attributable to the normal, ongoing operations of the company's
businesses.
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