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   <TD align=center><B><FONT size=5 face=serif>SECURITIES AND EXCHANGE COMMISSION</FONT></B>&nbsp;</TD></TR>

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   <TD align=center><B><FONT size=3 face=serif>Washington, D.C. 20549</FONT></B></TD></TR></TABLE></DIV>

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   <P><B><FONT size=5 face=serif>FORM 8-K</FONT></B></P>

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   <P><B><FONT size=3 face=serif>CURRENT REPORT</FONT></B></P>

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   <TD align=center><B><FONT size=3 face=serif>Pursuant to Section 13 or 15(d) of the</FONT></B>&nbsp;</TD></TR>

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   <TD align=center><B><FONT size=3 face=serif>Securities Exchange Act of 1934</FONT></B>&nbsp;</TD></TR>

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   <P><FONT size=3 face=serif>Date of Report: </FONT><B><FONT size=3 face=serif>July 26, 2012</FONT></B></P></TD></TR>

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   <TD align=center><FONT size=3 face=serif>(Date of earliest event reported)</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=center><B><FONT size=5 face=serif>PRINCIPAL FINANCIAL GROUP, INC.</FONT></B>&nbsp;</TD></TR>

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   <TD align=center><FONT size=3 face=serif>(Exact name of registrant as specified in its charter)</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=center><B><FONT size=3 face=serif>Delaware</FONT></B>&nbsp;</TD>

   <TD align=left><B><FONT size=3 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1-16725</FONT></B>&nbsp;</TD>

   <TD align=center><B><FONT size=3 face=serif>42-1520346</FONT></B>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><FONT size=3 face=serif>(State or other jurisdiction (Commission file number)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=3 face=serif>(I.R.S. Employer</FONT>&nbsp;</TD></TR>

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   <TD align=center><FONT size=3 face=serif>of incorporation)</FONT>&nbsp;</TD>

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   <TD align=center><FONT size=3 face=serif>Identification Number)</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=center><B><FONT size=3 face=serif>711 High Street, Des Moines, Iowa 50392</FONT></B>&nbsp;</TD></TR>

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   <TD align=center><FONT size=3 face=serif>(Address of principal executive offices)</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=left><B><FONT size=2 face=serif>(515) 247-5111</FONT></B>&nbsp;</TD></TR></TABLE></DIV>

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   <TD rowSpan=2 width="100%"><FONT size=3 face=serif>(Registrant&#8217;s telephone number, including area code)</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=3 face=serif>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=3 face=serif>obligation of the registrant under any of the following provisions:</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=left><FONT size=3 face=serif>[ ]</FONT>&nbsp;</TD>

   <TD align=left><FONT size=3 face=serif>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.058pt" align=left><FONT size=3 face=serif>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 align=left><FONT size=3 face=serif>[ ]</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.068pt" align=left><FONT size=3 face=serif>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.044pt" align=left><FONT size=3 face=serif>(17 CFR 240.14d-2(b))</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=3 face=serif>[ ]</FONT>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.068pt" align=left><FONT size=3 face=serif>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.044pt" align=left><FONT size=3 face=serif>(17 CFR 240.13e-4(c))</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD colSpan=2 align=left><B><FONT size=3 face=serif>Item 2.02. Results of Operations and Financial Condition</FONT></B>&nbsp;</TD></TR>

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   <P style="MARGIN-TOP: 10pt"><FONT size=3 face=serif>On July 26, 2012, Principal Financial Group, Inc. publicly announced information regarding its results</FONT>&nbsp;</P></TD></TR>

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   <TD colSpan=2 align=left><FONT size=3 face=serif>of operations and financial condition for the quarter ended June 30, 2012. The text of the</FONT>&nbsp;</TD></TR>

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   <P><FONT size=3 face=serif>announcement is included herewith as Exhibit 99.</FONT>&nbsp;</P></TD></TR>

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   <P style="MARGIN-TOP: 10pt"><B><FONT size=3 face=serif>Item 9.01 Financial Statements and Exhibits</FONT></B>&nbsp;</P></TD>

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   <P style="MARGIN-TOP: 10pt"><FONT size=3 face=serif>99 Second Quarter 2012 Earnings Release</FONT>&nbsp;</P></TD>

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   <TD colSpan=2 align=center><B><FONT size=3 face=serif>SIGNATURE</FONT></B></TD></TR>

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   <TD style="TEXT-INDENT: 35.999pt" colSpan=2 align=left><FONT size=3 face=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 colSpan=2 align=left><FONT size=3 face=serif>caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 215.999pt" colSpan=2 align=left><FONT size=3 face=serif>PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 215.999pt" align=left><FONT size=3 face=serif>By:</FONT>&nbsp;</TD>

   <TD align=left><U><FONT size=3 face=serif>___/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;</FONT>&nbsp;</U></TD></TR>

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   <TD style="TEXT-INDENT: 215.999pt" colSpan=2 align=left><FONT size=3 face=serif>Name: Terrance J. Lillis</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 215.999pt" colSpan=2 align=left><FONT size=3 face=serif>Title: Senior Vice President and Chief Financial Officer</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=3 face=serif>Date: July 26, 2012</FONT>&nbsp;</TD>

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   <TD align=right><B><FONT size=2 face=serif>EXHIBIT 99</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Release:</FONT>&nbsp;</TD>

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   <TD align=left><FONT size=2 face=serif>On receipt, July 26, 2012</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" colSpan=2 align=left><FONT size=2 face=serif>Media contact:</FONT>&nbsp;</TD>

   <TD align=left><FONT size=2 face=serif>Adam Lackey, 515-362-0482, </FONT><U><FONT size=2 face=serif>lacky.adam@principal.com</FONT></U>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><FONT size=2 face=serif>Investor contact:</FONT>&nbsp;</TD>

   <TD align=left><FONT size=2 face=serif>John Egan, 515-235-9500, </FONT><U><FONT size=2 face=serif>egan.john@principal.com</FONT></U>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 33.48pt" colSpan=3 align=left><B><FONT size=4 face=serif>Principal Financial Group, Inc. Announces Second Quarter 2012 Results</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 36pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD vAlign=middle colSpan=2 align=left><B><FONT size=2 face=serif>Second quarter 2012 operating earnings</FONT></B><B><SUP><FONT style="FONT-SIZE: 9pt" face=serif>1 </FONT></SUP></B><B><FONT size=2 face=serif>were $216.3 million; $0.72 of earnings per share.</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 36pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle colSpan=2 align=left><B><FONT size=2 face=serif>Record assets under management of $367.1 billion.</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 36pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle colSpan=2 align=left><B><FONT size=2 face=serif>Second quarter 2012 total company net cash flows of $7.3 billion.</FONT></B>&nbsp;</TD></TR>

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   <P style="MARGIN-TOP: 10pt"><FONT size=2 face=serif>(Des Moines, Iowa) &#8211; Principal Financial Group, Inc. (NYSE: PFG) today announced results for second quarter</FONT>&nbsp;</P></TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>2012. The company reported operating earnings of $216.3 million for second quarter 2012, compared to $229.0</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>million for second quarter 2011. Operating earnings per diluted share (EPS) were $0.72 for second quarter 2012,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>compared to $0.71 for second quarter 2011. The company reported net income available to common stockholders of</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>$173.1 million, or $0.58 per diluted share for second quarter 2012, compared to $217.3 million, or $0.67 per diluted</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>share for second quarter 2011. Operating revenues for second quarter 2012 were $2,136.3 million compared to</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>$2,098.5 million for the same period last year.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><FONT size=2 face=serif>&#8220;The second quarter saw a continuation of the strong business fundamentals of the past few quarters.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>We expect this momentum to continue despite ongoing macro headwinds,&#8221; said Larry D. Zimpleman, chairman,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>president and chief executive officer of Principal Financial Group, Inc. &#8220;The diversification of our </FONT><I><FONT size=2 face=serif>investment</FONT></I>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><I><FONT size=2 face=serif>management plus </FONT></I><FONT size=2 face=serif>strategy allows us to generate deployable capital, even in challenging times.&#8221;</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><FONT size=2 face=serif>Added Terry Lillis, senior vice president and chief financial officer, &#8220;Our shift to a more fee-based business</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=3 align=left><FONT size=2 face=serif>model allows us to operate from a position of financial strength. We deployed $475 million of excess capital in the first</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=3 align=left><FONT size=2 face=serif>half of 2012 through a strategic international acquisition, quarterly dividends and opportunistic share repurchases. We</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=3 align=left><FONT size=2 face=serif>remain on track to deploy our targeted $800 to $900 million of excess capital, which we can return to shareholders or</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=3 align=left><FONT size=2 face=serif>invest in strategic M&amp;A as opportunities arise.&#8221;</FONT>&nbsp;</TD></TR>

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1 </FONT></SUP><FONT size=2 face=serif>Use of non-GAAP financial measures is discussed in this release after Segment Highlights</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD style="TEXT-INDENT: 2.639pt" colSpan=2 align=left><B><FONT size=2 face=serif>Key Highlights</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" align=left><FONT size=2 face=serif>Record assets under management of $367.1 billion are up 9 percent compared to the year ago quarter.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" vAlign=middle align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Strong sales in the company&#8217;s three key U.S. Retirement and Investor Services Accumulation segments in the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>second quarter, with $2.3 billion for Full Service Accumulation, $3.4 billion for Principal Funds and $492</FONT>&nbsp;</TD></TR>

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   <TD vAlign=top align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>million for Individual Annuities.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Net cash flows of $1.9 billion for Full Service Accumulation and $1.1 billion for Principal Funds.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" vAlign=middle align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Unaffiliated net cash flows of $2.1 billion contributed to record unaffiliated assets under management of $92.3</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>billion for Principal Global Investors.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Principal International reported net cash flows of $2.3 billion and record assets under management of $60.3</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>billion (excluding $8.3 billion of assets under management in our asset management joint venture in China,</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>which are not included in reported assets under management).</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle align=left><FONT size=2 face=serif>Individual Life sales of $45 million are up 6 percent over second quarter 2011.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Specialty Benefits had solid premium and fees growth of 5 percent over second quarter 2011 and a continued</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>stable loss ratio.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Strong capital position with an estimated risk based capital ratio of 440 percent at quarter-end and $1.5 billion of</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>excess capital.</FONT><SUP><FONT size=2 face=serif>2</FONT></SUP>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Paid a quarterly dividend of $0.18 per common share on June 29, 2012.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>Principal Financial Group bought back 5.4 million shares of common stock in the second quarter at an average</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>price of $25.52, bringing the year-to-date total number of shares repurchased 7.2 million.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD vAlign=middle align=left><FONT size=2 face=serif>Book value per share, excluding AOCI</FONT><SUP><FONT size=2 face=serif>3 </FONT></SUP><FONT size=2 face=serif>was $28.18, up 4 percent over second quarter 2011 and 2 percent</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>sequentially.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><B><FONT size=2 face=serif>Net Income</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>Net income available to common stockholders of $173.1 million for second quarter 2012 reflects net realized</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>capital losses of $39.2 million, which includes:</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" vAlign=middle align=left>

   <P style="MARGIN-TOP: 10pt"><FONT style="FONT-SIZE: 18pt" face=sans-serif><STRONG>&#183;</STRONG></FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></P></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left>

   <P style="MARGIN-TOP: 10pt"><FONT size=2 face=serif>$20.8 million of net losses related to sales and permanent impairments of fixed maturity securities, including</FONT>&nbsp;</P></TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>$16.8 million of losses on commercial mortgage backed securities; and</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT style="FONT-SIZE: 18pt" face=sans-serif><STRONG>&#183;</STRONG></FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=middle align=left><FONT size=2 face=serif>$2.2 million of losses on commercial mortgage whole loans.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD align=center><B><I><FONT size=2 face=serif>Segment Highlights</FONT></I></B>&nbsp;</TD></TR>

<TR>

   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><B><FONT size=2 face=serif>Retirement and Investor Services</FONT></B>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD style="TEXT-INDENT: 27.002pt" align=left><FONT size=2 face=serif>Segment operating earnings for second quarter 2012 were $141.7 million, compared to $154.7 million for</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>the same period in 2011. The Full Service Accumulation segment earnings were $72.6 million compared to $77.1</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>million in the year ago quarter, primarily due to pressure on fee growth. Principal Funds earnings were $12.2 million</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18.001pt" colSpan=2 align=left><FONT size=2 face=serif>compared to $13.2 million in second quarter 2011. The decrease was primarily due to higher expenses as we</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18.001pt" colSpan=2 align=left><FONT size=2 face=serif>continue to invest in growing the business. Individual Annuities earnings were $24.6 million compared to $29.8</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18.001pt" colSpan=2 align=left><FONT size=2 face=serif>million for second quarter 2011, which reflects spread compression and higher deferred acquisition cost amortization.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>Bank and Trust Services operating earnings were $8.6 million, compared to $9.5 million. The guaranteed businesses,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>which consist of Investment Only and Full Service Payout, earned $23.7 million in the second quarter 2012, down 6</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>percent from second quarter 2011, which is in line with the drop in average account values.</FONT>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD style="TEXT-INDENT: 27.002pt" align=left><FONT size=2 face=serif>Operating revenues for the second quarter 2012 were $1,081.2 million compared to $1,044.2 million for</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>the same period in 2011.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD colSpan=2 align=left><SUP><FONT size=2 face=serif>

   <HR align=left width="20%">

2 </FONT></SUP><FONT size=2 face=serif>Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a 350</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" colSpan=2 align=left><FONT size=2 face=serif>percent NAIC risk based capital ratio for the life company.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><SUP><FONT size=2 face=serif>3 </FONT></SUP><FONT size=2 face=serif>Accumulated Other Comprehensive Income</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Segment assets under management were $193.6 billion as of June 30, 2012, compared to $183.6 billion</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>as of June 30, 2011.</FONT>&nbsp;</TD></TR>

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   <TD>&nbsp;</TD></TR>

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   <TD align=left><B><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal Global Investors</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 54pt" align=left><FONT size=2 face=serif>Segment operating earnings for second quarter 2012 were $18.2 million, compared to $20.8 million in the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>prior year quarter, reflecting higher compensation costs from additional distribution staff and added investment</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>professionals to support growth.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 54pt" align=left><FONT size=2 face=serif>Operating revenues for second quarter were $141.1 million, compared to $136.3 million for the same</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>period in 2011.</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=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; Unaffiliated assets under management were a record $92.3 billion as of June 30, 2012, compared to $79.4</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left>

   <P><FONT size=2 face=serif>billion as of June 30, 2011.</FONT>&nbsp;</P></TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left>

   <P style="MARGIN-TOP: 12pt"><B><FONT size=2 face=serif>Principal International</FONT></B>&nbsp;</P></TD></TR>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Segment operating earnings were $36.9 million in second quarter 2012, compared to $36.3 million in the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>prior year quarter. Second quarter results were dampened $3 million due to expenses related to the closing of the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>Claritas transaction.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Operating revenues were $210.6 million for second quarter 2012, compared to $227.2 million for the same</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>period last year, primarily due to the strengthening of the U.S. dollar.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Segment assets under management were a record $60.3 billion as of June 30, 2012, up $7.3 billion over</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>$53.0 billion as of June 30, 2011.</FONT>&nbsp;</TD></TR>

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   <TD>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><B><FONT size=2 face=serif>U.S. Insurance Solutions</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Segment operating earnings for second quarter 2012 were $50.2 million, compared to $49.0 million for</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>the same period in 2011. Individual Life earnings were $27.6 million in the second quarter compared to $23.7</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>million in second quarter 2011 reflecting better mortality experience in the current quarter. Specialty Benefits</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>earnings were $22.6 million in second quarter 2012, down from $25.3 million in the same period a year ago</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>primarily due to stronger than normal net investment income in second quarter 2011. Specialty Benefits loss ratios</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>continue to be stable.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 63pt" align=left><FONT size=2 face=serif>Segment operating revenues for second quarter 2012 were $751.5 million compared to $730.7 million</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>for the same period a year ago.</FONT>&nbsp;</TD></TR>

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   <TD>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><B><FONT size=2 face=serif>Corporate</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 63.36pt" align=left><FONT size=2 face=serif>Operating losses for second quarter 2012 were $30.7 million compared to operating losses of $31.8</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><FONT size=2 face=serif>million in second quarter 2011.</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Forward looking and cautionary statements</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>This press release contains forward-looking statements, including, without limitation, statements as to operating</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and losses,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>opinions. The company does not undertake to update these statements, which are based on a number of</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>effects on the company may not be those anticipated, and actual results may differ materially from the results</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>31, 2011, and in the company&#8217;s quarterly report on Form 10-Q for the quarter ended March 31, 2012, filed by the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>company with the Securities and Exchange Commission, as updated or supplemented from time to time in</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>conditions may significantly affect the company&#8217;s ability to meet liquidity needs, access to capital and cost of capital;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>continued difficult conditions in the global capital markets and the economy generally; continued volatility or further</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>declines in the equity markets; changes in interest rates or credit spreads; the company&#8217;s investment portfolio is</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>subject to several risks that may diminish the value of its invested assets and the investment returns credited to</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>customers; the company&#8217;s valuation of securities may include methodologies, estimations and assumptions that are</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>subject to differing interpretations; the determination of the amount of allowances and impairments taken on the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>company&#8217;s investments requires estimations and assumptions that are subject to differing interpretations; gross</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>unrealized losses may be realized or result in future impairments; competition from companies that may have greater</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>company&#8217;s financial strength or credit ratings; inability to attract and retain sales representatives and develop new</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>distribution sources; international business risks; the company&#8217;s actual experience could differ significantly from its</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>pricing and reserving assumptions; the company&#8217;s ability to pay stockholder dividends and meet its obligations may</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>pattern of amortizing the company&#8217;s DPAC and other actuarial balances on its universal life-type insurance contracts,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>participating life insurance policies and certain investment contracts may change; the company may need to fund</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>deficiencies in its &#8220;Closed Block&#8221; assets that support participating ordinary life insurance policies that had a dividend</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>scale in force at the time of Principal Life&#8217;s 1998 conversion into a stock life insurance company; the company&#8217;s</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses;</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>the company&#8217;s business, and damage its reputation; results of litigation and regulatory investigations; from time to</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>time the company may become subject to tax audits, tax litigation or similar proceedings, and as a result it may</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>owe additional taxes, interest and penalties in amounts that may be material; fluctuations in foreign currency</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>exchange rates; and applicable laws and the company&#8217;s stockholder rights plan, certificate of incorporation and by-</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>laws may discourage takeovers and business combinations that some stockholders might consider in their best</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>interests.</FONT>&nbsp;</TD></TR>

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   <TD>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Use of Non-GAAP Financial Measures</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>The company uses a number of non-GAAP financial measures that management believes are useful to investors</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>because they illustrate the performance of normal, ongoing operations, which is important in understanding and</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>evaluating the company&#8217;s financial condition and results of operations. They are not, however, a substitute for U.S.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP measures to the</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>most directly comparable U.S. GAAP measure at the end of the release. The company adjusts U.S. GAAP measures</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>for items not directly related to ongoing operations. However, it is possible these adjusting items have occurred in</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>the past and could recur in future reporting periods. Management also uses non-GAAP measures for goal setting,</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>as a basis for determining employee and senior management awards and compensation, and evaluating</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>performance on a basis comparable to that used by investors and securities analysts.</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><B><FONT size=2 face=serif>Earnings Conference Call</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>On Friday, July 27, 2012 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry Zimpleman</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of results, asset quality</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>and capital adequacy during a live conference call, which can be accessed as follows:</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD vAlign=middle align=left><FONT size=2 face=serif>Via live Internet webcast. Please go to </FONT><U><FONT size=2 face=serif>www.principal.com/investor </FONT></U><FONT size=2 face=serif>at least 10-15 minutes prior to the start of</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><FONT size=2 face=serif>the call to register, and to download and install any necessary audio software.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle align=left><FONT size=2 face=serif>Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International callers)</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face=serif>approximately 10 minutes prior to the start of the call. The access code is 20811.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle align=left><FONT size=2 face=serif>Replay of the earnings call via telephone is available by dialing 855-859-2056 (U.S. and Canadian callers) or</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face=serif>404-537-3406 (International callers). The access code is 20811. This replay will be available approximately</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT style="FONT-SIZE: 18pt"><STRONG>&nbsp;</STRONG></FONT></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=top align=left><FONT size=2 face=serif>two hours after the completion of the live earnings call through the end of day August 3, 2012.</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" align=left><STRONG><FONT style="FONT-SIZE: 18pt" face=sans-serif>&#183;</FONT><FONT style="FONT-SIZE: 18pt">&nbsp;</FONT></STRONG></TD>

   <TD style="TEXT-INDENT: 0pt" vAlign=middle align=left><FONT size=2 face=serif>Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:</FONT>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD style="TEXT-INDENT: 0.001pt" vAlign=top align=left><U><FONT size=2 face=serif>www.principal.com/investor</FONT></U><FONT size=2 face=serif>.</FONT>&nbsp;</TD></TR>

<TR>

   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>The company's financial supplement and additional investment portfolio detail for second quarter 2012 is</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>currently available at </FONT><U><FONT size=2 face=serif>www.principal.com/investor</FONT></U><FONT size=2 face=serif>, and may be referred to during the call. Slides related to the</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>call will be available at </FONT><U><FONT size=2 face=serif>www.principal.com/investor </FONT></U><FONT size=2 face=serif>approximately one-half hour prior to call start time.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><B><FONT size=2 face=serif>About the Principal Financial Group</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>The Principal Financial Group</FONT><FONT size=1 face=sans-serif><SUP><FONT size=2 face=serif>&#174; </FONT></SUP></FONT><FONT size=2 face=serif>(The Principal </FONT><SUP><FONT size=2 face=serif>&#174;</FONT></SUP><FONT size=2 face=serif>)</FONT><SUP><FONT size=2 face=serif>4 </FONT></SUP><FONT size=2 face=serif>is a global investment management leader including</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>retirement services, insurance solutions and asset management. The Principal offers businesses, individuals</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>and institutional clients a wide range of financial products and services, including retirement, asset</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>management and insurance through its diverse family of financial services companies. Founded in 1879 and a</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>member of the FORTUNE 500</FONT><SUP><FONT size=2 face=serif>&#174;</FONT></SUP><FONT size=2 face=serif>, the Principal Financial Group has $367.1 billion in assets under</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 18pt" colSpan=2 align=left><FONT size=2 face=serif>management</FONT><SUP><FONT size=2 face=serif>5 </FONT></SUP><FONT size=2 face=serif>and serves some 18.2 million customers worldwide from offices in Asia, Australia, Europe,</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 17.999pt" colSpan=2 align=left><FONT size=2 face=serif>Exchange under the ticker symbol PFG. For more information, visit </FONT><U><FONT size=2 face=serif>www.principal.com</FONT></U><FONT size=2 face=serif>.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

<TR>

   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ###</FONT>&nbsp;</TD></TR>

<TR>

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   <TD colSpan=2>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><SUP><FONT size=1 face=serif>4 </FONT></SUP><FONT size=1 face=serif>&#8220;The Principal Financial Group&#8221; and &#8220;The Principal&#8221; are registered service marks of Principal Financial Services, Inc., a member of the Principal</FONT>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 0pt" colSpan=2 align=left><FONT size=1 face=serif>Financial Group.</FONT>&nbsp;</TD></TR>

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   <TD colSpan=2 align=left><SUP><FONT size=1 face=serif>5 </FONT></SUP><FONT size=1 face=serif>As of June 30, 2012.</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

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   <TD width="7%"></TD></TR>

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   <TD colSpan=2 align=center><B><I><FONT size=2 face=serif>Summary of Segment and Principal Financial Group, Inc. Results</FONT></I></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD rowSpan=2 colSpan=5 align=center><B><FONT size=3 face=serif>Operating Earnings (Loss)*</FONT></B><BR><B><I><FONT size=3 face=serif>in millions</FONT></I></B></TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD colSpan=2 align=right><I><FONT size=3 face=serif>Three Months Ended,</FONT></I>&nbsp;</TD>

   <TD colSpan=3 align=right><I><FONT size=3 face=serif>Six Months Ended,</FONT></I>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=right><B><I><FONT size=3 face=serif>Segment</FONT></I></B>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/12</FONT>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/11</FONT>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/12</FONT>&nbsp;</TD>

   <TD colSpan=2 align=right><FONT size=3 face=serif>06/30/11</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Retirement and Investor Services</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;141.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 154.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 285.3</FONT>&nbsp;</TD>

   <TD colSpan=2 align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 308.8</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Principal Global Investors</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>18.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>20.8</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>34.4</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>37.4</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Principal International</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>36.9</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>36.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>78.7</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>64.1</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>U.S. Insurance Solutions</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>50.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>49.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>100.4</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>102.4</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Corporate</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(30.7)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(31.8)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(69.5)</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(63.9)</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>Operating Earnings</FONT></I></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 216.3</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 229.0</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;429.3</FONT></B>&nbsp;</TD>

   <TD colSpan=2 align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 448.8</FONT></B>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Net realized capital gains (losses), as adjusted</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(39.2)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>23.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(49.2)</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(31.4)</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Other after-tax adjustments</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(4.0)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(35.2)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(5.5)</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(18.1)</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>Net income available to common stockholders</FONT></I></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 173.1</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 217.3</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;374.6</FONT></B>&nbsp;</TD>

   <TD colSpan=2 align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 399.3</FONT></B>&nbsp;</TD></TR>

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   <TD style="BACKGROUND-COLOR: #808080" colSpan=6>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD colSpan=5 align=center><B><FONT size=3 face=serif>Per Diluted Share</FONT></B></TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD colSpan=2 align=right><I><FONT size=3 face=serif>Three Months Ended,</FONT></I>&nbsp;</TD>

   <TD colSpan=3 align=right><I><FONT size=3 face=serif>Six Months Ended,</FONT></I>&nbsp;</TD></TR>

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   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/12</FONT>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/11</FONT>&nbsp;</TD>

   <TD align=right><FONT size=3 face=serif>06/30/12</FONT>&nbsp;</TD>

   <TD colSpan=2 align=right><FONT size=3 face=serif>06/30/11</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>Operating Earnings</FONT></I></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.72</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.71</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.42</FONT></B>&nbsp;</TD>

   <TD colSpan=2 align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39</FONT></B>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Net realized capital gains (losses), as adjusted</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.13)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.07</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.16)</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.10)</FONT>&nbsp;</TD></TR>

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   <TD align=right><I><FONT size=3 face=serif>Other after-tax adjustments</FONT></I>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.01)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.11)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.02)</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.06)</FONT>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>Net income available to common stockholders</FONT></I></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.58</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.67</FONT></B>&nbsp;</TD>

   <TD align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24</FONT></B>&nbsp;</TD>

   <TD colSpan=2 align=right><B><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.23</FONT></B>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>Weighted-average diluted common shares</FONT></I></B>&nbsp;</TD>

   <TD rowSpan=2 align=right><B><FONT size=2 face=serif>301.9</FONT></B>&nbsp;</TD>

   <TD rowSpan=2 align=right><B><FONT size=2 face=serif>323.2</FONT></B>&nbsp;</TD>

   <TD rowSpan=2 align=right><B><FONT size=2 face=serif>303.3</FONT></B>&nbsp;</TD>

   <TD rowSpan=2 colSpan=2 align=right><B><FONT size=2 face=serif>324.0</FONT></B>&nbsp;</TD></TR>

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   <TD align=right><B><I><FONT size=3 face=serif>outstanding</FONT></I></B>&nbsp;</TD></TR></TABLE></DIV>

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   <TD align=left><B><FONT size=2 face=serif>*Operating earnings versus U.S. GAAP (GAAP) net income available to common stockholders</FONT></B>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>Management uses operating earnings, which excludes the effect of net realized capital gains and losses, as adjusted, and other after-tax</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>adjustments, for goal setting, as a basis for determining employee compensation, and evaluating performance on a basis comparable to that</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>used by investors and securities analysts. Segment operating earnings are determined by adjusting U.S. GAAP net income available to</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>common stockholders for net realized capital gains and losses, as adjusted, and other after-tax adjustments the company believes are not</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>indicative of overall operating trends. Note: it is possible these adjusting items have occurred in the past and could recur in future</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>reporting periods. While these items may be significant components in understanding and assessing our consolidated financial</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>performance, management believes the presentation of segment operating earnings enhances the understanding of results of operations by</FONT>&nbsp;</TD></TR>

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   <TD align=left><FONT size=2 face=serif>highlighting earnings attributable to the normal, ongoing operations of the company&#8217;s businesses.</FONT>&nbsp;</TD></TR></TABLE></DIV>

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   <TD width="9%"></TD>

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   <TD width="6%"></TD>

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   <TD width="99%" colSpan=8 align=center><B><FONT size=2 face=serif>Principal Financial Group, Inc.</FONT></B></TD></TR>

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   <TD width="99%" colSpan=8 align=center><B><FONT size=2 face=serif>Results of Operations</FONT></B></TD></TR>

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   <TD width="99%" colSpan=8 align=center><B><FONT size=2 face=serif>(in millions)</FONT></B></TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

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   <TD width="42%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="31%" colSpan=3 align=right><B><FONT size=2 face=serif>Three Months Ended,</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="26%" colSpan=4 align=center><B><FONT size=2 face=serif>Six Months Ended,</FONT></B>&nbsp;</TD></TR>

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   <TD width="42%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="19%" colSpan=2 align=right><B><FONT size=2 face=serif>06/30/12</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="12%" align=right><B><FONT size=2 face=serif>06/30/11</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 6.648pt; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="13%" colSpan=3 align=right><B><FONT size=2 face=serif>06/30/12</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="13%" align=center><B><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp; 06/30/11</FONT></B>&nbsp;</TD></TR>

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   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Premiums and other considerations</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 681.3</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 596.2</FONT>&nbsp;</TD>

   <TD width="13%" colSpan=3 align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp; 1,358.4</FONT>&nbsp;</TD>

   <TD width="13%" align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp; 1,167.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Fees and other revenues</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>632.1</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>603.8</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>1,214.8</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,198.3</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Net investment income</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="48%" colSpan=6 align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;822.9</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>898.5</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>1,670.5</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>1,780.3</FONT></TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><I><FONT size=2 face=serif>Total operating revenues</FONT></I>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="48%" colSpan=6 align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,136.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2 face=serif>2,098.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4</FONT><FONT size=2 face=serif>,243.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT size=2 face=serif>4,146.0</FONT> </TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Benefits, claims and settlement expenses</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>1,105.2</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>1,088.4</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>2,321.4</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,108.9</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Dividends to policyholders</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>49.5</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>52.9</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=right><FONT size=2 face=serif>99.8</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 106.5</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Commissions</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>158.7</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>147.7</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>318.5</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 294.6</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Capitalization of DPAC</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>(99.4)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>(81.2)</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>(200.4)</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (163.9)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Amortization of DPAC</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>49.2</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>37.3</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>(56.2)</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 91.2</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Depreciation and amortization</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>18.3</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>16.5</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=right><FONT size=2 face=serif>41.8</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36.5</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Interest expense on corporate debt</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>30.5</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>31.7</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=right><FONT size=2 face=serif>61.6</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 62.2</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Compensation and other</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="48%" colSpan=6 align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;538.8</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>496.1</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>1,085.5</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>1,000.6</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><I><FONT size=2 face=serif>Total expenses</FONT></I>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="48%" colSpan=6 align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,850.8</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>1,789.4</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>3,672.0</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>3,536.6</FONT>&nbsp;</TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Operating earnings before tax, noncontrolling</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 18.42pt" width="42%" align=left><FONT size=2 face=serif>interest and preferred stock dividends</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>285.5</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>309.1</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>571.7</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 609.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Less:</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.359pt" width="42%" align=left><FONT size=2 face=serif>Income tax</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>58.3</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>67.5</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>122.2</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;138.7</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.359pt" width="51%" colSpan=2 align=left><FONT size=2 face=serif>Operating earnings attributable to noncontrolling</FONT>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=left>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 18.42pt" width="42%" align=left><FONT size=2 face=serif>interest</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>2.6</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>4.3</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=right><FONT size=2 face=serif>3.7</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 6.359pt" width="42%" align=left><FONT size=2 face=serif>Preferred stock dividends</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>8.3</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>8.3</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="4%" align=left>&nbsp;</TD>

   <TD width="6%" align=right><FONT size=2 face=serif>16.5</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.5</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0.42pt" width="42%" align=left><I><FONT size=2 face=serif>Operating earnings</FONT></I>&nbsp;</TD>

   <TD width="9%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="48%" colSpan=6 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 216.3</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;229.0</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;429.3</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 448.8</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Net realized capital gains (losses), as adjusted</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>(39.2)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>23.5</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>(49.2)</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (31.4)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><FONT size=2 face=serif>Other after-tax adjustments</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>(4.0)</FONT>&nbsp;</TD>

   <TD width="12%" align=right><FONT size=2 face=serif>(35.2)</FONT>&nbsp;</TD>

   <TD width="3%" align=left>&nbsp;</TD>

   <TD width="10%" colSpan=2 align=right><FONT size=2 face=serif>(5.5)</FONT>&nbsp;</TD>

   <TD width="13%" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (18.1)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 1.319pt" width="42%" align=left><I><FONT size=2 face=serif>Net income available to common stockholders</FONT></I>&nbsp;</TD>

   <TD width="9%" align=right>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" width="48%" colSpan=6 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 173.1</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;217.3</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;374.6</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 399.3</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 170.459pt" width="99%" colSpan=8 align=left><B><I><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Selected Balance Sheet Statistics</FONT></I></B></TD></TR>

<TR>

   <TD width="99%" colSpan=8>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="57%" colSpan=7 align=center><B><FONT size=2 face=serif>Period Ended,</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="19%" colSpan=2 align=right><B><FONT size=2 face=serif>06/30/12</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="19%" colSpan=3 align=right><B><FONT size=2 face=serif>12/31/11</FONT></B></TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" width="19%" colSpan=2 align=right><B><FONT size=2 face=serif>06/30/11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>Total assets (in billions)</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 152.1</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=3 align=right><FONT size=2 face=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; 147.4</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 148.3</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>Total common equity (in millions)</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 8,880.7</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=3 align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,475.9</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 9,234.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>Total common equity excluding accumulated</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="3%" align=right>&nbsp;</TD>

   <TD width="4%" align=right>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 18.419pt" width="42%" align=left><FONT size=2 face=serif>other comprehensive income (in millions)</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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;8,330.2</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=3 align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,217.9</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 8,493.5</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>End of period common shares outstanding (in</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="3%" align=right>&nbsp;</TD>

   <TD width="4%" align=right>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 18.419pt" width="42%" align=left><FONT size=2 face=serif>millions)</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=right><FONT size=2 face=serif>295.6</FONT>&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD style="TEXT-INDENT: 7.504pt" width="7%" colSpan=2 align=right><FONT size=2 face=serif>301.1</FONT>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=right><FONT size=2 face=serif>313.7</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>Book value per common share</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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;30.04</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=3 align=right><FONT size=2 face=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; 28.15</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 29.44</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD width="42%" align=left><FONT size=2 face=serif>Book value per common share excluding</FONT>&nbsp;</TD>

   <TD width="9%" align=left>&nbsp;</TD>

   <TD width="10%" align=left>&nbsp;</TD>

   <TD width="12%" align=right>&nbsp;</TD>

   <TD width="3%" align=right>&nbsp;</TD>

   <TD width="4%" align=right>&nbsp;</TD>

   <TD width="6%" align=left>&nbsp;</TD>

   <TD width="13%" align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 13.919pt" width="42%" align=left><FONT size=2 face=serif>accumulated other comprehensive income</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 28.18</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=3 align=right><FONT size=2 face=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; 27.29</FONT>&nbsp;</TD>

   <TD width="19%" colSpan=2 align=right><FONT size=2 face=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; 27.08</FONT>&nbsp;</TD></TR></TABLE></DIV>

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<TR>

   <TD width="48%"></TD>

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<TR vAlign=bottom>

   <TD colSpan=5 align=center><B><FONT size=2 face=serif>Principal Financial Group, Inc.</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD colSpan=5 align=center><B><FONT size=2 face=serif>Reconciliation of Non-GAAP Financial Measures to U.S. GAAP</FONT></B></TD></TR>

<TR vAlign=bottom>

   <TD colSpan=5 align=center><B><FONT size=2 face=serif>(in millions, except as indicated)</FONT></B></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" colSpan=2 align=center><B><FONT size=2 face=serif>Three Months Ended,</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" colSpan=2 align=center><B><FONT size=2 face=serif>Six Months Ended,</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" align=right><B><FONT size=2 face=serif>06/30/12</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" align=right><B><FONT size=2 face=serif>06/30/11</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" align=right><B><FONT size=2 face=serif>06/30/12</FONT></B>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-RIGHT: #000000 1px solid" align=right><B><FONT size=2 face=serif>06/30/11</FONT></B>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Diluted Earnings Per Common Share:</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Operating earnings</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.72</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.71</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.42</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.39</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net realized capital gains (losses)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.13)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.07</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.16)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.10)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Other after-tax adjustments</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.01)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.11)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.02)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.06)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Net income available to common stockholders</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.58</FONT>&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.67</FONT>&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.24</FONT>&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.23</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Book Value Per Common Share Excluding Accumulated</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Other Comprehensive Income:</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Book value per common share excluding accumulated other</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;comprehensive income</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28.18</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27.08</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.18</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 27.08</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net unrealized capital gains</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>3.46</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>2.55</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>3.46</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.55</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Foreign currency translation</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.44)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.32</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.44)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.32</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net unrecognized postretirement benefit obligations</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(1.16)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.51)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(1.16)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (0.51)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Book value per common share including accumulated other</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; comprehensive income</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.04</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29.44</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.04</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29.44</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Operating Revenues:</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>RIS</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,081.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,044.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,136.3</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,062.1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>PGI</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>141.1</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>136.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>279.2</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 261.6</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>PI</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>210.6</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>227.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>473.1</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 433.3</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>USIS</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>751.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>730.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>1,448.5</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,462.7</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Corporate</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(48.1)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(39.9)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(93.4)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (73.7)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Total operating revenues</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>2,136.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>2,098.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>4,243.7</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,146.0</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net realized capital gains (losses) and related adjustments</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(21.7)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>17.1</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(52.1)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (63.4)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Exited group medical insurance business</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>4.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>180.8</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>22.9</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 435.7</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Total GAAP revenues</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,118.6</FONT>&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,296.4</FONT>&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,214.5</FONT>&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,518.3</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Operating Earnings:</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>RIS</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;141.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 154.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 285.3</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 308.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>PGI</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>18.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>20.8</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>34.4</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 37.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>PI</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>36.9</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>36.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>78.7</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 64.1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>USIS</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>50.2</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>49.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>100.4</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 102.4</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Corporate</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(30.7)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(31.8)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><FONT size=2 face=serif>(69.5)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (63.9)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Total operating earnings</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>216.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>229.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>429.3</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;448.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net realized capital gains (losses) and related adjustments</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(39.2)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>23.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(49.2)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(31.4)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Other after-tax adjustments</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(4.0)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(35.2)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(5.5)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18.1)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Net income available to common stockholders</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;173.1</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 217.3</FONT>&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 374.6</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 399.3</FONT>&nbsp;</U></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Net Realized Capital Gains (Losses):</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Net realized capital gains (losses), as adjusted</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39.2)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 23.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (49.2)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (31.4)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Certain derivative and hedging-related adjustments</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>22.4</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>25.5</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>45.7</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Amortization of DPAC and sale inducement costs</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>28.7</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>14.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(4.2)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6.3)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Certain market value adjustments of embedded derivatives</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.5)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(60.0)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>1.4</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (63.8)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Capital gains (losses) distributed</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(5.6)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>3.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>1.9</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.7</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Tax impacts</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(5.1)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>12.0</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(10.0)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15.5)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Noncontrolling interest capital gains</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.1</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>19.3</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>8.2</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 36.8</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Recognition of front-end fee revenues</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.5)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.1)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.1)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Certain market value adjustments to fee revenues</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.1</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.1</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>Net realized capital gains (losses) associated with exited group</FONT>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=center>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; medical business</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.1)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>0.1</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>(0.2)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.2</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD align=left><FONT size=2 face=serif>GAAP net realized capital gains (losses)</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 0.136pt; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.2</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 37.7</FONT>&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6.5)</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20.3) </FONT></U></TD></TR>

<TR>

   <TD colSpan=5>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><B><FONT size=2 face=serif>Other After-Tax Adjustments:</FONT></B>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD>

   <TD align=left>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Exited group medical insurance businesses</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4.0)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18.8</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5.5)</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 35.9</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Contribution to PFG Foundation</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp; (19.5)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19.5)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Assumption change within the Individual Life business</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>&nbsp;&nbsp; (34.5)</FONT>&nbsp;</TD>

   <TD align=right><FONT size=2 face=serif>-</FONT>&nbsp;</TD>

   <TD align=center><FONT size=2 face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (34.5)</FONT>&nbsp;</TD></TR>

<TR vAlign=bottom>

   <TD style="TEXT-INDENT: 0pt" align=left><FONT size=2 face=serif>Total other after-tax adjustments</FONT>&nbsp;</TD>

   <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" colSpan=4 align=left><U><FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4.0)</FONT>&nbsp;&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (35.2)</FONT>&nbsp;&nbsp; <FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5.5)</FONT>&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face=serif>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (18.1)</FONT></U></TD></TR></TABLE></DIV>

<P style="MARGIN: 0px">&nbsp;</P></DIV>

</BODY>

</HTML>
[{"type": "8-K", "sequence": "1", "filename": "secondqtrer2012.htm", "description": "SECOND QUARTER 2012", "secsgml_size_bytes": 121916}]
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secondqtrer2012.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:
July 26, 2012
(Date of earliest event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-16725
42-1520346
(State or other jurisdiction (Commission file number)
(I.R.S. Employer
of incorporation)
Identification Number)
711 High Street, Des Moines, Iowa 50392
(Address of principal executive offices)
(515) 247-5111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On July 26, 2012, Principal Financial Group, Inc. publicly announced information regarding its results
of operations and financial condition for the quarter ended June 30, 2012. The text of the
announcement is included herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
99 Second Quarter 2012 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: July 26, 2012
EXHIBIT 99
Release:
On receipt, July 26, 2012
Media contact:
Adam Lackey, 515-362-0482,
lacky.adam@principal.com
Investor contact:
John Egan, 515-235-9500,
egan.john@principal.com
Principal Financial Group, Inc. Announces Second Quarter 2012 Results
·
Second quarter 2012 operating earnings
1
were $216.3 million; $0.72 of earnings per share.
·
Record assets under management of $367.1 billion.
·
Second quarter 2012 total company net cash flows of $7.3 billion.
(Des Moines, Iowa) – Principal Financial Group, Inc. (NYSE: PFG) today announced results for second quarter
2012. The company reported operating earnings of $216.3 million for second quarter 2012, compared to $229.0
million for second quarter 2011. Operating earnings per diluted share (EPS) were $0.72 for second quarter 2012,
compared to $0.71 for second quarter 2011. The company reported net income available to common stockholders of
$173.1 million, or $0.58 per diluted share for second quarter 2012, compared to $217.3 million, or $0.67 per diluted
share for second quarter 2011. Operating revenues for second quarter 2012 were $2,136.3 million compared to
$2,098.5 million for the same period last year.
"The second quarter saw a continuation of the strong business fundamentals of the past few quarters.
We expect this momentum to continue despite ongoing macro headwinds," said Larry D. Zimpleman, chairman,
president and chief executive officer of Principal Financial Group, Inc. "The diversification of our
investment
management plus
strategy allows us to generate deployable capital, even in challenging times."
Added Terry Lillis, senior vice president and chief financial officer, "Our shift to a more fee-based business
model allows us to operate from a position of financial strength. We deployed $475 million of excess capital in the first
half of 2012 through a strategic international acquisition, quarterly dividends and opportunistic share repurchases. We
remain on track to deploy our targeted $800 to $900 million of excess capital, which we can return to shareholders or
invest in strategic M&A as opportunities arise."
1
Use of non-GAAP financial measures is discussed in this release after Segment Highlights
Key Highlights
·
Record assets under management of $367.1 billion are up 9 percent compared to the year ago quarter.
·
Strong sales in the company's three key U.S. Retirement and Investor Services Accumulation segments in the
second quarter, with $2.3 billion for Full Service Accumulation, $3.4 billion for Principal Funds and $492
million for Individual Annuities.
·
Net cash flows of $1.9 billion for Full Service Accumulation and $1.1 billion for Principal Funds.
·
Unaffiliated net cash flows of $2.1 billion contributed to record unaffiliated assets under management of $92.3
billion for Principal Global Investors.
·
Principal International reported net cash flows of $2.3 billion and record assets under management of $60.3
billion (excluding $8.3 billion of assets under management in our asset management joint venture in China,
which are not included in reported assets under management).
·
Individual Life sales of $45 million are up 6 percent over second quarter 2011.
·
Specialty Benefits had solid premium and fees growth of 5 percent over second quarter 2011 and a continued
stable loss ratio.
·
Strong capital position with an estimated risk based capital ratio of 440 percent at quarter-end and $1.5 billion of
excess capital.
2
·
Paid a quarterly dividend of $0.18 per common share on June 29, 2012.
·
Principal Financial Group bought back 5.4 million shares of common stock in the second quarter at an average
price of $25.52, bringing the year-to-date total number of shares repurchased 7.2 million.
·
Book value per share, excluding AOCI
3
was $28.18, up 4 percent over second quarter 2011 and 2 percent
sequentially.
Net Income
Net income available to common stockholders of $173.1 million for second quarter 2012 reflects net realized
capital losses of $39.2 million, which includes:
·
$20.8 million of net losses related to sales and permanent impairments of fixed maturity securities, including
$16.8 million of losses on commercial mortgage backed securities; and
·
$2.2 million of losses on commercial mortgage whole loans.
Segment Highlights
Retirement and Investor Services
Segment operating earnings for second quarter 2012 were $141.7 million, compared to $154.7 million for
the same period in 2011. The Full Service Accumulation segment earnings were $72.6 million compared to $77.1
million in the year ago quarter, primarily due to pressure on fee growth. Principal Funds earnings were $12.2 million
compared to $13.2 million in second quarter 2011. The decrease was primarily due to higher expenses as we
continue to invest in growing the business. Individual Annuities earnings were $24.6 million compared to $29.8
million for second quarter 2011, which reflects spread compression and higher deferred acquisition cost amortization.
Bank and Trust Services operating earnings were $8.6 million, compared to $9.5 million. The guaranteed businesses,
which consist of Investment Only and Full Service Payout, earned $23.7 million in the second quarter 2012, down 6
percent from second quarter 2011, which is in line with the drop in average account values.
Operating revenues for the second quarter 2012 were $1,081.2 million compared to $1,044.2 million for
the same period in 2011.
2
Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a 350
percent NAIC risk based capital ratio for the life company.
3
Accumulated Other Comprehensive Income
Segment assets under management were $193.6 billion as of June 30, 2012, compared to $183.6 billion
as of June 30, 2011.
Principal Global Investors
Segment operating earnings for second quarter 2012 were $18.2 million, compared to $20.8 million in the
prior year quarter, reflecting higher compensation costs from additional distribution staff and added investment
professionals to support growth.
Operating revenues for second quarter were $141.1 million, compared to $136.3 million for the same
period in 2011.
Unaffiliated assets under management were a record $92.3 billion as of June 30, 2012, compared to $79.4
billion as of June 30, 2011.
Principal International
Segment operating earnings were $36.9 million in second quarter 2012, compared to $36.3 million in the
prior year quarter. Second quarter results were dampened $3 million due to expenses related to the closing of the
Claritas transaction.
Operating revenues were $210.6 million for second quarter 2012, compared to $227.2 million for the same
period last year, primarily due to the strengthening of the U.S. dollar.
Segment assets under management were a record $60.3 billion as of June 30, 2012, up $7.3 billion over
$53.0 billion as of June 30, 2011.
U.S. Insurance Solutions
Segment operating earnings for second quarter 2012 were $50.2 million, compared to $49.0 million for
the same period in 2011. Individual Life earnings were $27.6 million in the second quarter compared to $23.7
million in second quarter 2011 reflecting better mortality experience in the current quarter. Specialty Benefits
earnings were $22.6 million in second quarter 2012, down from $25.3 million in the same period a year ago
primarily due to stronger than normal net investment income in second quarter 2011. Specialty Benefits loss ratios
continue to be stable.
Segment operating revenues for second quarter 2012 were $751.5 million compared to $730.7 million
for the same period a year ago.
Corporate
Operating losses for second quarter 2012 were $30.7 million compared to operating losses of $31.8
million in second quarter 2011.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to operating
earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and losses,
capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and
opinions. The company does not undertake to update these statements, which are based on a number of
assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their
effects on the company may not be those anticipated, and actual results may differ materially from the results
anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute
to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec.
31, 2011, and in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2012, filed by the
company with the Securities and Exchange Commission, as updated or supplemented from time to time in
subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market
conditions may significantly affect the company's ability to meet liquidity needs, access to capital and cost of capital;
continued difficult conditions in the global capital markets and the economy generally; continued volatility or further
declines in the equity markets; changes in interest rates or credit spreads; the company's investment portfolio is
subject to several risks that may diminish the value of its invested assets and the investment returns credited to
customers; the company's valuation of securities may include methodologies, estimations and assumptions that are
subject to differing interpretations; the determination of the amount of allowances and impairments taken on the
company's investments requires estimations and assumptions that are subject to differing interpretations; gross
unrealized losses may be realized or result in future impairments; competition from companies that may have greater
financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the
company's financial strength or credit ratings; inability to attract and retain sales representatives and develop new
distribution sources; international business risks; the company's actual experience could differ significantly from its
pricing and reserving assumptions; the company's ability to pay stockholder dividends and meet its obligations may
be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the
pattern of amortizing the company's DPAC and other actuarial balances on its universal life-type insurance contracts,
participating life insurance policies and certain investment contracts may change; the company may need to fund
deficiencies in its "Closed Block" assets that support participating ordinary life insurance policies that had a dividend
scale in force at the time of Principal Life's 1998 conversion into a stock life insurance company; the company's
reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses;
changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt
the company's business, and damage its reputation; results of litigation and regulatory investigations; from time to
time the company may become subject to tax audits, tax litigation or similar proceedings, and as a result it may
owe additional taxes, interest and penalties in amounts that may be material; fluctuations in foreign currency
exchange rates; and applicable laws and the company's stockholder rights plan, certificate of incorporation and by-
laws may discourage takeovers and business combinations that some stockholders might consider in their best
interests.
Use of Non-GAAP Financial Measures
The company uses a number of non-GAAP financial measures that management believes are useful to investors
because they illustrate the performance of normal, ongoing operations, which is important in understanding and
evaluating the company's financial condition and results of operations. They are not, however, a substitute for U.S.
GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP measures to the
most directly comparable U.S. GAAP measure at the end 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 future reporting periods. Management also uses non-GAAP measures for goal setting,
as a basis for determining employee and senior management awards and compensation, and evaluating
performance on a basis comparable to that used by investors and securities analysts.
Earnings Conference Call
On Friday, July 27, 2012 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry Zimpleman
and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of results, asset quality
and capital adequacy during a live conference call, which can be accessed as follows:
·
Via live Internet webcast. Please go to
www.principal.com/investor
at least 10-15 minutes prior to the start of
the call to register, and to download and install any necessary audio software.
·
Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International callers)
approximately 10 minutes prior to the start of the call. The access code is 20811.
·
Replay of the earnings call via telephone is available by dialing 855-859-2056 (U.S. and Canadian callers) or
404-537-3406 (International callers). The access code is 20811. This replay will be available approximately
two hours after the completion of the live earnings call through the end of day August 3, 2012.
·
Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:
www.principal.com/investor
.
The company's financial supplement and additional investment portfolio detail for second quarter 2012 is
currently available at
www.principal.com/investor
, and may be referred to during the call. Slides related to the
call will be available at
www.principal.com/investor
approximately one-half hour prior to call start time.
About the Principal Financial Group
The Principal Financial Group
®
(The Principal
®
)
4
is a global investment management leader including
retirement services, insurance solutions and asset management. The Principal offers businesses, individuals
and institutional clients a wide range of financial products and services, including retirement, asset
management and insurance through its diverse family of financial services companies. Founded in 1879 and a
member of the FORTUNE 500
®
, the Principal Financial Group has $367.1 billion in assets under
management
5
and serves some 18.2 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
.
###
4
"The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal
Financial Group.
5
As of June 30, 2012.
Summary of Segment and Principal Financial Group, Inc. Results
Operating Earnings (Loss)*
in millions
Three Months Ended,
Six Months Ended,
Segment
06/30/12
06/30/11
06/30/12
06/30/11
Retirement and Investor Services
$                141.7
$             154.7
$             285.3
$           308.8
Principal Global Investors
18.2
20.8
34.4
37.4
Principal International
36.9
36.3
78.7
64.1
U.S. Insurance Solutions
50.2
49.0
100.4
102.4
Corporate
(30.7)
(31.8)
(69.5)
(63.9)
Operating Earnings
$               216.3
$            229.0
$            429.3
$          448.8
Net realized capital gains (losses), as adjusted
(39.2)
23.5
(49.2)
(31.4)
Other after-tax adjustments
(4.0)
(35.2)
(5.5)
(18.1)
Net income available to common stockholders
$               173.1
$           217.3
$            374.6
$          399.3
Per Diluted Share
Three Months Ended,
Six Months Ended,
06/30/12
06/30/11
06/30/12
06/30/11
Operating Earnings
$                 0.72
$              0.71
$              1.42
$            1.39
Net realized capital gains (losses), as adjusted
(0.13)
0.07
(0.16)
(0.10)
Other after-tax adjustments
(0.01)
(0.11)
(0.02)
(0.06)
Net income available to common stockholders
$                 0.58
$              0.67
$              1.24
$            1.23
Weighted-average diluted common shares
301.9
323.2
303.3
324.0
outstanding
*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.
Principal Financial Group, Inc.
Results of Operations
(in millions)
Three Months Ended,
Six Months Ended,
06/30/12
06/30/11
06/30/12
06/30/11
Premiums and other considerations
$        681.3
$        596.2
$     1,358.4
$     1,167.4
Fees and other revenues
632.1
603.8
1,214.8
1,198.3
Net investment income
822.9
898.5
1,670.5
1,780.3
Total operating revenues
2,136.3
2,098.5                   4
,243.7
4,146.0
Benefits, claims and settlement expenses
1,105.2
1,088.4
2,321.4
2,108.9
Dividends to policyholders
49.5
52.9
99.8
106.5
Commissions
158.7
147.7
318.5
294.6
Capitalization of DPAC
(99.4)
(81.2)
(200.4)
(163.9)
Amortization of DPAC
49.2
37.3
(56.2)
91.2
Depreciation and amortization
18.3
16.5
41.8
36.5
Interest expense on corporate debt
30.5
31.7
61.6
62.2
Compensation and other
538.8
496.1
1,085.5
1,000.6
Total expenses
1,850.8
1,789.4
3,672.0
3,536.6
Operating earnings before tax, noncontrolling
interest and preferred stock dividends
285.5
309.1
571.7
609.4
Less:
Income tax
58.3
67.5
122.2
138.7
Operating earnings attributable to noncontrolling
interest
2.6
4.3
3.7
5.4
Preferred stock dividends
8.3
8.3
16.5
16.5
Operating earnings
$         216.3
$        229.0
$         429.3
$        448.8
Net realized capital gains (losses), as adjusted
(39.2)
23.5
(49.2)
(31.4)
Other after-tax adjustments
(4.0)
(35.2)
(5.5)
(18.1)
Net income available to common stockholders
$        173.1
$      217.3
$        374.6
$        399.3
Selected Balance Sheet Statistics
Period Ended,
06/30/12
12/31/11
06/30/11
Total assets (in billions)
$                            152.1
$                           147.4
$                            148.3
Total common equity (in millions)
$                         8,880.7
$                        8,475.9
$                         9,234.8
Total common equity excluding accumulated
other comprehensive income (in millions)
$                         8,330.2
$                        8,217.9
$                         8,493.5
End of period common shares outstanding (in
millions)
295.6
301.1
313.7
Book value per common share
$                            30.04
$                           28.15
$                            29.44
Book value per common share excluding
accumulated other comprehensive income
$                            28.18
$                           27.29
$                            27.08
Principal Financial Group, Inc.
Reconciliation of Non-GAAP Financial Measures to U.S. GAAP
(in millions, except as indicated)
Three Months Ended,
Six Months Ended,
06/30/12
06/30/11
06/30/12
06/30/11
Diluted Earnings Per Common Share:
Operating earnings
$                     0.72
$                0.71
$                1.42
$              1.39
Net realized capital gains (losses)
(0.13)
0.07
(0.16)
(0.10)
Other after-tax adjustments
(0.01)
(0.11)
(0.02)
(0.06)
Net income available to common stockholders
$                     0.58
$                0.67
$                1.24
$              1.23
Book Value Per Common Share Excluding Accumulated
Other Comprehensive Income:
Book value per common share excluding accumulated other
comprehensive income
$                   28.18
$              27.08
$              28.18
$           27.08
Net unrealized capital gains
3.46
2.55
3.46
2.55
Foreign currency translation
(0.44)
0.32
(0.44)
0.32
Net unrecognized postretirement benefit obligations
(1.16)
(0.51)
(1.16)
(0.51)
Book value per common share including accumulated other
comprehensive income
$                  30.04
$             29.44
$             30.04
$           29.44
Operating Revenues:
RIS
$                1,081.2
$           1,044.2
$           2,136.3
$        2,062.1
PGI
141.1
136.3
279.2
261.6
PI
210.6
227.2
473.1
433.3
USIS
751.5
730.7
1,448.5
1,462.7
Corporate
(48.1)
(39.9)
(93.4)
(73.7)
Total operating revenues
2,136.3
2,098.5
4,243.7
4,146.0
Net realized capital gains (losses) and related adjustments
(21.7)
17.1
(52.1)
(63.4)
Exited group medical insurance business
4.0
180.8
22.9
435.7
Total GAAP revenues
$                2,118.6
$           2,296.4
$           4,214.5
$        4,518.3
Operating Earnings:
RIS
$                   141.7
$            154.7
$              285.3
$          308.8
PGI
18.2
20.8
34.4
37.4
PI
36.9
36.3
78.7
64.1
USIS
50.2
49.0
100.4
102.4
Corporate
(30.7)
(31.8)
(69.5)
(63.9)
Total operating earnings
216.3
229.0
429.3
448.8
Net realized capital gains (losses) and related adjustments
(39.2)
23.5
(49.2)
(31.4)
Other after-tax adjustments
(4.0)
(35.2)
(5.5)
(18.1)
Net income available to common stockholders
$                   173.1
$              217.3
$              374.6
$          399.3
Net Realized Capital Gains (Losses):
Net realized capital gains (losses), as adjusted
$                  (39.2)
$                23.5
$             (49.2)
$         (31.4)
Certain derivative and hedging-related adjustments
22.4
25.5
45.7
47.8
Amortization of DPAC and sale inducement costs
28.7
14.3
(4.2)
(6.3)
Certain market value adjustments of embedded derivatives
(0.5)
(60.0)
1.4
(63.8)
Capital gains (losses) distributed
(5.6)
3.0
1.9
11.7
Tax impacts
(5.1)
12.0
(10.0)
(15.5)
Noncontrolling interest capital gains
0.1
19.3
8.2
36.8
Recognition of front-end fee revenues
(0.5)
(0.1)
(0.1)
0.1
Certain market value adjustments to fee revenues
-
0.1
-
0.1
Net realized capital gains (losses) associated with exited group
medical business
(0.1)
0.1
(0.2)
0.2
GAAP net realized capital gains (losses)
$                      0.2
$                37.7
$               (6.5)
$          (20.3)
Other After-Tax Adjustments:
Exited group medical insurance businesses
$                    (4.0)
$                18.8
$               (5.5)
$            35.9
Contribution to PFG Foundation
-
(19.5)
-
(19.5)
Assumption change within the Individual Life business
-
(34.5)
-
(34.5)
Total other after-tax adjustments
$                    (4.0)
$             (35.2)
$               (5.5)
$           (18.1)