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: MAY 5, 2008
                        (Date of earliest event reported)



                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)


         DELAWARE                     1-16725                42-1520346
(State or other jurisdiction    (Commission file number)  (I.R.S. Employer
    of incorporation)                                   Identification Number)


                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17  CFR
    240.14a-12)  [ ]  Pre-commencement  communications  pursuant  to  Rule
    14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

                               ------------------


                                   1
<PAGE>


ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 5, 2008,  Principal Financial Group, Inc. publicly announced  information
regarding  its results of  operations  and  financial  condition for the quarter
ended March 31,  2008.  The text of the  announcement  is  included  herewith as
Exhibit 99.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99    First Quarter 2008 Earnings Release


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    PRINCIPAL FINANCIAL GROUP, INC.


                                    By:     /S/ MICHAEL H. GERSIE
                                            -----------------------------------
                                    Name:   Michael H. Gersie
                                    Title:  Executive Vice President and Chief
                                            Financial Officer

Date:    May 6, 2008


                                       2
<PAGE>

                                                                      EXHIBIT 99

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


       PRINCIPAL FINANCIAL GROUP, INC. REPORTS FIRST QUARTER 2008 RESULTS

Des Moines, IA (May 5, 2008) - Principal Financial Group, Inc. (NYSE: PFG) today
announced net income available to common stockholders for the three months ended
March 31, 2008, of $174.2 million, or $0.67 per diluted share compared to $257.1
million,  or $0.95 per diluted  share for the three months ended March 31, 2007.
The company  reported  operating  earnings of $241.3  million for first  quarter
2008, compared to $236.8 million for first quarter 2007.  Operating earnings per
diluted share (EPS) for first quarter 2008 were $0.92  compared to $0.87 for the
same period in 2007.  Operating  revenues for first  quarter 2008 were  $2,639.0
million compared to $2,623.7 million for the same period last year.(1)

"In  light of a highly  difficult  operating  environment,  we view six  percent
growth  in EPS  from  first  quarter  2007  as a very  solid  result,  one  that
demonstrates  the benefit of a diverse  portfolio of businesses,"  said Larry D.
Zimpleman,  president  and chief  executive  officer.  "Principal  International
delivered  its second best  earnings  quarter,  as did Life and  Health.  Strong
results for these  segments more than offset the impact of poor equity  markets,
which put downward pressure on our fee-based businesses, and volatile conditions
in the  CMBS(2)  market,  which  drove  losses in the spread and  securitization
business.  While  earnings  growth for the quarter  fell short of our  long-term
expectations,  key sales,  retention  and AUM measures  indicate that our strong
organic growth trends remain intact,  as does our ability to achieve our EPS and
return on equity targets over the long-term."

Additional highlights for first quarter 2008 include:

o    Total company assets under  management  (AUM) of $304.2 billion as of March
     31,  2008,  an  increase  of 13 percent  from a year ago,  including  $86.6
     billion of third party assets for Principal Global  Investors,  an increase
     of 35  percent(3),  and  a  record  $30.2  billion  of  AUM  for  Principal
     International, an increase of 37 percent.

o    Record full service  accumulation sales of $3.5 billion,  an increase of 57
     percent  compared  to the same period a year ago,  and record full  service
     accumulation net cash flows of $3.0 billion, an increase of 126 percent.

"Full service  accumulation's  record sales reflect the advantage we have in the
marketplace  with Total  Retirement  SuiteSM,  and increasing  momentum with our
distribution  alliances.  Our  sales  success,  coupled  with  continued  strong
retention,  drove  record  full  service  accumulation  net  cash  flows,"  said
Zimpleman.  "Principal  Global  Investors'  fee mandate  business  continued  to
perform,  as well,  with 13 percent  growth in  earnings,  reflecting  continued
strong growth in assets under management. Principal Global Investors was awarded


                                       3
<PAGE>

more than $5 billion of non-affiliated  assets during the quarter,  contributing
to  continued  strong net cash flows - $3.4  billion in the first  quarter,  and
nearly $15 billion over the trailing twelve months."

"Regardless  of  operating   conditions,   we  remain  committed  to  delivering
dependable  earnings growth.  Over the long-term,  that means aligning  expenses
with  revenues.  It also means  ongoing  investment  in our  portfolio  of asset
management, asset accumulation and employee benefits solutions," said Zimpleman.
"In the first quarter, we continued to expand our range of investment offerings,
doubling our portfolio of target-date  lifecycle mutual funds. We also continued
to invest in retirement  income  management  and workplace  benefits  consulting
capabilities,  given our focus on  long-term  asset  capture.  We believe  these
investments  will  continue  to pay off - in  terms  of new  business,  customer
loyalty and retention, and ultimately,  outstanding share price appreciation for
our shareholders."

NET INCOME
Net income  available  to common  stockholders  of $174.2  million  reflects net
realized/unrealized  capital  losses of $74.7  million,  which  includes:  $28.8
million of losses related to impairments of fixed maturity securities (including
$6.8  million  related to  subprime);  $15.6  million of  impairments  on equity
securities;  and unrealized capital losses of $22.0 million,  primarily from the
mark to market of credit default swaps.  Net income also includes a $7.6 million
gain from other after-tax  adjustments due to a change in estimated loss related
to a prior year legal contingency.

                               SEGMENT HIGHLIGHTS

U.S. ASSET ACCUMULATION
Segment operating earnings for first quarter 2008 were $139.1 million,  compared
to $154.7 million for the same period in 2007.  The decline in segment  earnings
primarily  reflects results for the full service  accumulation  business,  which
generated  $68.1 million of earnings in first  quarter  2008,  compared to $82.4
million in first quarter  2007.  Several items  impacted  comparability  between
periods.  First  quarter  2007  earnings  benefited  from a tax  true-up of $4.4
million and a reserve  true-up of $2.0  million  after tax.  First  quarter 2008
earnings  were  dampened by: $4.6 million  after-tax due to a change from a year
ago  in  the  mix  of   investments  in  401(k)  plans,   including   growth  in
non-proprietary  and ESOP  assets,  which  generate  lower  revenues  but higher
returns on equity;  $3.2  million due to lower income tax  benefits,  reflecting
both a change in  investment  mix and equity market  declines;  and $2.6 million
after-tax,  primarily due to the impact of market value  adjustments on customer
withdrawals,  resulting  from the  declining  interest  rate  environment.  Full
service  accumulation account values were $99.4 billion as of March 31, 2008, up
5 percent from $94.9 billion as of March 31, 2007. On a mean average basis, full
service  accumulation  account values were up 7 percent  comparing first quarter
2008 to first quarter 2007.

Operating  revenues for the first  quarter  were  $1,204.7  million  compared to
$1,179.1 million for the same period in 2007. Double-digit revenue growth in the
mutual funds,  individual annuities,  and bank and trust services businesses was
partially offset by lower single premium group annuity sales in the full service
payout business.  The single premium group annuity  product,  which is typically
used to fund  defined  benefit plan  terminations,  tends to vary from period to
period.

                                       4
<PAGE>

Segment  assets under  management  were $170.9  billion as of March 31, 2008, an
increase of 2 percent from $167.2 billion as of March 31, 2007.

GLOBAL ASSET MANAGEMENT
Segment operating earnings for first quarter 2008 were $2.7 million, compared to
$23.7  million for the same period in 2007.  Fee  mandate  business  earnings of
$18.6 million in first quarter 2008,  which improved 13 percent from a year ago,
were substantially  offset by losses in the spread and securitization  business,
reflecting   unprecedented  conditions  in  the  CMBS  market.  The  spread  and
securitization  business lost $15.9  million in first quarter 2008,  compared to
$7.3 million of earnings in first quarter 2007, due to the extreme volatility of
credit spreads and the resulting  mark to market losses on commercial  mortgages
held in inventory by the joint venture securitization company.

Operating revenues for first quarter 2008 were $118.3 million compared to $134.8
million for the same period in 2007. Unfavorable  mark-to-market  adjustments to
the CMBS portfolio in the joint venture  securitization company more than offset
a 17 percent increase in revenues for the fee mandate business.

Third party assets under  management were $86.6 billion as of March 31, 2008, an
increase of 35 percent from $64.3 billion as of March 31, 2007.

INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION
Segment operating earnings for first quarter 2008 were $31.7 million compared to
$19.3 million for the same period in 2007, primarily reflecting strong growth in
assets under  management.  The increase also  reflects  benefits of $5.8 million
after-tax:  from  favorable  currency  exchange  rates in Brazil and Chile;  and
higher yields on invested assets,  due to unusually high first quarter inflation
in Chile.

Operating revenues were $183.7 million for the first quarter, compared to $141.3
million for the same period in 2007, reflecting higher yields on invested assets
in Chile,  favorable  currency  translation  in Brazil and Chile,  and continued
growth in assets under management.

Segment  assets under  management  were a record  $30.2  billion as of March 31,
2008, an increase of 37 percent from $22.0 billion as of March 31, 2007.

LIFE AND HEALTH INSURANCE
Segment operating  earnings for first quarter 2008 were $79.2 million,  compared
to $45.5 million for the same period in 2007.  Individual Life division earnings
were $20.6  million,  compared to $15.4  million  for first  quarter  2007.  The
increase  from a year ago  reflects  a return to more  normal  lapses  and death
claims,  as well as growth in the block of business.  Health  division  earnings
were a record $34.7 million for first  quarter  2008,  compared to $11.8 million
for first  quarter 2007.  First quarter 2008 earnings  benefited by $6.8 million
after-tax  due to the  favorable  development  of year-end  2007  claims.  First
quarter  2007  earnings  were  dampened by $15.0  million  after-tax  due to the
unfavorable  development of year-end 2006 claims.  Specialty  Benefits  division
earnings  were $23.9  million,  an increase of $5.6 million  from first  quarter
2007. The increase


                                       5
<PAGE>

reflects  growth in the  business  and a favorable  reserve  adjustment  of $4.2
million after-tax in the individual disability line.

Operating  revenues were $1,187.6 million for the first quarter, a decrease of 2
percent from the same period in 2007.  Specialty  Benefits  continued to achieve
growth,  with  revenues  increasing 5 percent from a year ago.  Health  revenues
decreased 10 percent, primarily due to a decrease in covered members. Individual
Life  revenues  increased  3  percent,  reflecting  solid  growth  in  fee-based
Universal Life and Variable Universal Life products.

CORPORATE AND OTHER
Operating  losses  for  first  quarter  2008 were  $11.4  million,  compared  to
operating losses of $6.4 million for the same period in 2007. First quarter 2008
results  included  favorable  state  tax  items of  $13.7  million,  which  were
partially  offset by $4.3  million  of real  estate  partnership  losses.  First
quarter 2007 results  reflected  higher invested  assets,  and higher  operating
earnings from joint venture real estate sales activity.

FORWARD LOOKING AND CAUTIONARY STATEMENTS
This press  release  contains  forward-looking  statements,  including,  without
limitation,  statements  as to sales  targets,  sales and earnings  trends,  and
management's  beliefs,  expectations,  goals and opinions.  The company does not
undertake to update these statements, which are based on a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate.  Future
events and their effects on the company may not be those anticipated, and actual
results  may  differ   materially   from  the  results   anticipated   in  these
forward-looking  statements.  The risks,  uncertainties  and factors  that could
cause or contribute to such material  differences are discussed in the company's
annual  report on Form 10-K for the year ended  December 31, 2007,  filed by the
company  with  the   Securities  and  Exchange   Commission.   These  risks  and
uncertainties include,  without limitation:  competitive factors;  volatility of
financial  markets;  decrease in ratings;  interest rate  changes;  inability to
attract and retain sales representatives;  international business risks; foreign
currency  exchange  rate  fluctuations;  a pandemic,  terrorist  attack or other
catastrophic  event;  default  of  the  company's  re-insurers;  and  investment
portfolio risks.

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
At 9:00 A.M. (CST) tomorrow, Chairman J. Barry Griswell, President and CEO Larry
D.  Zimpleman,  and  Executive  Vice  President  and CFO Mike Gersie will lead a
discussion  of results,  asset  quality,  and the company's  longer-term  growth
expectations,  during a live conference call. Parties interested in listening to
the  conference  call live may access  the  webcast  on the  company's  Investor
Relations (IR) website (www.principal.com/investor) or by dialing (800) 374-1609
(U.S.  callers)  or (706)  643-7701  (International  callers)  approximately  10
minutes prior to the start of the call.  To access the call,  leader name is Tom
Graf. Listeners can access an audio replay of

                                       6
<PAGE>

the call on the IR website,  or by calling (800)  642-1687 (US callers) or (706)
645-9291  (International  callers).  The access code for the replay is 38445018.
Replays will be available  through May 13, 2008.  The financial  supplement  and
additional  information  on the  company's  investment  portfolio  are currently
available on our website and will be referred to during the conference call.

ABOUT THE PRINCIPAL FINANCIAL GROUP
The Principal  Financial Group(R) (The Principal (R))(4) is a leader in offering
businesses,  individuals  and  institutional  clients A wide range of  financial
products and services,  including retirement and investment  services,  life and
health insurance,  and banking through its diverse family of financial  services
companies. A member of the Fortune 500, the Principal Financial Group has $304.2
billion in assets under  management(5)  and serves some 18.8  million  customers
worldwide from offices in Asia, Australia,  Europe, Latin America and the United
States. Principal Financial Group, Inc. is traded on the New York Stock Exchange
under the ticker symbol PFG. For more information, visit WWW.PRINCIPAL.COM.

                                       ###

                                       7
<PAGE>

<TABLE>
<CAPTION>

SUMMARY OF SEGMENT AND PRINCIPAL FINANCIAL GROUP, INC. RESULTS

                                                                   OPERATING EARNINGS (LOSS)* IN
                                                                           MILLIONS
                                                                -------------------------------------
                                                                        THREE MONTHS ENDED,
<S>                                                             <C>                 <C>
                                                       SEGMENT         3/31/08            3/31/07
--------------------------------------------------------------- ------------------- -----------------
                                       U.S. ASSET ACCUMULATION  $           139.1   $         154.7
--------------------------------------------------------------- ------------------- -----------------
                                       GLOBAL ASSET MANAGEMENT                2.7              23.7
--------------------------------------------------------------- ------------------- -----------------
               INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION               31.7              19.3
--------------------------------------------------------------- ------------------- -----------------
                                     LIFE AND HEALTH INSURANCE               79.2              45.5
--------------------------------------------------------------- ------------------- -----------------
                                           CORPORATE AND OTHER              (11.4)             (6.4)
--------------------------------------------------------------- ------------------- -----------------
                                            OPERATING EARNINGS              241.3             236.8
--------------------------------------------------------------- ------------------- -----------------
                               NET REALIZED/UNREALIZED CAPITAL
                                    GAINS(LOSSES), AS ADJUSTED              (74.7)             20.3
--------------------------------------------------------------- ------------------- -----------------
                                   OTHER AFTER-TAX ADJUSTMENTS                7.6               0.0
--------------------------------------------------------------- ------------------- -----------------
                   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $           174.2  $          257.1
--------------------------------------------------------------- ------------------- -----------------

                                                                         PER DILUTED SHARE
                                                                -------------------------------------
                                                                        THREE MONTHS ENDED,
                                                                ------------------- -----------------
                                                                       3/31/08            3/31/07
                                                                ------------------- -----------------
                                            OPERATING EARNINGS  $             0.92    $         0.87
--------------------------------------------------------------- ------------------- -----------------
                               NET REALIZED/UNREALIZED CAPITAL
                                    GAINS(LOSSES), AS ADJUSTED               (0.28)             0.08
--------------------------------------------------------------- ------------------- -----------------
                                   OTHER AFTER-TAX ADJUSTMENTS                0.03              0.00
--------------------------------------------------------------- ------------------- -----------------
                   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $             0.67    $         0.95
--------------------------------------------------------------- ------------------- -----------------
                        WEIGHTED-AVERAGE DILUTED COMMON SHARES
                                                   OUTSTANDING              261.3             270.9
--------------------------------------------------------------- ------------------- -----------------

</TABLE>








*OPERATING  EARNINGS  VERSUS  U.S.  GAAP (GAAP) NET INCOME  AVAILABLE  TO COMMON
STOCKHOLDERS  Management uses operating  earnings,  which excludes the effect of
net  realized/unrealized  capital  gains  and  losses,  as  adjusted,  and other
after-tax  adjustments,  for goal setting,  as a basis for determining  employee
compensation,  and for evaluating performance on a basis comparable to that used
by investors and securities analysts.  Segment operating earnings are determined
by  adjusting  U.S.  GAAP net income  available to common  stockholders  for net
realized/unrealized  capital gains and losses, as adjusted,  and other after-tax
adjustments the company believes are not indicative of overall operating trends.
Note: 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 the company's  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.


                                       8
<PAGE>

<TABLE>
<CAPTION>


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

                                                                                    THREE MONTHS ENDED,
                                                                             ----------------- ----------------
                                                                                 3/31/08           3/31/07
                                                                             ----------------- ----------------
  <S>                                                                        <C>                <C>
   Premiums and other considerations                                         $      1,053.0     $    1,107.7
   Fees and other revenues                                                            613.4            592.5
   Net investment income                                                              960.3            923.2
   Net realized/unrealized capital gains (losses)                                    (126.0)            37.6
                                                                             ----------------- ----------------
   TOTAL REVENUES                                                                   2,500.7          2,661.0
                                                                             ----------------- ----------------
   Benefits, claims, and settlement expenses                                        1,472.0          1,498.0
   Dividends to policyholders                                                          70.8             74.0
   Operating expenses                                                                 745.9            754.7
                                                                             ----------------- ----------------
   TOTAL EXPENSES                                                                   2,288.7          2,326.7
                                                                             ----------------- ----------------
   Income before income taxes                                                         212.0            334.3
   Income taxes                                                                        29.6             69.0
                                                                             ----------------- ----------------
   NET INCOME                                                                         182.4            265.3
   Preferred stock dividends                                                            8.2              8.2
                                                                             ----------------- ----------------
   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS                               $        174.2     $      257.1

   Less:
   Net realized/unrealized capital gains (losses), as adjusted                        (74.7)            20.3
   Other after-tax adjustments                                                          7.6              0.0
                                                                             ----------------- ----------------
   OPERATING EARNINGS                                                        $        241.3     $      236.8
                                                                             ================= ================
</TABLE>

<TABLE>
<CAPTION>


                        SELECTED BALANCE SHEET STATISTICS

                                                     ------------------------------------------------------------
                                                                            PERIOD ENDED,
                                                     ------------------------------------------------------------
                                                           3/31/08              12/31/07            3/31/07
                                                     -------------------- --------------------- -----------------
<S>                                                  <C>                    <C>                   <C>
  Total assets (in billions)                         $           152.0      $       154.5         $    146.6
  Total common equity (in millions)                  $         6,300.1      $     6,879.7         $  7,565.0
  Total common equity excluding accumulated other
       comprehensive income (in millions)            $         6,659.2      $     6,459.5         $  6,667.3
  End of period common shares outstanding
       (in millions)                                             258.6              259.1              267.4
  Book value per common share                        $            24.36     $        26.55        $     28.29
  Book value per common share excluding
      accumulated other comprehensive income         $            25.75     $        24.93        $     24.93

</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>



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

                                                                                        THREE MONTHS ENDED,
                                                                                   -------------- ---------------
                                                                                      3/31/08        3/31/07
                                                                                   -------------- ---------------
<S>                                                                                        <C>             <C>
DILUTED EARNINGS PER COMMON SHARE:
Operating Earnings                                                                         0.92            0.87
Net realized/unrealized capital gains (losses)                                            (0.28)           0.08
Other after-tax adjustments                                                                0.03            0.00
                                                                                   -------------- ---------------
Net income available to common stockholders                                                0.67            0.95
                                                                                   ============== ===============

BOOK VALUE PER COMMON SHARE EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME:
Book value per common share excluding accumulated other comprehensive income              25.75           24.93
Net unrealized capital gains (losses)                                                     (2.01)           3.41
Foreign currency translation                                                               0.38           (0.10)
Net unrecognized post-retirement benefit obligations                                       0.24            0.05
                                                                                   -------------- ---------------
Book value per common share including accumulated other comprehensive income              24.36           28.29
                                                                                   ============== ===============
OPERATING REVENUES:
USAA                                                                                   1,204.7         1,179.1
GAM                                                                                      118.3           134.8
IAMA                                                                                     183.7           141.3
Life and Health                                                                        1,187.6         1,212.4
Corporate and Other                                                                      (55.3)          (43.9)
                                                                                   -------------- ---------------
Total operating revenues                                                               2,639.0         2,623.7
Add:  Net realized/unrealized capital gains (losses) and related adjustments            (138.3)           37.2
Less:  Operating revenues from discontinued real estate                                    0.0            (0.1)
                                                                                   -------------- ---------------
Total GAAP revenues                                                                    2,500.7         2,661.0
                                                                                   ============== ===============
OPERATING EARNINGS:
USAA                                                                                     139.1           154.7
GAM                                                                                        2.7            23.7
IAMA                                                                                      31.7            19.3
Life and Health                                                                           79.2            45.5
Corporate and Other                                                                      (11.4)           (6.4)
                                                                                   -------------- ---------------
Total operating earnings                                                                 241.3           236.8
Net realized/unrealized capital gains (losses)                                           (74.7)           20.3
Other after-tax adjustments                                                                7.6             0.0
                                                                                   -------------- ---------------
Net income available to common stockholders                                              174.2           257.1
                                                                                   ============== ===============
NET REALIZED/UNREALIZED CAPITAL GAINS (LOSSES):
Net realized/unrealized capital gains, as adjusted                                       (74.7)           20.3
Add:
Periodic settlements and accruals on non-hedge derivatives                                 8.8             0.0
Amortization of DPAC and sale inducement costs                                           (13.5)            0.7
Capital gains distributed                                                                 (9.3)            2.0
Tax impacts                                                                              (34.1)           12.9
Minority interest capital gains                                                           (6.7)            1.3
Less related fee adjustments:
Unearned front-end fee income                                                              0.0             0.4
Certain market value adjustments to fee revenues                                          (3.5)           (0.8)
                                                                                   -------------- ---------------
GAAP net realized/unrealized capital gains                                              (126.0)           37.6
                                                                                   ============== ===============
OTHER AFTER TAX ADJUSTMENTS:
Change in estimated loss related to a prior year legal contingency                         7.6             0.0
                                                                                   -------------- ---------------
Total other after-tax adjustments                                                          7.6             0.0
                                                                                   ============== ===============
</TABLE>



                                       10
<PAGE>

(1)  Use of non-GAAP  financial  measures is  discussed  in this  release  after
     Segment Highlights.
(2)  Commercial mortgage-backed securities
(3)  The increase from first quarter 2007 includes  $13.7 billion of AUM related
     to the  company's  third  quarter  2007  acquisition  of  Morley  Financial
     Services, Inc.
(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 March 31, 2008


                                       11
<PAGE>
[{"type": "8-K", "sequence": "1", "filename": "final1stqtrer08.txt", "description": "FORM 8-K", "secsgml_size_bytes": 36921}]
{"company-data": {"conformed-name": "PRINCIPAL FINANCIAL GROUP INC", "cik": "0001126328", "assigned-sic": "6321", "irs-number": "421520346", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-16725", "film-number": "08804644"}, "business-address": {"street1": "711 HIGH STREET", "city": "DES MOINES", "state": "IA", "zip": "50392-0300", "phone": "5152475111"}, "mail-address": {"street1": "711 HIGH STREET", "city": "DES MOINES", "state": "IA", "zip": "50392-0300"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                           Date of Report: MAY 5, 2008
                        (Date of earliest event reported)

                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

         DELAWARE                     1-16725                42-1520346
(State or other jurisdiction    (Commission file number)  (I.R.S. Employer
    of incorporation)                                   Identification Number)

                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17  CFR
    240.14a-12)  [ ]  Pre-commencement  communications  pursuant  to  Rule
    14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

                               ------------------

                                   1
ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 5, 2008,  Principal Financial Group, Inc. publicly announced  information
regarding  its results of  operations  and  financial  condition for the quarter
ended March 31,  2008.  The text of the  announcement  is  included  herewith as
Exhibit 99.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

99    First Quarter 2008 Earnings Release

                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    PRINCIPAL FINANCIAL GROUP, INC.

                                    By:     /S/ MICHAEL H. GERSIE
                                            -----------------------------------
                                    Name:   Michael H. Gersie
                                    Title:  Executive Vice President and Chief
                                            Financial Officer

Date:    May 6, 2008

                                       2
EXHIBIT 99

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

       PRINCIPAL FINANCIAL GROUP, INC. REPORTS FIRST QUARTER 2008 RESULTS

Des Moines, IA (May 5, 2008) - Principal Financial Group, Inc. (NYSE: PFG) today
announced net income available to common stockholders for the three months ended
March 31, 2008, of $174.2 million, or $0.67 per diluted share compared to $257.1
million,  or $0.95 per diluted  share for the three months ended March 31, 2007.
The company  reported  operating  earnings of $241.3  million for first  quarter
2008, compared to $236.8 million for first quarter 2007.  Operating earnings per
diluted share (EPS) for first quarter 2008 were $0.92  compared to $0.87 for the
same period in 2007.  Operating  revenues for first  quarter 2008 were  $2,639.0
million compared to $2,623.7 million for the same period last year.(1)

"In  light of a highly  difficult  operating  environment,  we view six  percent
growth  in EPS  from  first  quarter  2007  as a very  solid  result,  one  that
demonstrates  the benefit of a diverse  portfolio of businesses,"  said Larry D.
Zimpleman,  president  and chief  executive  officer.  "Principal  International
delivered  its second best  earnings  quarter,  as did Life and  Health.  Strong
results for these  segments more than offset the impact of poor equity  markets,
which put downward pressure on our fee-based businesses, and volatile conditions
in the  CMBS(2)  market,  which  drove  losses in the spread and  securitization
business.  While  earnings  growth for the quarter  fell short of our  long-term
expectations,  key sales,  retention  and AUM measures  indicate that our strong
organic growth trends remain intact,  as does our ability to achieve our EPS and
return on equity targets over the long-term."

Additional highlights for first quarter 2008 include:

o    Total company assets under  management  (AUM) of $304.2 billion as of March
     31,  2008,  an  increase  of 13 percent  from a year ago,  including  $86.6
     billion of third party assets for Principal Global  Investors,  an increase
     of 35  percent(3),  and  a  record  $30.2  billion  of  AUM  for  Principal
     International, an increase of 37 percent.

o    Record full service  accumulation sales of $3.5 billion,  an increase of 57
     percent  compared  to the same period a year ago,  and record full  service
     accumulation net cash flows of $3.0 billion, an increase of 126 percent.

"Full service  accumulation's  record sales reflect the advantage we have in the
marketplace  with Total  Retirement  SuiteSM,  and increasing  momentum with our
distribution  alliances.  Our  sales  success,  coupled  with  continued  strong
retention,  drove  record  full  service  accumulation  net  cash  flows,"  said
Zimpleman.  "Principal  Global  Investors'  fee mandate  business  continued  to
perform,  as well,  with 13 percent  growth in  earnings,  reflecting  continued
strong growth in assets under management. Principal Global Investors was awarded

                                       3
more than $5 billion of non-affiliated  assets during the quarter,  contributing
to  continued  strong net cash flows - $3.4  billion in the first  quarter,  and
nearly $15 billion over the trailing twelve months."

"Regardless  of  operating   conditions,   we  remain  committed  to  delivering
dependable  earnings growth.  Over the long-term,  that means aligning  expenses
with  revenues.  It also means  ongoing  investment  in our  portfolio  of asset
management, asset accumulation and employee benefits solutions," said Zimpleman.
"In the first quarter, we continued to expand our range of investment offerings,
doubling our portfolio of target-date  lifecycle mutual funds. We also continued
to invest in retirement  income  management  and workplace  benefits  consulting
capabilities,  given our focus on  long-term  asset  capture.  We believe  these
investments  will  continue  to pay off - in  terms  of new  business,  customer
loyalty and retention, and ultimately,  outstanding share price appreciation for
our shareholders."

NET INCOME
Net income  available  to common  stockholders  of $174.2  million  reflects net
realized/unrealized  capital  losses of $74.7  million,  which  includes:  $28.8
million of losses related to impairments of fixed maturity securities (including
$6.8  million  related to  subprime);  $15.6  million of  impairments  on equity
securities;  and unrealized capital losses of $22.0 million,  primarily from the
mark to market of credit default swaps.  Net income also includes a $7.6 million
gain from other after-tax  adjustments due to a change in estimated loss related
to a prior year legal contingency.

                               SEGMENT HIGHLIGHTS

U.S. ASSET ACCUMULATION
Segment operating earnings for first quarter 2008 were $139.1 million,  compared
to $154.7 million for the same period in 2007.  The decline in segment  earnings
primarily  reflects results for the full service  accumulation  business,  which
generated  $68.1 million of earnings in first  quarter  2008,  compared to $82.4
million in first quarter  2007.  Several items  impacted  comparability  between
periods.  First  quarter  2007  earnings  benefited  from a tax  true-up of $4.4
million and a reserve  true-up of $2.0  million  after tax.  First  quarter 2008
earnings  were  dampened by: $4.6 million  after-tax due to a change from a year
ago  in  the  mix  of   investments  in  401(k)  plans,   including   growth  in
non-proprietary  and ESOP  assets,  which  generate  lower  revenues  but higher
returns on equity;  $3.2  million due to lower income tax  benefits,  reflecting
both a change in  investment  mix and equity market  declines;  and $2.6 million
after-tax,  primarily due to the impact of market value  adjustments on customer
withdrawals,  resulting  from the  declining  interest  rate  environment.  Full
service  accumulation account values were $99.4 billion as of March 31, 2008, up
5 percent from $94.9 billion as of March 31, 2007. On a mean average basis, full
service  accumulation  account values were up 7 percent  comparing first quarter
2008 to first quarter 2007.

Operating  revenues for the first  quarter  were  $1,204.7  million  compared to
$1,179.1 million for the same period in 2007. Double-digit revenue growth in the
mutual funds,  individual annuities,  and bank and trust services businesses was
partially offset by lower single premium group annuity sales in the full service
payout business.  The single premium group annuity  product,  which is typically
used to fund  defined  benefit plan  terminations,  tends to vary from period to
period.

                                       4
Segment  assets under  management  were $170.9  billion as of March 31, 2008, an
increase of 2 percent from $167.2 billion as of March 31, 2007.

GLOBAL ASSET MANAGEMENT
Segment operating earnings for first quarter 2008 were $2.7 million, compared to
$23.7  million for the same period in 2007.  Fee  mandate  business  earnings of
$18.6 million in first quarter 2008,  which improved 13 percent from a year ago,
were substantially  offset by losses in the spread and securitization  business,
reflecting   unprecedented  conditions  in  the  CMBS  market.  The  spread  and
securitization  business lost $15.9  million in first quarter 2008,  compared to
$7.3 million of earnings in first quarter 2007, due to the extreme volatility of
credit spreads and the resulting  mark to market losses on commercial  mortgages
held in inventory by the joint venture securitization company.

Operating revenues for first quarter 2008 were $118.3 million compared to $134.8
million for the same period in 2007. Unfavorable  mark-to-market  adjustments to
the CMBS portfolio in the joint venture  securitization company more than offset
a 17 percent increase in revenues for the fee mandate business.

Third party assets under  management were $86.6 billion as of March 31, 2008, an
increase of 35 percent from $64.3 billion as of March 31, 2007.

INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION
Segment operating earnings for first quarter 2008 were $31.7 million compared to
$19.3 million for the same period in 2007, primarily reflecting strong growth in
assets under  management.  The increase also  reflects  benefits of $5.8 million
after-tax:  from  favorable  currency  exchange  rates in Brazil and Chile;  and
higher yields on invested assets,  due to unusually high first quarter inflation
in Chile.

Operating revenues were $183.7 million for the first quarter, compared to $141.3
million for the same period in 2007, reflecting higher yields on invested assets
in Chile,  favorable  currency  translation  in Brazil and Chile,  and continued
growth in assets under management.

Segment  assets under  management  were a record  $30.2  billion as of March 31,
2008, an increase of 37 percent from $22.0 billion as of March 31, 2007.

LIFE AND HEALTH INSURANCE
Segment operating  earnings for first quarter 2008 were $79.2 million,  compared
to $45.5 million for the same period in 2007.  Individual Life division earnings
were $20.6  million,  compared to $15.4  million  for first  quarter  2007.  The
increase  from a year ago  reflects  a return to more  normal  lapses  and death
claims,  as well as growth in the block of business.  Health  division  earnings
were a record $34.7 million for first  quarter  2008,  compared to $11.8 million
for first  quarter 2007.  First quarter 2008 earnings  benefited by $6.8 million
after-tax  due to the  favorable  development  of year-end  2007  claims.  First
quarter  2007  earnings  were  dampened by $15.0  million  after-tax  due to the
unfavorable  development of year-end 2006 claims.  Specialty  Benefits  division
earnings  were $23.9  million,  an increase of $5.6 million  from first  quarter
2007. The increase

                                       5
reflects  growth in the  business  and a favorable  reserve  adjustment  of $4.2
million after-tax in the individual disability line.

Operating  revenues were $1,187.6 million for the first quarter, a decrease of 2
percent from the same period in 2007.  Specialty  Benefits  continued to achieve
growth,  with  revenues  increasing 5 percent from a year ago.  Health  revenues
decreased 10 percent, primarily due to a decrease in covered members. Individual
Life  revenues  increased  3  percent,  reflecting  solid  growth  in  fee-based
Universal Life and Variable Universal Life products.

CORPORATE AND OTHER
Operating  losses  for  first  quarter  2008 were  $11.4  million,  compared  to
operating losses of $6.4 million for the same period in 2007. First quarter 2008
results  included  favorable  state  tax  items of  $13.7  million,  which  were
partially  offset by $4.3  million  of real  estate  partnership  losses.  First
quarter 2007 results  reflected  higher invested  assets,  and higher  operating
earnings from joint venture real estate sales activity.

FORWARD LOOKING AND CAUTIONARY STATEMENTS
This press  release  contains  forward-looking  statements,  including,  without
limitation,  statements  as to sales  targets,  sales and earnings  trends,  and
management's  beliefs,  expectations,  goals and opinions.  The company does not
undertake to update these statements, which are based on a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate.  Future
events and their effects on the company may not be those anticipated, and actual
results  may  differ   materially   from  the  results   anticipated   in  these
forward-looking  statements.  The risks,  uncertainties  and factors  that could
cause or contribute to such material  differences are discussed in the company's
annual  report on Form 10-K for the year ended  December 31, 2007,  filed by the
company  with  the   Securities  and  Exchange   Commission.   These  risks  and
uncertainties include,  without limitation:  competitive factors;  volatility of
financial  markets;  decrease in ratings;  interest rate  changes;  inability to
attract and retain sales representatives;  international business risks; foreign
currency  exchange  rate  fluctuations;  a pandemic,  terrorist  attack or other
catastrophic  event;  default  of  the  company's  re-insurers;  and  investment
portfolio risks.

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
At 9:00 A.M. (CST) tomorrow, Chairman J. Barry Griswell, President and CEO Larry
D.  Zimpleman,  and  Executive  Vice  President  and CFO Mike Gersie will lead a
discussion  of results,  asset  quality,  and the company's  longer-term  growth
expectations,  during a live conference call. Parties interested in listening to
the  conference  call live may access  the  webcast  on the  company's  Investor
Relations (IR) website (www.principal.com/investor) or by dialing (800) 374-1609
(U.S.  callers)  or (706)  643-7701  (International  callers)  approximately  10
minutes prior to the start of the call.  To access the call,  leader name is Tom
Graf. Listeners can access an audio replay of

                                       6
the call on the IR website,  or by calling (800)  642-1687 (US callers) or (706)
645-9291  (International  callers).  The access code for the replay is 38445018.
Replays will be available  through May 13, 2008.  The financial  supplement  and
additional  information  on the  company's  investment  portfolio  are currently
available on our website and will be referred to during the conference call.

ABOUT THE PRINCIPAL FINANCIAL GROUP
The Principal  Financial Group(R) (The Principal (R))(4) is a leader in offering
businesses,  individuals  and  institutional  clients A wide range of  financial
products and services,  including retirement and investment  services,  life and
health insurance,  and banking through its diverse family of financial  services
companies. A member of the Fortune 500, the Principal Financial Group has $304.2
billion in assets under  management(5)  and serves some 18.8  million  customers
worldwide from offices in Asia, Australia,  Europe, Latin America and the United
States. Principal Financial Group, Inc. is traded on the New York Stock Exchange
under the ticker symbol PFG. For more information, visit WWW.PRINCIPAL.COM.

                                       ###

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

                                                                   OPERATING EARNINGS (LOSS)* IN
                                                                           MILLIONS
                                                                -------------------------------------
                                                                        THREE MONTHS ENDED,
SEGMENT         3/31/08            3/31/07
--------------------------------------------------------------- ------------------- -----------------
                                       U.S. ASSET ACCUMULATION  $           139.1   $         154.7
--------------------------------------------------------------- ------------------- -----------------
                                       GLOBAL ASSET MANAGEMENT                2.7              23.7
--------------------------------------------------------------- ------------------- -----------------
               INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION               31.7              19.3
--------------------------------------------------------------- ------------------- -----------------
                                     LIFE AND HEALTH INSURANCE               79.2              45.5
--------------------------------------------------------------- ------------------- -----------------
                                           CORPORATE AND OTHER              (11.4)             (6.4)
--------------------------------------------------------------- ------------------- -----------------
                                            OPERATING EARNINGS              241.3             236.8
--------------------------------------------------------------- ------------------- -----------------
                               NET REALIZED/UNREALIZED CAPITAL
                                    GAINS(LOSSES), AS ADJUSTED              (74.7)             20.3
--------------------------------------------------------------- ------------------- -----------------
                                   OTHER AFTER-TAX ADJUSTMENTS                7.6               0.0
--------------------------------------------------------------- ------------------- -----------------
                   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $           174.2  $          257.1
--------------------------------------------------------------- ------------------- -----------------

                                                                         PER DILUTED SHARE
                                                                -------------------------------------
                                                                        THREE MONTHS ENDED,
                                                                ------------------- -----------------
                                                                       3/31/08            3/31/07
                                                                ------------------- -----------------
                                            OPERATING EARNINGS  $             0.92    $         0.87
--------------------------------------------------------------- ------------------- -----------------
                               NET REALIZED/UNREALIZED CAPITAL
                                    GAINS(LOSSES), AS ADJUSTED               (0.28)             0.08
--------------------------------------------------------------- ------------------- -----------------
                                   OTHER AFTER-TAX ADJUSTMENTS                0.03              0.00
--------------------------------------------------------------- ------------------- -----------------
                   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $             0.67    $         0.95
--------------------------------------------------------------- ------------------- -----------------
                        WEIGHTED-AVERAGE DILUTED COMMON SHARES
                                                   OUTSTANDING              261.3             270.9
--------------------------------------------------------------- ------------------- -----------------
*OPERATING  EARNINGS  VERSUS  U.S.  GAAP (GAAP) NET INCOME  AVAILABLE  TO COMMON
STOCKHOLDERS  Management uses operating  earnings,  which excludes the effect of
net  realized/unrealized  capital  gains  and  losses,  as  adjusted,  and other
after-tax  adjustments,  for goal setting,  as a basis for determining  employee
compensation,  and for evaluating performance on a basis comparable to that used
by investors and securities analysts.  Segment operating earnings are determined
by  adjusting  U.S.  GAAP net income  available to common  stockholders  for net
realized/unrealized  capital gains and losses, as adjusted,  and other after-tax
adjustments the company believes are not indicative of overall operating trends.
Note: 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 the company's  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.

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

                                                                                    THREE MONTHS ENDED,
                                                                             ----------------- ----------------
                                                                                 3/31/08           3/31/07
                                                                             ----------------- ----------------
Premiums and other considerations                                         $      1,053.0     $    1,107.7
   Fees and other revenues                                                            613.4            592.5
   Net investment income                                                              960.3            923.2
   Net realized/unrealized capital gains (losses)                                    (126.0)            37.6
                                                                             ----------------- ----------------
   TOTAL REVENUES                                                                   2,500.7          2,661.0
                                                                             ----------------- ----------------
   Benefits, claims, and settlement expenses                                        1,472.0          1,498.0
   Dividends to policyholders                                                          70.8             74.0
   Operating expenses                                                                 745.9            754.7
                                                                             ----------------- ----------------
   TOTAL EXPENSES                                                                   2,288.7          2,326.7
                                                                             ----------------- ----------------
   Income before income taxes                                                         212.0            334.3
   Income taxes                                                                        29.6             69.0
                                                                             ----------------- ----------------
   NET INCOME                                                                         182.4            265.3
   Preferred stock dividends                                                            8.2              8.2
                                                                             ----------------- ----------------
   NET INCOME AVAILABLE TO COMMON STOCKHOLDERS                               $        174.2     $      257.1

   Less:
   Net realized/unrealized capital gains (losses), as adjusted                        (74.7)            20.3
   Other after-tax adjustments                                                          7.6              0.0
                                                                             ----------------- ----------------
   OPERATING EARNINGS                                                        $        241.3     $      236.8
                                                                             ================= ================
SELECTED BALANCE SHEET STATISTICS

                                                     ------------------------------------------------------------
                                                                            PERIOD ENDED,
                                                     ------------------------------------------------------------
                                                           3/31/08              12/31/07            3/31/07
                                                     -------------------- --------------------- -----------------
Total assets (in billions)                         $           152.0      $       154.5         $    146.6
  Total common equity (in millions)                  $         6,300.1      $     6,879.7         $  7,565.0
  Total common equity excluding accumulated other
       comprehensive income (in millions)            $         6,659.2      $     6,459.5         $  6,667.3
  End of period common shares outstanding
       (in millions)                                             258.6              259.1              267.4
  Book value per common share                        $            24.36     $        26.55        $     28.29
  Book value per common share excluding
      accumulated other comprehensive income         $            25.75     $        24.93        $     24.93
9
PRINCIPAL FINANCIAL GROUP, INC.
           RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO U.S. GAAP
                       (IN MILLIONS, EXCEPT AS INDICATED)

                                                                                        THREE MONTHS ENDED,
                                                                                   -------------- ---------------
                                                                                      3/31/08        3/31/07
                                                                                   -------------- ---------------
DILUTED EARNINGS PER COMMON SHARE:
Operating Earnings                                                                         0.92            0.87
Net realized/unrealized capital gains (losses)                                            (0.28)           0.08
Other after-tax adjustments                                                                0.03            0.00
                                                                                   -------------- ---------------
Net income available to common stockholders                                                0.67            0.95
                                                                                   ============== ===============

BOOK VALUE PER COMMON SHARE EXCLUDING ACCUMULATED OTHER COMPREHENSIVE INCOME:
Book value per common share excluding accumulated other comprehensive income              25.75           24.93
Net unrealized capital gains (losses)                                                     (2.01)           3.41
Foreign currency translation                                                               0.38           (0.10)
Net unrecognized post-retirement benefit obligations                                       0.24            0.05
                                                                                   -------------- ---------------
Book value per common share including accumulated other comprehensive income              24.36           28.29
                                                                                   ============== ===============
OPERATING REVENUES:
USAA                                                                                   1,204.7         1,179.1
GAM                                                                                      118.3           134.8
IAMA                                                                                     183.7           141.3
Life and Health                                                                        1,187.6         1,212.4
Corporate and Other                                                                      (55.3)          (43.9)
                                                                                   -------------- ---------------
Total operating revenues                                                               2,639.0         2,623.7
Add:  Net realized/unrealized capital gains (losses) and related adjustments            (138.3)           37.2
Less:  Operating revenues from discontinued real estate                                    0.0            (0.1)
                                                                                   -------------- ---------------
Total GAAP revenues                                                                    2,500.7         2,661.0
                                                                                   ============== ===============
OPERATING EARNINGS:
USAA                                                                                     139.1           154.7
GAM                                                                                        2.7            23.7
IAMA                                                                                      31.7            19.3
Life and Health                                                                           79.2            45.5
Corporate and Other                                                                      (11.4)           (6.4)
                                                                                   -------------- ---------------
Total operating earnings                                                                 241.3           236.8
Net realized/unrealized capital gains (losses)                                           (74.7)           20.3
Other after-tax adjustments                                                                7.6             0.0
                                                                                   -------------- ---------------
Net income available to common stockholders                                              174.2           257.1
                                                                                   ============== ===============
NET REALIZED/UNREALIZED CAPITAL GAINS (LOSSES):
Net realized/unrealized capital gains, as adjusted                                       (74.7)           20.3
Add:
Periodic settlements and accruals on non-hedge derivatives                                 8.8             0.0
Amortization of DPAC and sale inducement costs                                           (13.5)            0.7
Capital gains distributed                                                                 (9.3)            2.0
Tax impacts                                                                              (34.1)           12.9
Minority interest capital gains                                                           (6.7)            1.3
Less related fee adjustments:
Unearned front-end fee income                                                              0.0             0.4
Certain market value adjustments to fee revenues                                          (3.5)           (0.8)
                                                                                   -------------- ---------------
GAAP net realized/unrealized capital gains                                              (126.0)           37.6
                                                                                   ============== ===============
OTHER AFTER TAX ADJUSTMENTS:
Change in estimated loss related to a prior year legal contingency                         7.6             0.0
                                                                                   -------------- ---------------
Total other after-tax adjustments                                                          7.6             0.0
                                                                                   ============== ===============
10
(1)  Use of non-GAAP  financial  measures is  discussed  in this  release  after
     Segment Highlights.
(2)  Commercial mortgage-backed securities
(3)  The increase from first quarter 2007 includes  $13.7 billion of AUM related
     to the  company's  third  quarter  2007  acquisition  of  Morley  Financial
     Services, Inc.
(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 March 31, 2008

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