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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">SECURITIES AND EXCHANGE COMMISSION</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Washington, D.C. 20549</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">FORM 8-K</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">CURRENT REPORT</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Pursuant to Section 13 or 15(d) of the</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date of Report: </FONT><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">May 2, 2011</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Date of earliest event reported)</FONT></TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=5 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">PRINCIPAL FINANCIAL GROUP, INC.</FONT></B></TD></TR>
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     <TD style="TEXT-INDENT: 20px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Delaware</FONT></B>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1-16725</FONT></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">42-1520346</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 10px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (State or other jurisdiction</FONT>&nbsp;</TD>
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     <TD noWrap align=center><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of incorporation)</FONT>&nbsp;</TD>
     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Identification Number)</FONT>&nbsp;</TD></TR>
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     <TD colSpan=4 align=center><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">711 High Street, Des Moines, Iowa 50392</FONT></B></TD></TR>
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     <TD colSpan=4 align=center><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Address of principal executive offices)</FONT></TD></TR>
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     <TD colSpan=4 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">registrant under any of the following provisions:</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">[&nbsp;&nbsp;&nbsp;&nbsp; ]</FONT>&nbsp;</TD>
     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">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 colSpan=2 noWrap align=left><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 2.02. Results of Operations and Financial Condition</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On May 2, 2011, Principal Financial Group, Inc. publicly announced information regarding its</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">results of operations and financial condition for the quarter ended March 31, 2011. The text of the</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">announcement is included herewith as Exhibit 99.</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Item 9.01 Financial Statements and Exhibits</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">99&nbsp; &nbsp;First Quarter 2011 Earnings Release</FONT>&nbsp;</TD>
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     <TD colSpan=2 align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SIGNATURE</FONT></TD></TR>
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     <TD style="TEXT-INDENT: 10px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By:</FONT>&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </U><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif"><U>/s/ Terrance J. Lillis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name: Terrance J. Lillis</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 61px" colSpan=2 noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp;&nbsp;&nbsp; Senior Vice President and Chief Financial</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Officer</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Date: May 3, 2011</FONT>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EXHIBIT 99</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Release:</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On receipt, May 2, 2011</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Media contact:</FONT>&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Susan Houser, 515-248-2268, houser.susan@principal.com</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">Investor contact:</FONT>&nbsp;&nbsp; <FONT size=2 face="TimesNewRomanPS-ItalicMT,Times New Roman,Times,serif">John Egan, 515-235-9500, egan.john@principal.com</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 align=left><B><I><FONT size=3 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Principal Financial Group, Inc. Announces First Quarter 2011 Results</FONT></I></B></TD></TR>
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     <TD colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Record assets under management of $327.4 billion at the end of first quarter 2011, an increase</FONT></B>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">of 12 percent compared to first quarter 2010.</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(Des Moines, Iowa) &#150; Principal Financial Group, Inc. (NYSE: PFG) today announced results for first quarter</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2011. The company reported operating earnings</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of $231.8 million for first quarter 2011, compared to $221.4</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million for first quarter 2010. Operating earnings per diluted share (EPS) were $0.71 for first quarter 2011,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compared to $0.69 for first quarter 2010. The company reported net income available to common stockholders</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of $196.3 million, or $0.60 per diluted share for first quarter 2011, compared to $190.8 million, or $0.59 per</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">diluted share for first quarter 2010. Operating revenues for first quarter 2011 were $2,046.7 million compared to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$1,972.5 million for the same period last year.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;The Principal</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">had a very solid start to 2011, including record total company assets under</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">management, record Principal Funds sales and strong net cash flows from Principal International, Full Service</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulation and Principal Funds,&#148; said Larry D. Zimpleman, chairman, president and chief executive</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">officer of Principal Financial Group, Inc. &#147;With the continued successful execution of our strategy and signs</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of a recovering economy, we expect growth across our businesses to accelerate in the quarters ahead.&#148;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Because of our strong financial position and flexibility going into the year, we have the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">opportunity to further increase shareholder value through capital deployment,&#148; said Zimpleman. &#147;Since year</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">end, we&#146;ve announced two acquisitions, the HSBC AFORE and Finisterre Capital. These businesses</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">complement our strategy, provide additional scale and fit nicely within our existing infrastructure, which gives us</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">potential for substantial synergies. We&#146;re also excited about additional opportunities in 2011 to deploy capital as we</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">continue to execute our strategy.&#148;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;In the first quarter we delivered strong operating results on double-digit earnings growth from Principal</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Global Investors, Principal Funds, Individual Annuities and U.S. Insurance Solutions,&#148; said Terry Lillis, senior vice</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">president and chief financial officer. &#147;Across our business lines we&#146;re seeing momentum continue to build,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reflecting demand for our unique solutions and success of our multi-product, multi-channel distribution platform.&#148;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#147;Our investment portfolio continues to perform better than expected,&#148; added Lillis. &#147;In addition, we are</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">encouraged by the demand for many of the investment strategies where Principal Global Investors has a proven</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">track record such as real estate, emerging markets and high yield.&#148;</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>_________________________&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">1 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Use of non-GAAP financial measures is discussed in this release after Segment Highlights</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 4</FONT>&nbsp;</TD>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Key Highlights</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Excellent sales in the company&#146;s three key U.S. Retirement and Investor Services products in the first</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter, with $2.0 billion for Full Service Accumulation, $2.9 billion for Principal Funds and $345</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million for Individual Annuities.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp;&nbsp;&#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net cash flows of $870 million for Full Service Accumulation and $620 million for Principal Funds.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Continued strong operating leverage in Principal Global Investors with 38 percent growth in first quarter</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2011 operating earnings over first quarter 2010 on 6 percent growth in average assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Principal International reported record assets under management of $48.5 billion, excluding China, as of</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">March 31, 2011, and net cash flows of $1.3 billion for the quarter.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Record Specialty Benefits sales of $113 million for the quarter and a 35 percent increase in Individual</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Life sales over the prior year quarter.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Strong capital position with an estimated risk based capital ratio of 425 percent at quarter end and</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">approximately $1.9 billion of excess capital.</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2</FONT></SUP>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Book value per share, excluding AOCI</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">increased to a record high of $28.38, up 6 percent over first</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">quarter 2010.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Named by Barron&#146;s as the #3 rated Fund Family for investment performance across all asset categories in</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2010 and #7 for the last decade.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Named Investment Brand of The Year in the 2011 Harris Poll EquiTrend</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Study.*</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Net Income</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Net income available to common stockholders of $196.3 million for first quarter 2011 reflects net realized</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">capital losses of $52.6 million, which include:</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$32.7 million of losses related to credit gains and losses on sales and permanent impairments of fixed</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">maturity securities, including $21.3 million of losses on commercial mortgage backed securities; and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$5.1 million of losses on commercial mortgage whole loans.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B><I><FONT size=2 face="TimesNewRomanPS-BoldItalicMT,Times New Roman,Times,serif">Segment Highlights</FONT></I></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Retirement and Investor Services</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Segment operating earnings for first quarter 2011 were $159.3 million, compared to $157.0 million for</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the same period in 2010. Full Service Accumulation earnings were $76.0 million for first quarter 2011 as</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">compared to $76.3 million for first quarter 2010. A 13 percent increase in average account values was</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">substantially offset by a lower dividends received deduction accrual true-up than a year ago quarter and higher</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">deferred policy acquisition cost (DPAC) amortization expense. Principal Funds earnings increased 18 percent</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">from a year ago to $12.0 million, primarily due to a 19 percent increase in average account values. Individual</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Annuities earnings were $37.3 million compared to $30.8 million for first quarter 2010. The variance primarily</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">reflects favorable investment income in the quarter and record account values. The accumulation businesses</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">had</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">record account values of $166.6 billion at March 31, 2011.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>_________________________&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">2 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">350 percent NAIC risk based capital ratio for the life company.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">3 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Accumulated Other Comprehensive Income</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">4 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Full Service Accumulation, Principal Funds, Individual Annuities and Bank and Trust Services</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 5</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues for first quarter 2011 were $1,017.8 million compared to $1,012.7 million for</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the same period in 2010, primarily due to higher revenues for the accumulation businesses, which improved</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$51.7 million, or 7 percent, from a year ago.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment assets under management were $181.5 billion as of March 31, 2011, compared to $165.9</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of March 31, 2010.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Principal Global Investors</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings for first quarter 2011 were $16.6 million, compared to $12.0 million in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the prior year quarter, primarily due to an increase in assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues for first quarter were $125.3 million, compared to $113.8 million for the same</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">period in 2010, primarily due to higher management fees and transaction fees.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 15px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unaffiliated assets under management were $78.1 billion as of March 31, 2011, compared to $74.9</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of March 31, 2010.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Principal International</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings were $28.5 million in first quarter 2011, compared to $37.9 million in</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the prior year quarter, reflecting a reduced economic interest in our Brazilian joint venture.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating revenues were $206.2 million for first quarter 2011, compared to $181.1 million for the same</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">period last year, primarily due to growth in assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment assets under management were a record $48.5 billion as of March 31, 2011 ($7.7 billion</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">of assets in our joint venture in China are not included in reported assets under management), up from $35.7</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">billion as of March 31, 2010. This includes a record $5.6 billion of net cash flows over the trailing twelve</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">months, or 16 percent of beginning of period assets under management.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">U.S. Insurance Solutions</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating earnings for first quarter 2011 were $59.5 million, compared to $44.1 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period in 2010. Individual Life earnings were $36.5 million in the first quarter, compared to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">$30.5 million in first quarter 2010, primarily due to improved mortality experience. Specialty Benefits earnings</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">were $23.0 million in first quarter 2011, up from $13.6 million in the same period a year ago, primarily due to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">improved claims experience and investment performance.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 17px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment operating revenues for first quarter 2011 were $731.2 million compared to $692.1 million</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">for the same period a year ago, with stronger non-qualified life insurance sales and positive trends in sales,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">lapses and employment in Specialty Benefits.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Corporate</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 18px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating losses for first quarter 2011 were $32.1 million compared to operating losses of $29.6</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">million in first quarter 2010.</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Forward looking and cautionary statements</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">This press release contains forward-looking statements, including, without limitation, statements as to</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">operating earnings, net income available to common stockholders, net cash flows, realized and unrealized</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">expectations, goals and opinions. The company does not undertake to update these statements, which are</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Future events and their effects on the company may not be those anticipated, and actual results may differ</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">materially from the results anticipated in these forward-looking statements. The risks, uncertainties and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">factors that could cause or contribute to such material differences are discussed in the company's annual report</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">on Form 10-K for the year ended Dec. 31, 2010, filed by the company with the Securities and Exchange</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Commission, as updated or supplemented from time to time in subsequent filings. These risks and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">uncertainties include, without limitation: adverse capital and credit market conditions that may significantly</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">affect the company&#146;s ability to meet liquidity needs, access to capital and cost of capital; a continuation of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">difficult conditions in the global capital markets and the general economy that may materially adversely affect</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">the company&#146;s business and results of operations; the risk from acquiring new businesses, which could result</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">in the impairment of goodwill and/or intangible assets recognized at the time of acquisition; impairment of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other financial institutions that could adversely affect the company; investment risks which may diminish the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">value of the company&#146;s invested assets and the investment returns credited to customers, which could reduce</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">sales, revenues, assets under management and net income; requirements to post collateral or make payments</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">related to declines in market value of specified assets may adversely affect company liquidity and expose the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">company to counterparty credit risk; changes in laws, regulations or accounting standards that may reduce</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">company profitability; fluctuations in foreign currency exchange rates that could reduce company</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">profitability; Principal Financial Group, Inc.&#146;s primary reliance, as a holding company, on dividends from its</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of subsidiaries to pay</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest rate changes;</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">inability to attract and retain sales representatives; international business risks; a pandemic, terrorist attack or</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">other catastrophic event; and default of the company&#146;s re-insurers.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Use of Non-GAAP Financial Measures</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">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: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,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: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">evaluating the company&#146;s financial condition and results of operations. They are not, however, a substitute for</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">measures to the most directly comparable U.S. GAAP measure at the end of the release. The company adjusts</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">U.S. GAAP measures for items not directly related to ongoing operations. However, it is possible these</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">adjusting items have occurred in the past and could recur in the future reporting periods. Management also uses</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">non-GAAP measures for goal setting, as a basis for determining employee and senior management</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">awards and compensation, and evaluating performance on a basis comparable to that used by investors</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and securities analysts.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">Earnings Conference Call</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">On Tuesday, May 3, 2011 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Zimpleman and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">results, asset quality and capital adequacy during a live conference call, which can be accessed as follows:</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Via live Internet webcast. Please go to www.principal.com/investor at least 10-15 minutes prior to the</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">start of the call to register, and to download and install any necessary audio software.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">callers) approximately 10 minutes prior to the start of the call. The access code is 54521548.</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Page 7</FONT>&nbsp;</TD>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Replay of the earnings call via telephone is available by dialing 800-642-1687 (U.S. and Canadian</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">callers) or 706-645-9291 (International callers). The access code is 54521548. This replay will be</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">available approximately two hours after the completion of the live earnings call through the end of day</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">May 10, 2011.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" noWrap align=left><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&nbsp;&nbsp; &#149;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">www.principal.com/investor.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The company's financial supplement and additional investment portfolio detail for first quarter 2011 is</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">currently available at www.principal.com/investor, and may be referred to during the call.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD colSpan=2>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><B><FONT size=2 face="TimesNewRomanPS-BoldMT,Times New Roman,Times,serif">About the Principal Financial Group</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">The Principal Financial Group</FONT><SUP><FONT size=2 face=SymbolMT,Arial,Helvetica,sans-serif>&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">(The Principal </FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">)</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">is a leader in offering businesses, individuals and</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">institutional clients a wide range of financial products and services, including retirement and investment</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">services, insurance, and banking through its diverse family of financial services companies. A member of the</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Fortune 500, the Principal Financial Group has $327.4 billion in assets under management</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and serves some</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">16.4 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">PFG. For more information, visit www.principal.com.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">*The Principal Financial Group received the highest numerical Equity Score among Investment</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">brands included in the 2011 Harris Poll EquiTrend</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#174; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Study, which is based on opinions of 25,099 U.S.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">consumers ages 15 and over surveyed online between January 11 and 27, 2011. Your opinion may</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">differ. &#147;Highest Ranked&#148; was determined by a pure ranking of a sample of Investment brands.</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2></TD></TR>
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     <TD colSpan=2 noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif">###</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left></TD>
     <TD noWrap align=center><FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif"></FONT></TD></TR>
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     <TD colSpan=2 noWrap align=left>_______________________<FONT size=3 face="TimesNewRomanPSMT,Times New Roman,Times,serif"></FONT></TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">5 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#147;The Principal Financial Group</FONT><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">&#148; </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">and &#147;The Principal&#148; are registered service marks of Principal Financial Services,</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">Inc., a member of the Principal Financial Group.</FONT>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 5px" colSpan=2 noWrap align=left><SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">6 </FONT></SUP><FONT size=2 face="TimesNewRomanPSMT,Times New Roman,Times,serif">As of March 31, 2011</FONT>&nbsp;</TD></TR></TABLE></DIV>
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[{"type": "8-K", "sequence": "1", "filename": "firstqtrer11.htm", "description": "FIRST QUARTER ER", "secsgml_size_bytes": 73597}]
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firstqtrer11.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:
May 2, 2011
(Date of earliest event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-16725
42-1520346
(State or other jurisdiction
(Commission file number)
(I.R.S. Employer
of incorporation)
Identification Number)
711 High Street, Des Moines, Iowa 50392
(Address of principal executive offices)
(515) 247-5111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[     ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[     ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[     ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[     ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
_________________________
Page 2
Item 2.02. Results of Operations and Financial Condition
On May 2, 2011, Principal Financial Group, Inc. publicly announced information regarding its
results of operations and financial condition for the quarter ended March 31, 2011. The text of the
announcement is included herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
99   First Quarter 2011 Earnings Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PRINCIPAL FINANCIAL GROUP, INC.
By:
/s/ Terrance J. Lillis
Name: Terrance J. Lillis
Title:    Senior Vice President and Chief Financial
Officer
Date: May 3, 2011
Page 3
EXHIBIT 99
Release:
On receipt, May 2, 2011
Media contact:
Susan Houser, 515-248-2268, houser.susan@principal.com
Investor contact:
John Egan, 515-235-9500, egan.john@principal.com
Principal Financial Group, Inc. Announces First Quarter 2011 Results
Record assets under management of $327.4 billion at the end of first quarter 2011, an increase
of 12 percent compared to first quarter 2010.
(Des Moines, Iowa) – Principal Financial Group, Inc. (NYSE: PFG) today announced results for first quarter
2011. The company reported operating earnings
1
of $231.8 million for first quarter 2011, compared to $221.4
million for first quarter 2010. Operating earnings per diluted share (EPS) were $0.71 for first quarter 2011,
compared to $0.69 for first quarter 2010. The company reported net income available to common stockholders
of $196.3 million, or $0.60 per diluted share for first quarter 2011, compared to $190.8 million, or $0.59 per
diluted share for first quarter 2010. Operating revenues for first quarter 2011 were $2,046.7 million compared to
$1,972.5 million for the same period last year.
"The Principal
®
had a very solid start to 2011, including record total company assets under
management, record Principal Funds sales and strong net cash flows from Principal International, Full Service
Accumulation and Principal Funds," said Larry D. Zimpleman, chairman, president and chief executive
officer of Principal Financial Group, Inc. "With the continued successful execution of our strategy and signs
of a recovering economy, we expect growth across our businesses to accelerate in the quarters ahead."
"Because of our strong financial position and flexibility going into the year, we have the
opportunity to further increase shareholder value through capital deployment," said Zimpleman. "Since year
end, we've announced two acquisitions, the HSBC AFORE and Finisterre Capital. These businesses
complement our strategy, provide additional scale and fit nicely within our existing infrastructure, which gives us
potential for substantial synergies. We're also excited about additional opportunities in 2011 to deploy capital as we
continue to execute our strategy."
"In the first quarter we delivered strong operating results on double-digit earnings growth from Principal
Global Investors, Principal Funds, Individual Annuities and U.S. Insurance Solutions," said Terry Lillis, senior vice
president and chief financial officer. "Across our business lines we're seeing momentum continue to build,
reflecting demand for our unique solutions and success of our multi-product, multi-channel distribution platform."
"Our investment portfolio continues to perform better than expected," added Lillis. "In addition, we are
encouraged by the demand for many of the investment strategies where Principal Global Investors has a proven
track record such as real estate, emerging markets and high yield."
_________________________
1
Use of non-GAAP financial measures is discussed in this release after Segment Highlights
Page 4
Key Highlights
•
Excellent sales in the company's three key U.S. Retirement and Investor Services products in the first
quarter, with $2.0 billion for Full Service Accumulation, $2.9 billion for Principal Funds and $345
million for Individual Annuities.
•
Net cash flows of $870 million for Full Service Accumulation and $620 million for Principal Funds.
•
Continued strong operating leverage in Principal Global Investors with 38 percent growth in first quarter
2011 operating earnings over first quarter 2010 on 6 percent growth in average assets under management.
•
Principal International reported record assets under management of $48.5 billion, excluding China, as of
March 31, 2011, and net cash flows of $1.3 billion for the quarter.
•
Record Specialty Benefits sales of $113 million for the quarter and a 35 percent increase in Individual
Life sales over the prior year quarter.
•
Strong capital position with an estimated risk based capital ratio of 425 percent at quarter end and
approximately $1.9 billion of excess capital.
2
•
Book value per share, excluding AOCI
3
increased to a record high of $28.38, up 6 percent over first
quarter 2010.
•
Named by Barron's as the #3 rated Fund Family for investment performance across all asset categories in
2010 and #7 for the last decade.
•
Named Investment Brand of The Year in the 2011 Harris Poll EquiTrend
®
Study.*
Net Income
Net income available to common stockholders of $196.3 million for first quarter 2011 reflects net realized
capital losses of $52.6 million, which include:
•
$32.7 million of losses related to credit gains and losses on sales and permanent impairments of fixed
maturity securities, including $21.3 million of losses on commercial mortgage backed securities; and
•
$5.1 million of losses on commercial mortgage whole loans.
Segment Highlights
Retirement and Investor Services
Segment operating earnings for first quarter 2011 were $159.3 million, compared to $157.0 million for
the same period in 2010. Full Service Accumulation earnings were $76.0 million for first quarter 2011 as
compared to $76.3 million for first quarter 2010. A 13 percent increase in average account values was
substantially offset by a lower dividends received deduction accrual true-up than a year ago quarter and higher
deferred policy acquisition cost (DPAC) amortization expense. Principal Funds earnings increased 18 percent
from a year ago to $12.0 million, primarily due to a 19 percent increase in average account values. Individual
Annuities earnings were $37.3 million compared to $30.8 million for first quarter 2010. The variance primarily
reflects favorable investment income in the quarter and record account values. The accumulation businesses
4
had
record account values of $166.6 billion at March 31, 2011.
_________________________
2
Excess capital includes cash at the holding company and capital at the life company above that needed to maintain a
350 percent NAIC risk based capital ratio for the life company.
3
Accumulated Other Comprehensive Income
4
Full Service Accumulation, Principal Funds, Individual Annuities and Bank and Trust Services
Page 5
Operating revenues for first quarter 2011 were $1,017.8 million compared to $1,012.7 million for
the same period in 2010, primarily due to higher revenues for the accumulation businesses, which improved
$51.7 million, or 7 percent, from a year ago.
Segment assets under management were $181.5 billion as of March 31, 2011, compared to $165.9
billion as of March 31, 2010.
Principal Global Investors
Segment operating earnings for first quarter 2011 were $16.6 million, compared to $12.0 million in
the prior year quarter, primarily due to an increase in assets under management.
Operating revenues for first quarter were $125.3 million, compared to $113.8 million for the same
period in 2010, primarily due to higher management fees and transaction fees.
Unaffiliated assets under management were $78.1 billion as of March 31, 2011, compared to $74.9
billion as of March 31, 2010.
Principal International
Segment operating earnings were $28.5 million in first quarter 2011, compared to $37.9 million in
the prior year quarter, reflecting a reduced economic interest in our Brazilian joint venture.
Operating revenues were $206.2 million for first quarter 2011, compared to $181.1 million for the same
period last year, primarily due to growth in assets under management.
Segment assets under management were a record $48.5 billion as of March 31, 2011 ($7.7 billion
of assets in our joint venture in China are not included in reported assets under management), up from $35.7
billion as of March 31, 2010. This includes a record $5.6 billion of net cash flows over the trailing twelve
months, or 16 percent of beginning of period assets under management.
U.S. Insurance Solutions
Segment operating earnings for first quarter 2011 were $59.5 million, compared to $44.1 million
for the same period in 2010. Individual Life earnings were $36.5 million in the first quarter, compared to
$30.5 million in first quarter 2010, primarily due to improved mortality experience. Specialty Benefits earnings
were $23.0 million in first quarter 2011, up from $13.6 million in the same period a year ago, primarily due to
improved claims experience and investment performance.
Segment operating revenues for first quarter 2011 were $731.2 million compared to $692.1 million
for the same period a year ago, with stronger non-qualified life insurance sales and positive trends in sales,
lapses and employment in Specialty Benefits.
Corporate
Operating losses for first quarter 2011 were $32.1 million compared to operating losses of $29.6
million in first quarter 2010.
Page 6
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to
operating earnings, net income available to common stockholders, net cash flows, realized and unrealized
gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs,
expectations, goals and opinions. The company does not undertake to update these statements, which are
based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate.
Future events and their effects on the company may not be those anticipated, and actual results may differ
materially from the results anticipated in these forward-looking statements. The risks, uncertainties and
factors that could cause or contribute to such material differences are discussed in the company's annual report
on Form 10-K for the year ended Dec. 31, 2010, filed by the company with the Securities and Exchange
Commission, as updated or supplemented from time to time in subsequent filings. These risks and
uncertainties include, without limitation: adverse capital and credit market conditions that may significantly
affect the company's ability to meet liquidity needs, access to capital and cost of capital; a continuation of
difficult conditions in the global capital markets and the general economy that may materially adversely affect
the company's business and results of operations; the risk from acquiring new businesses, which could result
in the impairment of goodwill and/or intangible assets recognized at the time of acquisition; impairment of
other financial institutions that could adversely affect the company; investment risks which may diminish the
value of the company's invested assets and the investment returns credited to customers, which could reduce
sales, revenues, assets under management and net income; requirements to post collateral or make payments
related to declines in market value of specified assets may adversely affect company liquidity and expose the
company to counterparty credit risk; changes in laws, regulations or accounting standards that may reduce
company profitability; fluctuations in foreign currency exchange rates that could reduce company
profitability; Principal Financial Group, Inc.'s primary reliance, as a holding company, on dividends from its
subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of subsidiaries to pay
such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest rate changes;
inability to attract and retain sales representatives; international business risks; a pandemic, terrorist attack or
other catastrophic event; and default of the company's re-insurers.
Use of Non-GAAP Financial Measures
The company uses a number of non-GAAP financial measures that management believes are useful to investors
because they illustrate the performance of normal, ongoing operations, which is important in understanding and
evaluating the company's financial condition and results of operations. They are not, however, a substitute for
U.S. GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP
measures to the most directly comparable U.S. GAAP measure at the end of the release. The company adjusts
U.S. GAAP measures for items not directly related to ongoing operations. However, it is possible these
adjusting items have occurred in the past and could recur in the future reporting periods. Management also uses
non-GAAP measures for goal setting, as a basis for determining employee and senior management
awards and compensation, and evaluating performance on a basis comparable to that used by investors
and securities analysts.
Earnings Conference Call
On Tuesday, May 3, 2011 at 10:00 a.m. (ET), Chairman, President and Chief Executive Officer Larry
Zimpleman and Senior Vice President and Chief Financial Officer Terry Lillis will lead a discussion of
results, asset quality and capital adequacy during a live conference call, which can be accessed as follows:
•
Via live Internet webcast. Please go to www.principal.com/investor at least 10-15 minutes prior to the
start of the call to register, and to download and install any necessary audio software.
•
Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International
callers) approximately 10 minutes prior to the start of the call. The access code is 54521548.
Page 7
•
Replay of the earnings call via telephone is available by dialing 800-642-1687 (U.S. and Canadian
callers) or 706-645-9291 (International callers). The access code is 54521548. This replay will be
available approximately two hours after the completion of the live earnings call through the end of day
May 10, 2011.
•
Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at:
www.principal.com/investor.
The company's financial supplement and additional investment portfolio detail for first quarter 2011 is
currently available at www.principal.com/investor, and may be referred to during the call.
About the Principal Financial Group
The Principal Financial Group
®
(The Principal
®
)
5
is a leader in offering businesses, individuals and
institutional clients a wide range of financial products and services, including retirement and investment
services, insurance, and banking through its diverse family of financial services companies. A member of the
Fortune 500, the Principal Financial Group has $327.4 billion in assets under management
6
and serves some
16.4 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.
*The Principal Financial Group received the highest numerical Equity Score among Investment
brands included in the 2011 Harris Poll EquiTrend
®
Study, which is based on opinions of 25,099 U.S.
consumers ages 15 and over surveyed online between January 11 and 27, 2011. Your opinion may
differ. "Highest Ranked" was determined by a pure ranking of a sample of Investment brands.
###
_______________________
5
"The Principal Financial Group
"
and "The Principal" are registered service marks of Principal Financial Services,
Inc., a member of the Principal Financial Group.
6
As of March 31, 2011