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     <TD align=center><B><FONT face=serif size=5>SECURITIES AND EXCHANGE COMMISSION</FONT></B>&nbsp;</TD></TR>
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<P><B><FONT face=serif size=2>Washington, D.C. 20549</FONT></B></P>
<P><STRONG><FONT size=2>____________________</FONT></STRONG></P>
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     <TD align=center><B><FONT face=serif size=5>FORM 8-K</FONT></B></TD></TR>
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     <TD align=center><B><FONT face=serif>CURRENT REPORT</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=center><B><FONT face=serif>Pursuant to Section 13 or 15(d) of the</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><B><FONT face=serif>Securities Exchange Act of 1934</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif>Date of Report: </FONT><B><FONT face=serif>November 2, 2009</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif>(Date of earliest event reported)</FONT></TD></TR></TABLE><BR>
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     <TD align=center><B><FONT face=serif size=5>PRINCIPAL FINANCIAL GROUP, INC.</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif>(Exact name of registrant as specified in its charter)</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD 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;<B><FONT face=serif size=2>Delaware</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>1-16725</FONT></B>&nbsp;</TD>
     <TD align=left><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 42-1520346</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (State or other jurisdiction</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp; (Commission file number)</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (I.R.S. Employer</FONT>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of incorporation)</FONT>&nbsp;</TD>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Identification Number)</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=center><B><FONT face=serif size=2>711 High Street, Des Moines, Iowa 50392</FONT></B>&nbsp;</TD></TR>
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     <TD align=center><FONT face=serif size=2>(Address of principal executive offices)</FONT></TD></TR>
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     <TD align=center><B><FONT face=serif size=2>(515) 247-5111</FONT></B></TD></TR>
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     <TD align=center><FONT face=serif size=2>(Registrant&#146;s telephone number, including area code)</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif size=2>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 align=left><FONT face=serif size=2>registrant under any of the following provisions:</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif size=2>[&nbsp;&nbsp;&nbsp;&nbsp;]</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>[&nbsp;&nbsp;&nbsp; ]</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>[&nbsp;&nbsp;&nbsp;&nbsp;]</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>240.14d-2(b))</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>[&nbsp;&nbsp;&nbsp; ]</FONT>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR</FONT>&nbsp;</TD></TR>
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<P><FONT face=serif size=2>240.13e-4(c))</FONT>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ____________________</P>
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<P><B><FONT face=serif>Item 2.02. Results of Operations and Financial Condition</FONT></B>&nbsp;</P>
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     <TD align=left><FONT face=serif>On November 2, 2009, Principal Financial Group, Inc. publicly announced information regarding</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif>its results of operations and financial condition for the quarter ended September 30, 2009. The text</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif>of the announcement is included herewith as Exhibit 99.</FONT>&nbsp;</TD></TR>
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     <TD align=left><B><FONT face=serif>Item 9.01 Financial Statements and Exhibits</FONT></B>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif>99&nbsp;&nbsp; Third Quarter 2009 Earnings Release</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIGNATURE</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif>this report to be signed on its behalf by the undersigned thereunto duly authorized.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left colSpan=2><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL FINANCIAL GROUP, INC.</FONT>&nbsp;</TD></TR>
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     <TD align=left colSpan=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>By:&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT><U>&nbsp;</U><FONT face=serif><U>/s/ Terrance J. Lillis</U></FONT><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </U></TD></TR>
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     <TD align=left colSpan=2><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp;&nbsp; Terrance J. Lillis</FONT>&nbsp;</TD></TR>
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     <TD align=left colSpan=2><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:</FONT>&nbsp;&nbsp;&nbsp;&nbsp; <FONT face=serif>Senior Vice President and Chief Financial</FONT>&nbsp;</TD></TR>
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     <TD align=left colSpan=2><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officer</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left colSpan=2><FONT face=serif>Date:</FONT>&nbsp;&nbsp; <FONT face=serif>November 2, 2009</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 3</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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></TABLE><BR>
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     <TD align=left><B><FONT face=serif>RELEASE</FONT></B><B><I><FONT face=serif>:</FONT></I></B>&nbsp;</TD>
     <TD align=left><FONT face=serif>On receipt</FONT>&nbsp;</TD></TR>
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     <TD align=left><B><FONT face=serif>MEDIA CONTACT:</FONT></B>&nbsp;</TD>
     <TD align=left><FONT face=serif>Susan Houser, 515-248-2268,</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif>Houser.Susan@principal.com</FONT>&nbsp;</TD></TR>
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     <TD align=left><B><FONT face=serif size=2>INVESTOR RELATIONS CONTACT:</FONT></B>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>Tom Graf, 515-235-9500,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>investor-relations@principal.com</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PRINCIPAL FINANCIAL GROUP, INC. REPORTS THIRD QUARTER 2009 RESULTS</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif size=2>Des Moines, IA (November 2, 2009) &#150; Principal Financial Group, Inc. (NYSE: PFG) today announced net</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>income available to common stockholders for the three months ended September 30, 2009, of $184.7 million,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>or $0.57 per diluted share compared to $90.1 million, or $0.35 per diluted share for the three months ended</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>September 30, 2008. The company reported operating earnings of $238.7 million for third quarter 2009,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>compared to $251.2 million for third quarter 2008. Operating earnings per diluted share (EPS) for third quarter</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>2009 were $0.74 compared to $0.96 for the same period in 2008.</FONT><SUP><FONT face=serif size=2>1 </FONT></SUP><FONT face=serif size=2>The decline in operating earnings from a</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>year ago reflects a number of items, including lower average assets under management (AUM), higher costs for</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>employee pension and other post-retirement benefits,</FONT><SUP><FONT face=serif size=2>2 </FONT></SUP><FONT face=serif size=2>lower investment income and unfavorable foreign</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>currency movements. These items were substantially offset by the company&#146;s expense management activities</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>and lower deferred policy acquisition cost (DPAC) amortization expense. The decline in per share results also</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>reflects the company&#146;s May 11, 2009 common stock offering, which increased weighted average shares</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>outstanding from 261.0 million for the quarter ending September 30, 2008, to 321.5 million for the quarter</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>ending September 30, 2009.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;Improved market conditions, and the positive impact of actions by management over the past</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>several quarters, contributed to a strong sequential increase in assets under management and operating</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>earnings,&#148; said Larry D. Zimpleman, chairman, president and chief executive officer.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Added Terry Lillis, senior vice president and chief financial officer, &#147;We also achieved strong</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>improvement in net income during the third quarter, our best result in two years. Since year-end 2008, book</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>value per share has nearly tripled, as narrowing credit spreads have driven down net unrealized losses by</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>more than $6 billion pre-tax. This improvement reaffirms the quality and diversification of our portfolio, the</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>discipline of our asset/liability management, and the strength of our capital and liquidity positions.&#148;</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left colSpan=2><FONT face=serif size=2>Highlights comparing third quarter 2009 to second quarter 2009:</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp; &#149;&nbsp;</FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Assets under management improved 9 percent, or $22.7 billion, to $280.4 billion as of September 30,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;2009.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Operating earnings improved 19 percent, reflecting double-digit improvement across all operating</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;segments.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD width="100%">_____________________</TD></TR>
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     <TD align=left><SUP><FONT face=serif size=2>1 </FONT></SUP><FONT face=serif size=2>Use of non-GAAP financial measures is discussed in this release after Segment Highlights.</FONT>&nbsp;</TD></TR>
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     <TD align=left><SUP><FONT face=serif size=2>2 </FONT></SUP><FONT face=serif size=2>Formerly known as SFAS 87 Pension Expense and SFAS 106 Other Post-Retirement Benefits. The increase from a year ago was</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>primarily the result of negative market performance in 2008.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Net income available to common stockholders improved 23 percent, reflecting higher operating earnings</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;and a comparable level of net realized capital losses.</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;GAAP book value per share improved 35 percent, or $5.66 to $21.85.</FONT>&nbsp;</TD></TR></TABLE>
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     <TD align=left width="100%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;While confidence in the capital markets improved again in the third quarter, we expect the</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>economic recovery will be more protracted, and that near-term, business activity will remain muted,&#148; said</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>Zimpleman. &#147;In this environment, we continue to manage all our resources with care, as we focus on</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>positioning the company for sustainable, profitable growth as the recovery takes hold over time.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>&#147;Although businesses and institutional investors remain cautious, which has impacted sales and net</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>cash flows, we&#146;re seeing some early signs of progress. Full service accumulation sales quote activity was 30</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>percent higher in September than January. And recently, we&#146;re seeing signs of increased search activity</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>from institutional investors. While it will take several quarters for pipeline to turn into sales and then</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>deposits, we are cautiously optimistic about sales and flows as we move into 2010.&#148;</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left colSpan=2><B><FONT face=serif size=2>Additional Business Highlights</FONT></B><FONT face=serif size=2>:</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><B><FONT face=serif size=2>&nbsp;Expense management</FONT></B><FONT face=serif size=2>: management action reduced the fixed component of compensation and other</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;expenses $225 million or 16 percent comparing the nine months ended September 30, 2009 to the same</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;period a year ago.</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><B><FONT face=serif size=2>&nbsp;Strong capital and liquidity</FONT></B><FONT face=serif size=2>: the company&#146;s position in liquid assets was $7.3 billion as of September</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;30, 2009, and its excess capital position</FONT><SUP><FONT face=serif size=2>3 </FONT></SUP><FONT face=serif size=2>was approximately $1.5 billion.</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><B><FONT face=serif size=2>&nbsp;Solid sales in a difficult sales environment</FONT></B><FONT face=serif size=2>: the company&#146;s three key retirement and investment</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;products generated $2.7 billion of sales, on a combined basis in third quarter 2009, with $0.5 billion</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;of sales for full service accumulation, $1.9 billion for Principal Funds, and $0.3 billion for</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;individual annuities.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>Net Income</FONT></B>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>Net income available to common stockholders of $184.7 million for third quarter 2009 reflects net realized</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>capital losses of $53.5 million, which includes: $69.7 million of losses related to sales and permanent</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>impairments of fixed maturity securities, partially offset by $25.2 million of gains related to sales of fixed</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>maturity securities; $22.3 million of losses on commercial mortgage loans; $7.9 million of losses on</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>derivatives and related hedge activities; $11.3 million of gains related to deferred policy acquisition costs;</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>and $10.2 million of gains on mark to market of fixed maturity securities held as trading.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><I><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment Highlights</FONT></I></B>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>U.S. Asset Accumulation</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment operating earnings for third quarter 2009 were $154.6 million, compared to $136.5 million</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>for the same period in 2008, primarily due to variances in three businesses. Full service accumulation earnings</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>increased $6.1 million from a year ago to $70.6 million for third quarter 2009. The increase primarily reflects</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>DPAC true-ups in both periods due to equity market performance, which reduced DPAC amortization expense</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>in third quarter 2009 by $4.8 million after-tax, and increased expense in third quarter 2008 by $6.2 million</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>after-tax. Individual annuities earnings increased $20.2 million from a year ago to $36.1 million for third</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>quarter 2009. The increase also primarily reflects DPAC true-ups in both periods due to equity market</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 5</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif size=2>performance, which reduced DPAC amortization expense in third quarter 2009 by $7.0 million after-tax, and</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>increased expense in third quarter 2008 by $5.3 million after-tax. The increase in individual annuities earnings</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>also reflects a 7 percent increase in average account values. Partially offsetting these increases was a $7.2</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>million decline in earnings compared to a year ago in the full service payout business due to lower net</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>investment income and lower mortality gains.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating revenues for the third quarter were $1,025.6 million, compared to $1,237.5 million for</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>the same period in 2008. The decline primarily reflects lower net investment income in the investment only</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>business, which the company has been scaling back over the past several quarters, and lower premiums in the</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>individual annuities business due to lower sales of fixed deferred annuities.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment assets under management were $158.8 billion as of September 30, 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>$160.7 billion as of September 30, 2008.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>Global Asset Management</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment operating earnings for third quarter 2009 were $10.5 million, compared to $23.5 million in</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>the prior year quarter, reflecting a 12 percent decline in average assets under management, lower fees due to a</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>slowdown in the real estate market, and higher costs for employee pension and other post-retirement benefits.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating revenues for third quarter were $111.3 million, compared to $141.7 million for the same</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>period in 2008.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Non-affiliated assets under management were $73.2 billion as of September 30, 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>$82.9 billion as of September 30, 2008.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>International Asset Management and Accumulation</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment operating earnings for third quarter 2009 were $33.1 million compared to $44.4 million</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>for the same period in 2008. Third quarter 2009 earnings were dampened by deflation in Chile, which</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>reduced earnings by $3.5 million. Third quarter 2008 earnings included a $5.0 million unlocking benefit for</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>price changes in Brazil and a $7.1 million experience benefit from higher yields on invested assets in Chile</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>due to unusually high inflation. Adjusting for these items impacting comparability between periods, segment</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>earnings increased 13 percent compared to the year ago quarter.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating revenues were $156.1 million for third quarter, compared to $265.5 million for the same</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>period last year, primarily the result of lower investment returns due to deflation in Chile in third quarter 2009.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment assets under management were $31.4 billion as of September 30, 2009, compared to</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>$28.6 billion as of September 30, 2008. Had currency rates remained unchanged from 2008, segment assets</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>under management would have increased 17 percent over last year.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD width="100%">____________________</TD></TR>
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     <TD align=left><SUP><FONT face=serif size=2>3 </FONT></SUP><FONT face=serif size=2>Excess capital includes cash at the holding company and capital at the life company above what is needed to maintain a 350</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>percent NAIC risk based capital ratio for the life company.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 6</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>Life and Health Insurance</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Segment operating earnings for third quarter 2009 were $68.2 million, compared to $73.9 million</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>for the same period in 2008. Individual Life earnings increased to $29.8 million compared to $21.2 million</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>in third quarter 2008, primarily due to DPAC true-ups in both periods due to equity market performance,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>which reduced DPAC amortization expense in third quarter 2009 by $2.9 million after-tax, and increased</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>expense in third quarter 2008 by $3.6 million after-tax. Health earnings were $12.0 million in third quarter</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>2009. This compares to $21.5 million for third quarter 2008, which benefited from more favorable</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>development of prior quarter claims. Specialty Benefits earnings were $26.4 million compared to a record</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>$31.2 million in third quarter 2008. In addition to higher costs for employee pension and other post-</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>retirement benefits in third quarter 2009 than third quarter 2008, results for the Health and Specialty Benefits</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>divisions also reflect a reduction in the number of members in existing plans and lower investment income.</FONT>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating revenues for third quarter were $1,104.2 million, compared to $1,158.9 million for the</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>same period a year ago. The decline was primarily due to a 7 percent decline in Health division premiums,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>which primarily reflects a decline in group medical covered members.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>Corporate and Other</FONT></B>&nbsp;</TD></TR>
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     <TD align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=serif size=2>Operating losses for third quarter 2009 were $27.7 million, compared to operating losses of $27.1</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>million for the same period in 2008.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>Other-than-temporary impairments for third quarter 2009</FONT></B>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>On April 9, 2009, the Financial Accounting Standards Board established new requirements for measuring</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>and presenting other-than-temporary impairment charges on available for sale securities, which the Company</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>adopted with first quarter 2009 reporting. Based on the new requirements, on a pre-tax basis, total other than</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>temporary impairment losses on available for sale securities were $162.5 million and the noncredit portion of</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>loss recognized in other comprehensive income was $45.3 million. Net impairment losses on available for</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>sale securities of $117.2 million for third quarter 2009 reflect: the company&#146;s actions to reduce asset ratings</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>drift risk by selling or tendering certain securities, which resulted in a loss of $20.8 million; and deterioration</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>in expected cash flows, which resulted in a $28.6 million net impairment charge on non-agency residential</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>mortgage backed securities and residential collateralized debt obligations, and a $17.8 million net</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>impairment of commercial mortgage backed securities and commercial mortgage backed collateralized debt</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>obligations. The remainder of the net impairment losses for third quarter 2009 primarily relates to</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>impairments of corporate credits.</FONT>&nbsp;</TD></TR>
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     <TD>&nbsp;</TD></TR>
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     <TD align=left><B><FONT face=serif size=2>Forward looking and cautionary statements</FONT></B>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>This press release contains forward-looking statements, including, without limitation, statements as to</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>operating earnings, net income available to common stockholders, net cash flows, realized and unrealized</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations,</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>goals and opinions. The company does not undertake to update or revise these statements, which are based</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>events and their effects on the company may not be those anticipated, and actual results may differ materially</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>could cause or contribute to such material differences are discussed in the company's annual report on Form</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>10-K for the year ended December 31, 2008, and in company&#146;s quarterly report on Form 10-Q for the quarter</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>ended June 30, 2009, filed by the company with the Securities and Exchange Commission, as updated or</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>supplemented from time to time in subsequent filings. These risks and uncertainties include, without</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>limitation: adverse capital and credit market conditions that may significantly affect the company&#146;s ability to</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif size=2>meet liquidity needs, access to capital and cost of capital; a continuation of difficult conditions in the global</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>capital markets and the general economy that may materially adversely affect the company&#146;s business and</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>results of operations; the actions of the U.S. government, Federal Reserve and other governmental and</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended effect; the</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets</FONT>&nbsp;</TD></TR>
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     <TD align=left><FONT face=serif size=2>recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>company; investment risks which may diminish the value of the company&#146;s invested assets and the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>investment returns credited to customers, which could reduce sales, revenues, assets under management and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>net income; requirements to post collateral or make payments related to declines in market value of specified</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.&#146;s primary</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>default of the company&#146;s re-insurers.</FONT>&nbsp;</TD></TR>
<TR>
     <TD>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Use of Non-GAAP Financial Measures</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>The company uses a number of non-GAAP financial measures that management believes are useful to</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>investors because they illustrate the performance of normal, ongoing operations, which is important in</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>understanding and evaluating the company&#146;s financial condition and results of operations. They are not,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>however, a substitute for U.S. GAAP financial measures. Therefore, the company has provided</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure at the end</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>of the release. The company adjusts <FONT face=serif size=2>U.S. GAAP measures for items not directly related to ongoing operations. </FONT></FONT></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>However, it is possible these</FONT>&nbsp;<FONT face=serif size=2>adjusting items have occurred in the past and could recur in the future reporting </FONT></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>periods. Management also</FONT>&nbsp;<FONT face=serif size=2>uses non-GAAP measures for goal setting, as a basis for determining employee</FONT></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>and senior management awards</FONT>&nbsp;<FONT face=serif size=2>and compensation, and evaluating performance on a basis comparable</FONT></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>to that used by investors and securities analysts.</FONT></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 width="100%" border=0>
<TR>
     <TD width="2%"></TD>
     <TD width="97%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2><B><FONT face=serif size=2>Earnings Conference Call</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2><FONT face=serif size=2>At 4:30 P.M. (CST) today, Chairman, President and Chief Executive Officer Larry Zimpleman and Senior</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2><FONT face=serif size=2>Vice President and Chief Financial Officer Terry Lillis will lead a discussion of results, asset quality and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2>
<P><FONT face=serif size=2>capital adequacy during a live conference call, which can be accessed as follows:</FONT>&nbsp;</P>
</TD></TR>
<TR height=10>
     <TD style="TEXT-INDENT: 0px" align=left></TD>
     <TD align=left></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Via live Internet webcast. Please go to </FONT><FONT face=serif size=2><U>www.principal.com/investor</U> </FONT><FONT face=serif size=2>at least 10-15 minutes prior to the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;start of the call to register, and to download and install any necessary audio software.</FONT>&nbsp;</TD></TR>
<TR height=10>
     <TD style="TEXT-INDENT: 0px" colSpan=2>
<P>&nbsp;</P>
</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;callers) approximately 10 minutes prior to the start of the call. The call leader's name is Tom Graf.</FONT>&nbsp;</TD></TR>
<TR height=10>
     <TD style="TEXT-INDENT: 0px" colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;<FONT face=serif size=2>&#149;&nbsp;</FONT></FONT></TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Replays of the earnings call are available at: </FONT><FONT face=serif size=2><U>www.principal.com/investor</U> </FONT><FONT face=serif size=2>or by dialing 800-642-1687</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;(U.S. and Canadian callers) or 706-645-9291 (International callers). The access code is 33374311.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;Replays will be available approximately two hours after the completion of the live earnings call through</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=left><FONT face=serif size=2>&nbsp;the end of day November 10, 2009.</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2><FONT face=serif size=2>The company's financial supplement and additional investment portfolio detail for third quarter 2009 is</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=2><FONT face=serif size=2>currently available at </FONT><U><FONT face=serif size=2>www.principal.com/investor</FONT></U><FONT face=serif size=2>, and may be referred to during the call.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 8</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><FONT face=serif size=2>About the Principal Financial Group</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>The Principal Financial Group<FONT face=serif size=2></FONT><SUP><FONT face=serif size=2>&#174;</FONT></SUP></FONT><FONT face=serif size=1> </FONT><FONT face=serif size=2>(The Principal </FONT><SUP><FONT face=serif size=2>&#174; </FONT></SUP><FONT face=serif size=2>)</FONT><SUP><FONT face=serif size=2>4 </FONT></SUP><FONT face=serif size=2>is a leader in offering businesses, individuals and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>institutional clients a wide range of financial products and services, including retirement and investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>services, life and health insurance, and banking through its diverse family of financial services companies. A</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>member of the Fortune 500, the Principal Financial Group has $280.4 billion in assets under management</FONT><SUP><FONT face=serif size=2>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>and serves some 18.6 million customers worldwide from offices in Asia, Australia, Europe, Latin America</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>ticker symbol PFG. For more information, visit </FONT><U><FONT face=serif size=2>www.principal.com</FONT></U><FONT face=serif size=2>.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD width="100%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ###</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>_______________________</P>
</TD></TR>
<TR vAlign=bottom>
     <TD align=left><SUP><FONT face=serif size=1>4 </FONT></SUP><FONT face=serif size=1>"The Principal Financial Group" and &#147;The Principal&#148; are registered service marks of Principal Financial Services, Inc., a member of the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=1>Principal Financial Group.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><SUP><FONT face=serif size=1>5 </FONT></SUP><FONT face=serif size=1>As of September 30, 2009</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 9</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><B><I><FONT face=serif size=2>Summary of Segment and Principal Financial Group, Inc. Results</FONT></I></B>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 rules=all width="85%" border=1>
<TR>
     <TD width="50%"></TD>
     <TD width="13%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="9%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=center colSpan=4 rowSpan=2><B><FONT face=serif>Operating Earnings (Loss)*</FONT></B><BR>
<B><I><FONT face=serif>in millions</FONT></I></B></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD align=right colSpan=2><I><FONT face=serif>Three Months Ended,</FONT></I>&nbsp;</TD>
     <TD align=right colSpan=2><I><FONT face=serif>Nine Months Ended,</FONT></I>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><I><FONT face=serif>Segment</FONT></I></B>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/09</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/08</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/09</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/08</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>U.S. Asset Accumulation</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$154.6</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$136.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$385.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$428.5</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Global Asset Management</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>10.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>23.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>25.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>67.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>International Asset Management and Accumulation</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>33.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>44.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>79.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>107.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Life and Health Insurance</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>68.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>73.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>197.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>219.8</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Corporate and Other</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(27.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(27.1)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(84.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(59.9)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><I><FONT face=serif>Operating Earnings</FONT></I></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>238.7</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>251.2</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>603.2</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>763.7</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Net realized capital losses, as adjusted</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(53.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(156.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(154.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(316.4)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Other after-tax adjustments</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(4.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(14.7)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><I><FONT face=serif>Net income available to common stockholders</FONT></I></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$184.7</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$90.1</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$447.8</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$432.6</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD bgColor=#808080 colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left rowSpan=3></TD>
     <TD align=center colSpan=4><B><FONT face=serif>Per Diluted Share</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD align=right colSpan=2><I><FONT face=serif>Three Months Ended,</FONT></I>&nbsp;</TD>
     <TD align=right colSpan=2><I><FONT face=serif>Nine Months Ended,</FONT></I>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><FONT face=serif>9/30/09</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/08</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/09</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif>9/30/08</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><I><FONT face=serif>Operating Earnings</FONT></I></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$0.74</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$0.96</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$2.07</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$2.92</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Net realized capital losses, as adjusted</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.17)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.60)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.53)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(1.21)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><I><FONT face=serif>Other after-tax adjustments</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.00)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.01)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.00)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.05)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><I><FONT face=serif>Net income available to common stockholders</FONT></I></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$0.57</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$0.35</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$1.54</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>$1.66</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right rowSpan=2><B><I><FONT face=serif>Weighted-average diluted common shares</FONT></I></B><BR>
<B><I><FONT face=serif>outstanding</FONT></I></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=right><B><FONT face=serif size=2>321.5</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>261.0</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>291.1</FONT></B>&nbsp;</TD>
     <TD align=right><B><FONT face=serif size=2>261.3</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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     <TD width="100%">
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>*Operating earnings versus U.S. GAAP (GAAP) net income available to common stockholders</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Management uses operating earnings, which excludes the effect of net realized capital gains and losses, as adjusted, and other after-</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>tax adjustments, for goal setting, as a basis for determining employee compensation, and evaluating performance on a basis</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>comparable to that used by investors and securities analysts. Segment operating earnings are determined by adjusting U.S. GAAP</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>net income available to common stockholders for net realized capital gains and losses, as adjusted, and other after-tax adjustments</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>the company believes are not indicative of overall operating trends. Note: it is possible these adjusting items have occurred in the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>past and could recur in future reporting periods. While these items may be significant components in understanding and assessing</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>our consolidated financial performance, management believes the presentation of segment operating earnings enhances the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>understanding of results of operations by highlighting earnings attributable to the normal, ongoing operations of the company&#146;s</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>businesses.</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD style="BORDER-RIGHT: #000000 1pt solid" align=center><B><FONT face=serif size=2>Principal Financial Group, Inc.</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-RIGHT: #000000 1pt solid" align=center><B><FONT face=serif size=2>Results of Operations</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center><B><FONT face=serif size=2>(in millions)</FONT></B></TD></TR></TABLE>
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     <TD width="38%"></TD>
     <TD width="16%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center colSpan=2><B><FONT face=serif size=2>Three Months Ended,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center colSpan=2><B><FONT face=serif size=2>Nine Months Ended,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9/30/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face=serif size=2>9/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><B><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9/30/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Premiums and other considerations</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 932.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,049.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,820.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,258.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Fees and other revenues</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>550.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>599.0</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,539.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,834.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net investment income</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>853.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,079.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>2,541.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,030.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital gains (losses), excluding</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>impairment losses on available-for-sale</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>securities</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>50.6</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(20.9)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>62.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(145.0)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total other-than-temporary impairment losses</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>on available-for-sale securities</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(162.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(209.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(510.0)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(323.1)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Portion of impairment losses on fixed</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>maturities, available-for-sale recognized</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>in other comprehensive income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>45.3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>162.4</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net impairment losses on available-for-sale</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>securities</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(117.2)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(209.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(347.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(323.1)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital losses</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(66.6)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(230.6)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(285.1)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(468.1)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><I><FONT face=serif size=2>Total revenues</FONT></I>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>2,270.3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>2,497.8</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>6,616.7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>7,656.6</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Benefits, claims and settlement expenses</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,317.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,597.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,958.0</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>4,703.2</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Dividends to policyholders</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>61.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>70.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>188.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>210.2</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Operating expenses</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>643.0</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>723.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,894.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>2,217.0</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><I><FONT face=serif size=2>Total expenses</FONT></I>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>2,022.0</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>2,391.3</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>6,040.4</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>7,130.4</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Income before income taxes</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>248.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>106.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>576.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>526.2</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Income taxes (benefits)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>44.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(2.2)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>85.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>56.8</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net income</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>204.2</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>108.7</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>490.8</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>469.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net income attributable to noncontrolling</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>interest</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>11.3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>10.4</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>18.3</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>12.1</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><I><FONT face=serif size=2>Net income attributable to PFG</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>192.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>98.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>472.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>457.3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Preferred stock dividends</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>8.2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>8.2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>24.7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>24.7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><I><FONT face=serif size=2>Net income available to common stockholders</FONT></I>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;184.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;447.8</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 432.6</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Less:</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital losses, as adjusted</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(53.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(156.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(154.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(316.4)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Other after-tax adjustments</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(0.5)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(4.8)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(0.8)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(14.7)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><I><FONT face=serif size=2>Operating earnings</FONT></I>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;238.7</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 251.2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;603.2</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;763.7</FONT>&nbsp;</TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>
<TR>
     <TD width="46%"></TD>
     <TD width="17%"></TD>
     <TD width="21%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left colSpan=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 face=serif size=2>Selected Balance Sheet Statistics</FONT></I></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center colSpan=3><B><FONT face=serif size=2>Period Ended,</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9/30/09</FONT>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/08</FONT>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9/30/08</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total assets (in billions)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 137.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 128.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 143.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total common equity (in millions)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 6,966.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 1,930.8</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 5,070.6</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total common equity excluding accumulated</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>other comprehensive income (in millions)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 8,400.8</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 6,842.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 6,957.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>End of period common shares outstanding (in</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=serif size=2>millions)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>318.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>259.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>259.2</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Book value per common share</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 21.85</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 7.45</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 19.56</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Book value per common share excluding</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp; &nbsp; &nbsp;<FONT face=serif size=2>accumulated other comprehensive income</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 26.34</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 26.39</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>$ 26.84</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=left><FONT face=serif>Page 11</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD align=center><B><FONT face=serif size=2>Principal Financial Group, Inc.</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD align=center><B><FONT face=serif size=2>Reconciliation of Non-GAAP Financial Measures to U.S. GAAP</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center><B><FONT face=serif size=2>(in millions, except as indicated)</FONT></B></TD></TR></TABLE><BR>
<TABLE cellSpacing=0 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="50%"></TD>
     <TD width="14%"></TD>
     <TD width="12%"></TD>
     <TD width="12%"></TD>
     <TD width="10%"></TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center colSpan=2><B><FONT face=serif size=2>Three Months Ended,</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=center colSpan=2><B><FONT face=serif size=2>Nine Months Ended,</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-LEFT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><B><FONT face=serif size=2>09/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><B><FONT face=serif size=2>09/30/08</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><B><FONT face=serif size=2>09/30/09</FONT></B>&nbsp;</TD>
     <TD style="BORDER-RIGHT: #000000 1pt solid; BORDER-BOTTOM: #000000 1pt solid" align=right><B><FONT face=serif size=2>09/30/08</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Diluted Earnings Per Common Share:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Operating Earnings</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>0.74</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>0.96</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>2.07</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>2.92</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital losses</FONT>&nbsp;</TD>
     <TD align=right>&nbsp;<FONT face=serif size=2>(0.17)</FONT>&nbsp;</TD>
     <TD align=right>&nbsp;<FONT face=serif size=2>(0.60)</FONT></TD>
     <TD align=right>&nbsp;<FONT face=serif size=2>(0.53)</FONT>&nbsp;</TD>
     <TD align=right>&nbsp;<FONT face=serif size=2>(1.21)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Other after-tax adjustments</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" 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;<FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(0.01)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=center><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(0.05)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net income available to common stockholders</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>0.57</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>0.35</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>1.54</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>1.66</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Book Value Per Common Share Excluding Accumulated Other</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Comprehensive Income:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Book value per common share excluding accumulated other</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; comprehensive income</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>26.34</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>26.84</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>26.34</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>26.84</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net unrealized capital losses</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(2.67)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(7.58)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(2.67)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(7.58)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Foreign currency translation</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.18)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>0.07</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.18)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>0.07</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net unrecognized post-retirement benefit obligations</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(1.64)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif><FONT face=serif size=2>0.23</FONT></FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(1.64)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif><FONT face=serif><FONT face=serif size=2>0.23</FONT></FONT></FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Book value per common share including accumulated other</FONT>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; comprehensive income</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>21.85</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>19.56</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>21.85</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>19.56</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Operating Revenues:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>USAA</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,025.6</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,237.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,024.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,697.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>GAM</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>111.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>141.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>319.0</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>425.0</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>IAMA</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>156.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>265.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>381.8</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>700.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Life and Health</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,104.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1,158.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,352.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3,527.1</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Corporate and Other</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(40.1)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(52.4)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(123.2)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(152.3)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total operating revenues</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>2,357.1</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>2,751.2</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>6,954.1</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid" align=right><FONT face=serif size=2>8,198.1</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital losses and related adjustments</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(86.2)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(248.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(336.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(517.5)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Terminated commercial mortgage securities issuance operation</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(5.1)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(24.0)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total GAAP revenues</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>2,270.3</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>2,497.8</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>6,616.7</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>7,656.6</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Operating Earnings:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>USAA</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>154.6</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>136.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>385.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>428.5</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>GAM</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>10.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>23.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>25.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>67.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>IAMA</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>33.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>44.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>79.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>107.9</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Life and Health</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>68.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>73.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>197.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>219.8</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Corporate and Other</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(27.7)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(27.1)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(84.5)</FONT>&nbsp;</TD>
     <TD style="BORDER-BOTTOM: #000000 1pt solid" align=right><FONT face=serif size=2>(59.9)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total operating earnings</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>238.7</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>251.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>603.2</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>763.7</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital losses</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(53.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(156.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(154.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(316.4)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Other after-tax adjustments</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(4.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(14.7)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net income available to common stockholders</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>184.7</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>90.1</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>447.8</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>432.6</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Net Realized Capital Gains (losses):</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Net realized capital gains losses, as adjusted</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(53.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(156.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(154.6)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(316.4)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Periodic settlements and accruals on non-hedge derivatives</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>20.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>17.6</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>48.0</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>45.8</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Amortization of DPAC and sale inducement costs</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(16.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(16.2)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(106.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(46.1)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Certain market value adjustments of embedded derivatives</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(2.3)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3.3</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(8.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>6.5</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Capital gains (losses) distributed</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>7.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(11.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>14.4</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(14.2)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Tax impacts</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(31.1)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(75.4)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(96.9)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(151.7)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Noncontrolling interest capital gains</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>9.9</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>8.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>15.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>4.4</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Recognition of front-end fee revenues</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.7)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>2.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Certain market value adjustments to fee revenues</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>0.1</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>1.5</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>3.6</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>GAAP net realized capital losses</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(66.6)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(230.6)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(285.1)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(468.1)</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><B><FONT face=serif size=2>Other After Tax Adjustments:</FONT></B>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD>
     <TD align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Change in estimated loss related to a prior year legal contingency</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>-</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>7.6</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Terminated commercial mortgage securities issuance operation</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.5)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(4.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(0.8)</FONT>&nbsp;</TD>
     <TD align=right><FONT face=serif size=2>(22.3)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=left><FONT face=serif size=2>Total other after-tax adjustments</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(0.5)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(4.8)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(0.8)</FONT>&nbsp;</TD>
     <TD style="BORDER-TOP: #000000 1pt solid; BORDER-BOTTOM: #000000 2pt double" align=right><FONT face=serif size=2>(14.7)</FONT>&nbsp;</TD></TR></TABLE><BR>
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final3rdqtrer.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:
November 2, 2009
(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 November 2, 2009, Principal Financial Group, Inc. publicly announced information regarding
its results of operations and financial condition for the quarter ended September 30, 2009. The text
of the announcement is included herewith as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
99   Third Quarter 2009 Earnings Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
PRINCIPAL FINANCIAL GROUP, INC.
By:
/s/ Terrance J. Lillis
Name:   Terrance J. Lillis
Title:
Senior Vice President and Chief Financial
Officer
Date:
November 2, 2009
Page 3
EXHIBIT 99
RELEASE
:
On receipt
MEDIA CONTACT:
Susan Houser, 515-248-2268,
Houser.Susan@principal.com
INVESTOR RELATIONS CONTACT:
Tom Graf, 515-235-9500,
investor-relations@principal.com
PRINCIPAL FINANCIAL GROUP, INC. REPORTS THIRD QUARTER 2009 RESULTS
Des Moines, IA (November 2, 2009) – Principal Financial Group, Inc. (NYSE: PFG) today announced net
income available to common stockholders for the three months ended September 30, 2009, of $184.7 million,
or $0.57 per diluted share compared to $90.1 million, or $0.35 per diluted share for the three months ended
September 30, 2008. The company reported operating earnings of $238.7 million for third quarter 2009,
compared to $251.2 million for third quarter 2008. Operating earnings per diluted share (EPS) for third quarter
2009 were $0.74 compared to $0.96 for the same period in 2008.
1
The decline in operating earnings from a
year ago reflects a number of items, including lower average assets under management (AUM), higher costs for
employee pension and other post-retirement benefits,
2
lower investment income and unfavorable foreign
currency movements. These items were substantially offset by the company's expense management activities
and lower deferred policy acquisition cost (DPAC) amortization expense. The decline in per share results also
reflects the company's May 11, 2009 common stock offering, which increased weighted average shares
outstanding from 261.0 million for the quarter ending September 30, 2008, to 321.5 million for the quarter
ending September 30, 2009.
"Improved market conditions, and the positive impact of actions by management over the past
several quarters, contributed to a strong sequential increase in assets under management and operating
earnings," said Larry D. Zimpleman, chairman, president and chief executive officer.
Added Terry Lillis, senior vice president and chief financial officer, "We also achieved strong
improvement in net income during the third quarter, our best result in two years. Since year-end 2008, book
value per share has nearly tripled, as narrowing credit spreads have driven down net unrealized losses by
more than $6 billion pre-tax. This improvement reaffirms the quality and diversification of our portfolio, the
discipline of our asset/liability management, and the strength of our capital and liquidity positions."
Highlights comparing third quarter 2009 to second quarter 2009:
•
Assets under management improved 9 percent, or $22.7 billion, to $280.4 billion as of September 30,
2009.
•
Operating earnings improved 19 percent, reflecting double-digit improvement across all operating
segments.
_____________________
1
Use of non-GAAP financial measures is discussed in this release after Segment Highlights.
2
Formerly known as SFAS 87 Pension Expense and SFAS 106 Other Post-Retirement Benefits. The increase from a year ago was
primarily the result of negative market performance in 2008.
Page 4
•
Net income available to common stockholders improved 23 percent, reflecting higher operating earnings
and a comparable level of net realized capital losses.
•
GAAP book value per share improved 35 percent, or $5.66 to $21.85.
"While confidence in the capital markets improved again in the third quarter, we expect the
economic recovery will be more protracted, and that near-term, business activity will remain muted," said
Zimpleman. "In this environment, we continue to manage all our resources with care, as we focus on
positioning the company for sustainable, profitable growth as the recovery takes hold over time.
"Although businesses and institutional investors remain cautious, which has impacted sales and net
cash flows, we're seeing some early signs of progress. Full service accumulation sales quote activity was 30
percent higher in September than January. And recently, we're seeing signs of increased search activity
from institutional investors. While it will take several quarters for pipeline to turn into sales and then
deposits, we are cautiously optimistic about sales and flows as we move into 2010."
Additional Business Highlights
:
•
Expense management
: management action reduced the fixed component of compensation and other
expenses $225 million or 16 percent comparing the nine months ended September 30, 2009 to the same
period a year ago.
•
Strong capital and liquidity
: the company's position in liquid assets was $7.3 billion as of September
30, 2009, and its excess capital position
3
was approximately $1.5 billion.
•
Solid sales in a difficult sales environment
: the company's three key retirement and investment
products generated $2.7 billion of sales, on a combined basis in third quarter 2009, with $0.5 billion
of sales for full service accumulation, $1.9 billion for Principal Funds, and $0.3 billion for
individual annuities.
Net Income
Net income available to common stockholders of $184.7 million for third quarter 2009 reflects net realized
capital losses of $53.5 million, which includes: $69.7 million of losses related to sales and permanent
impairments of fixed maturity securities, partially offset by $25.2 million of gains related to sales of fixed
maturity securities; $22.3 million of losses on commercial mortgage loans; $7.9 million of losses on
derivatives and related hedge activities; $11.3 million of gains related to deferred policy acquisition costs;
and $10.2 million of gains on mark to market of fixed maturity securities held as trading.
Segment Highlights
U.S. Asset Accumulation
Segment operating earnings for third quarter 2009 were $154.6 million, compared to $136.5 million
for the same period in 2008, primarily due to variances in three businesses. Full service accumulation earnings
increased $6.1 million from a year ago to $70.6 million for third quarter 2009. The increase primarily reflects
DPAC true-ups in both periods due to equity market performance, which reduced DPAC amortization expense
in third quarter 2009 by $4.8 million after-tax, and increased expense in third quarter 2008 by $6.2 million
after-tax. Individual annuities earnings increased $20.2 million from a year ago to $36.1 million for third
quarter 2009. The increase also primarily reflects DPAC true-ups in both periods due to equity market
Page 5
performance, which reduced DPAC amortization expense in third quarter 2009 by $7.0 million after-tax, and
increased expense in third quarter 2008 by $5.3 million after-tax. The increase in individual annuities earnings
also reflects a 7 percent increase in average account values. Partially offsetting these increases was a $7.2
million decline in earnings compared to a year ago in the full service payout business due to lower net
investment income and lower mortality gains.
Operating revenues for the third quarter were $1,025.6 million, compared to $1,237.5 million for
the same period in 2008. The decline primarily reflects lower net investment income in the investment only
business, which the company has been scaling back over the past several quarters, and lower premiums in the
individual annuities business due to lower sales of fixed deferred annuities.
Segment assets under management were $158.8 billion as of September 30, 2009, compared to
$160.7 billion as of September 30, 2008.
Global Asset Management
Segment operating earnings for third quarter 2009 were $10.5 million, compared to $23.5 million in
the prior year quarter, reflecting a 12 percent decline in average assets under management, lower fees due to a
slowdown in the real estate market, and higher costs for employee pension and other post-retirement benefits.
Operating revenues for third quarter were $111.3 million, compared to $141.7 million for the same
period in 2008.
Non-affiliated assets under management were $73.2 billion as of September 30, 2009, compared to
$82.9 billion as of September 30, 2008.
International Asset Management and Accumulation
Segment operating earnings for third quarter 2009 were $33.1 million compared to $44.4 million
for the same period in 2008. Third quarter 2009 earnings were dampened by deflation in Chile, which
reduced earnings by $3.5 million. Third quarter 2008 earnings included a $5.0 million unlocking benefit for
price changes in Brazil and a $7.1 million experience benefit from higher yields on invested assets in Chile
due to unusually high inflation. Adjusting for these items impacting comparability between periods, segment
earnings increased 13 percent compared to the year ago quarter.
Operating revenues were $156.1 million for third quarter, compared to $265.5 million for the same
period last year, primarily the result of lower investment returns due to deflation in Chile in third quarter 2009.
Segment assets under management were $31.4 billion as of September 30, 2009, compared to
$28.6 billion as of September 30, 2008. Had currency rates remained unchanged from 2008, segment assets
under management would have increased 17 percent over last year.
____________________
3
Excess capital includes cash at the holding company and capital at the life company above what is needed to maintain a 350
percent NAIC risk based capital ratio for the life company.
Page 6
Life and Health Insurance
Segment operating earnings for third quarter 2009 were $68.2 million, compared to $73.9 million
for the same period in 2008. Individual Life earnings increased to $29.8 million compared to $21.2 million
in third quarter 2008, primarily due to DPAC true-ups in both periods due to equity market performance,
which reduced DPAC amortization expense in third quarter 2009 by $2.9 million after-tax, and increased
expense in third quarter 2008 by $3.6 million after-tax. Health earnings were $12.0 million in third quarter
2009. This compares to $21.5 million for third quarter 2008, which benefited from more favorable
development of prior quarter claims. Specialty Benefits earnings were $26.4 million compared to a record
$31.2 million in third quarter 2008. In addition to higher costs for employee pension and other post-
retirement benefits in third quarter 2009 than third quarter 2008, results for the Health and Specialty Benefits
divisions also reflect a reduction in the number of members in existing plans and lower investment income.
Operating revenues for third quarter were $1,104.2 million, compared to $1,158.9 million for the
same period a year ago. The decline was primarily due to a 7 percent decline in Health division premiums,
which primarily reflects a decline in group medical covered members.
Corporate and Other
Operating losses for third quarter 2009 were $27.7 million, compared to operating losses of $27.1
million for the same period in 2008.
Other-than-temporary impairments for third quarter 2009
On April 9, 2009, the Financial Accounting Standards Board established new requirements for measuring
and presenting other-than-temporary impairment charges on available for sale securities, which the Company
adopted with first quarter 2009 reporting. Based on the new requirements, on a pre-tax basis, total other than
temporary impairment losses on available for sale securities were $162.5 million and the noncredit portion of
loss recognized in other comprehensive income was $45.3 million. Net impairment losses on available for
sale securities of $117.2 million for third quarter 2009 reflect: the company's actions to reduce asset ratings
drift risk by selling or tendering certain securities, which resulted in a loss of $20.8 million; and deterioration
in expected cash flows, which resulted in a $28.6 million net impairment charge on non-agency residential
mortgage backed securities and residential collateralized debt obligations, and a $17.8 million net
impairment of commercial mortgage backed securities and commercial mortgage backed collateralized debt
obligations. The remainder of the net impairment losses for third quarter 2009 primarily relates to
impairments of corporate credits.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to
operating earnings, net income available to common stockholders, net cash flows, realized and unrealized
losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations,
goals and opinions. The company does not undertake to update or revise these statements, which are based
on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future
events and their effects on the company may not be those anticipated, and actual results may differ materially
from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that
could cause or contribute to such material differences are discussed in the company's annual report on Form
10-K for the year ended December 31, 2008, and in company's quarterly report on Form 10-Q for the quarter
ended June 30, 2009, filed by the company with the Securities and Exchange Commission, as updated or
supplemented from time to time in subsequent filings. These risks and uncertainties include, without
limitation: adverse capital and credit market conditions that may significantly affect the company's ability to
Page 7
meet liquidity needs, access to capital and cost of capital; a continuation of difficult conditions in the global
capital markets and the general economy that may materially adversely affect the company's business and
results of operations; the actions of the U.S. government, Federal Reserve and other governmental and
regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended effect; the
risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets
recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the
company; investment risks which may diminish the value of the company's invested assets and the
investment returns credited to customers, which could reduce sales, revenues, assets under management and
net income; requirements to post collateral or make payments related to declines in market value of specified
assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes
in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign
currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.'s primary
reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and
regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of
financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales
representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and
default of the company's re-insurers.
Use of Non-GAAP Financial Measures
The company uses a number of non-GAAP financial measures that management believes are useful to
investors because they illustrate the performance of normal, ongoing operations, which is important in
understanding and evaluating the company's financial condition and results of operations. They are not,
however, a substitute for U.S. GAAP financial measures. Therefore, the company has provided
reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure at the end
of the release. The company adjusts
U.S. GAAP measures for items not directly related to ongoing operations.
However, it is possible these
adjusting items have occurred in the past and could recur in the future reporting
periods. Management also
uses non-GAAP measures for goal setting, as a basis for determining employee
and senior management awards
and compensation, and evaluating performance on a basis comparable
to that used by investors and securities analysts.
Earnings Conference Call
At 4:30 P.M. (CST) today, Chairman, President and Chief Executive Officer Larry Zimpleman and Senior
Vice President and Chief Financial Officer Terry Lillis will lead a discussion of results, asset quality and
capital adequacy during a live conference call, which can be accessed as follows:
•
Via live Internet webcast. Please go to
www.principal.com/investor
at least 10-15 minutes prior to the
start of the call to register, and to download and install any necessary audio software.
•
Via telephone by dialing 800-374-1609 (U.S. and Canadian callers) or 706-643-7701 (International
callers) approximately 10 minutes prior to the start of the call. The call leader's name is Tom Graf.
•
Replays of the earnings call are available at:
www.principal.com/investor
or by dialing 800-642-1687
(U.S. and Canadian callers) or 706-645-9291 (International callers). The access code is 33374311.
Replays will be available approximately two hours after the completion of the live earnings call through
the end of day November 10, 2009.
The company's financial supplement and additional investment portfolio detail for third quarter 2009 is
currently available at
www.principal.com/investor
, and may be referred to during the call.
Page 8
About the Principal Financial Group
The Principal Financial Group
®
(The Principal
®
)
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 $280.4 billion in assets under management
5
and serves some 18.6 million customers worldwide from offices in Asia, Australia, Europe, Latin America
and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit
www.principal.com
.
###
_______________________
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 September 30, 2009
Page 9
Summary of Segment and Principal Financial Group, Inc. Results
Operating Earnings (Loss)*
in millions
Three Months Ended,
Nine Months Ended,
Segment
9/30/09
9/30/08
9/30/09
9/30/08
U.S. Asset Accumulation
$154.6
$136.5
$385.1
$428.5
Global Asset Management
10.5
23.5
25.5
67.4
International Asset Management and Accumulation
33.1
44.4
79.4
107.9
Life and Health Insurance
68.2
73.9
197.7
219.8
Corporate and Other
(27.7)
(27.1)
(84.5)
(59.9)
Operating Earnings
238.7
251.2
603.2
763.7
Net realized capital losses, as adjusted
(53.5)
(156.3)
(154.6)
(316.4)
Other after-tax adjustments
(0.5)
(4.8)
(0.8)
(14.7)
Net income available to common stockholders
$184.7
$90.1
$447.8
$432.6
Per Diluted Share
Three Months Ended,
Nine Months Ended,
9/30/09
9/30/08
9/30/09
9/30/08
Operating Earnings
$0.74
$0.96
$2.07
$2.92
Net realized capital losses, as adjusted
(0.17)
(0.60)
(0.53)
(1.21)
Other after-tax adjustments
(0.00)
(0.01)
(0.00)
(0.05)
Net income available to common stockholders
$0.57
$0.35
$1.54
$1.66
Weighted-average diluted common shares
outstanding
321.5
261.0
291.1
261.3
*Operating earnings versus U.S. GAAP (GAAP) net income available to common stockholders
Management uses operating earnings, which excludes the effect of net realized capital gains and losses, as adjusted, and other after-
tax adjustments, for goal setting, as a basis for determining employee compensation, and evaluating performance on a basis
comparable to that used by investors and securities analysts. Segment operating earnings are determined by adjusting U.S. GAAP
net income available to common stockholders for net realized capital gains and losses, as adjusted, and other after-tax adjustments
the company believes are not indicative of overall operating trends. Note: it is possible these adjusting items have occurred in the
past and could recur in future reporting periods. While these items may be significant components in understanding and assessing
our consolidated financial performance, management believes the presentation of segment operating earnings enhances the
understanding of results of operations by highlighting earnings attributable to the normal, ongoing operations of the company's
businesses.
Page 10
Principal Financial Group, Inc.
Results of Operations
(in millions)
Three Months Ended,
Nine Months Ended,
9/30/09
9/30/08
9/30/09
9/30/08
Premiums and other considerations
$                    932.9
$                1,049.7
$                  2,820.5
$               3,258.9
Fees and other revenues
550.7
599.0
1,539.4
1,834.9
Net investment income
853.3
1,079.7
2,541.9
3,030.9
Net realized capital gains (losses), excluding
impairment losses on available-for-sale
securities
50.6
(20.9)
62.5
(145.0)
Total other-than-temporary impairment losses
on available-for-sale securities
(162.5)
(209.7)
(510.0)
(323.1)
Portion of impairment losses on fixed
maturities, available-for-sale recognized
in other comprehensive income
45.3
-
162.4
-
Net impairment losses on available-for-sale
securities
(117.2)
(209.7)
(347.6)
(323.1)
Net realized capital losses
(66.6)
(230.6)
(285.1)
(468.1)
Total revenues
2,270.3
2,497.8
6,616.7
7,656.6
Benefits, claims and settlement expenses
1,317.1
1,597.2
3,958.0
4,703.2
Dividends to policyholders
61.9
70.4
188.3
210.2
Operating expenses
643.0
723.7
1,894.1
2,217.0
Total expenses
2,022.0
2,391.3
6,040.4
7,130.4
Income before income taxes
248.3
106.5
576.3
526.2
Income taxes (benefits)
44.1
(2.2)
85.5
56.8
Net income
204.2
108.7
490.8
469.4
Net income attributable to noncontrolling
interest
11.3
10.4
18.3
12.1
Net income attributable to PFG
192.9
98.3
472.5
457.3
Preferred stock dividends
8.2
8.2
24.7
24.7
Net income available to common stockholders
$        184.7
$         90.1
$        447.8
$        432.6
Less:
Net realized capital losses, as adjusted
(53.5)
(156.3)
(154.6)
(316.4)
Other after-tax adjustments
(0.5)
(4.8)
(0.8)
(14.7)
Operating earnings
$        238.7
$       251.2
$         603.2
$         763.7
Selected Balance Sheet Statistics
Period Ended,
9/30/09
12/31/08
9/30/08
Total assets (in billions)
$ 137.4
$ 128.2
$ 143.4
Total common equity (in millions)
$ 6,966.7
$ 1,930.8
$ 5,070.6
Total common equity excluding accumulated
other comprehensive income (in millions)
$ 8,400.8
$ 6,842.4
$ 6,957.9
End of period common shares outstanding (in
millions)
318.9
259.3
259.2
Book value per common share
$ 21.85
$ 7.45
$ 19.56
Book value per common share excluding
accumulated other comprehensive income
$ 26.34
$ 26.39
$ 26.84
Page 11
Principal Financial Group, Inc.
Reconciliation of Non-GAAP Financial Measures to U.S. GAAP
(in millions, except as indicated)
Three Months Ended,
Nine Months Ended,
09/30/09
09/30/08
09/30/09
09/30/08
Diluted Earnings Per Common Share:
Operating Earnings
0.74
0.96
2.07
2.92
Net realized capital losses
(0.17)
(0.60)
(0.53)
(1.21)
Other after-tax adjustments
-
(0.01)
-
(0.05)
Net income available to common stockholders
0.57
0.35
1.54
1.66
Book Value Per Common Share Excluding Accumulated Other
Comprehensive Income:
Book value per common share excluding accumulated other
comprehensive income
26.34
26.84
26.34
26.84
Net unrealized capital losses
(2.67)
(7.58)
(2.67)
(7.58)
Foreign currency translation
(0.18)
0.07
(0.18)
0.07
Net unrecognized post-retirement benefit obligations
(1.64)
0.23
(1.64)
0.23
Book value per common share including accumulated other
comprehensive income
21.85
19.56
21.85
19.56
Operating Revenues:
USAA
1,025.6
1,237.5
3,024.4
3,697.9
GAM
111.3
141.7
319.0
425.0
IAMA
156.1
265.5
381.8
700.4
Life and Health
1,104.2
1,158.9
3,352.1
3,527.1
Corporate and Other
(40.1)
(52.4)
(123.2)
(152.3)
Total operating revenues
2,357.1
2,751.2
6,954.1
8,198.1
Net realized capital losses and related adjustments
(86.2)
(248.3)
(336.7)
(517.5)
Terminated commercial mortgage securities issuance operation
(0.6)
(5.1)
(0.7)
(24.0)
Total GAAP revenues
2,270.3
2,497.8
6,616.7
7,656.6
Operating Earnings:
USAA
154.6
136.5
385.1
428.5
GAM
10.5
23.5
25.5
67.4
IAMA
33.1
44.4
79.4
107.9
Life and Health
68.2
73.9
197.7
219.8
Corporate and Other
(27.7)
(27.1)
(84.5)
(59.9)
Total operating earnings
238.7
251.2
603.2
763.7
Net realized capital losses
(53.5)
(156.3)
(154.6)
(316.4)
Other after-tax adjustments
(0.5)
(4.8)
(0.8)
(14.7)
Net income available to common stockholders
184.7
90.1
447.8
432.6
Net Realized Capital Gains (losses):
Net realized capital gains losses, as adjusted
(53.5)
(156.3)
(154.6)
(316.4)
Periodic settlements and accruals on non-hedge derivatives
20.3
17.6
48.0
45.8
Amortization of DPAC and sale inducement costs
(16.7)
(16.2)
(106.3)
(46.1)
Certain market value adjustments of embedded derivatives
(2.3)
3.3
(8.8)
6.5
Capital gains (losses) distributed
7.5
(11.8)
14.4
(14.2)
Tax impacts
(31.1)
(75.4)
(96.9)
(151.7)
Noncontrolling interest capital gains
9.9
8.1
15.5
4.4
Recognition of front-end fee revenues
(0.7)
-
2.1
-
Certain market value adjustments to fee revenues
-
0.1
1.5
3.6
GAAP net realized capital losses
(66.6)
(230.6)
(285.1)
(468.1)
Other After Tax Adjustments:
Change in estimated loss related to a prior year legal contingency
-
-
-
7.6
Terminated commercial mortgage securities issuance operation
(0.5)
(4.8)
(0.8)
(22.3)
Total other after-tax adjustments
(0.5)
(4.8)
(0.8)
(14.7)