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| 711 High Street, Des Moines, Iowa 50392 |
| (Address of principal executive offices) |
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| (515) 247-5111 |
| (Registrant’s telephone number, including area code) |
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| 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: |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR |
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240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR |
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240.13e-4(c)) |
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| Item 7.01 Regulation FD Disclosure |
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| The following information is being furnished under Item 7.01 "Regulation FD Disclosure." This |
| information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act |
| of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor |
| shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as |
| amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a |
| filing. |
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| On December 3, 2009, Principal Financial Group, Inc. announced its outlook for 2010 operating |
| earnings and net income. The text of the announcement is included herewith as Exhibit 99.1. |
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| Item 9.01 Financial Statements and Exhibits |
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| Exhibit 99.1 Press Release Concerning 2010 Outlook Dated December 3, 2009 |
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| Exhibit 99.2 Additional slides concerning 2010 guidance presented at Principal Financial Group, |
| Inc.'s Investor Conference on December 3, 2009 |
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| Des Moines, IA (December 3, 2009) – Principal Financial Group, Inc. (NYSE:PFG) today announced |
| its outlook for 2010: operating earnings per diluted share (EPS) ranging from $2.45 to $2.75; and net |
| income available to common stockholders per diluted share ranging from $1.75 to $2.05.1,2,3,4 |
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| Guidance for 2010 incorporates certain assumptions, including: a 13 to 15 percent increase in average |
| assets under management in 2010 compared to 2009 based on an average S&P 500 Index of 1,150 in |
| 2010; operating losses for the Corporate segment of $90 million to $110 million; and no share |
| repurchase activity. Company guidance contemplates additional scaling back of the Investment Only |
| business during 2010, from its present level of approximately 25 percent of general account liabilities |
| to approximately 20 percent by year-end 2010. Guidance also contemplates a change in operating |
| earnings for Principal International due to a pending change in the company’s economic interest in its |
| BrasilPrev joint venture.5 Guidance does not contemplate any other activity, other than where a |
| definitive agreement has been signed by the company and publicly announced. |
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| The company also announced that it remains committed to its long-term goals: average annual |
| improvement in return on equity (ROE)6 of roughly 50 basis points; and 11 to 13 percent average |
| annual growth in EPS, reflecting the company’s outlook for continued strength in the U.S. and |
| international asset management and accumulation businesses.7 |
| _________________________ |
| 1 Guidance speaks only as of the date it is made. The company does not undertake to update annual guidance during the year, but |
| may do so if significant changes occur in general business conditions or company operations. |
| 2 EPS, which is not measured in accordance with U.S. generally accepted accounting principles (U.S. GAAP), should not be viewed |
| as a substitute for net income available to common stockholders (net income) per diluted share determined in accordance with U.S. |
| GAAP. EPS is calculated by dividing operating earnings by weighted average shares outstanding. Operating earnings are |
| determined by adjusting net income for the effect of net realized capital gains and losses, as adjusted, and other after-tax |
| adjustments. After-tax adjustments have occurred in the past and could recur in future reporting periods. While these items may be |
| significant components in understanding and assessing the company's consolidated financial performance, management believes the |
| presentation of operating earnings per diluted share enhances the understanding of results of operations by highlighting earnings |
| attributable to the normal, ongoing operations of the company's businesses. |
| 3 The range of $1.75 to $2.05 reflects the company's estimate for 2010 mortgage and credit losses only. There are a number of items |
| the company does not predict that could significantly affect net income per diluted share, including, but not limited to: mark-to- |
| market on derivatives; changes to laws, regulations, or accounting standards; and gains or losses from discontinued operations. |
| 4 The company’s estimate of mortgage and credit losses for 2010 ranges from 65 cents to 75 cents per diluted share. The company’s |
| outlook for net income per diluted share is based on the mid-point of that range. |
| 5 As announced on October 27, 2009, the company has signed a Memorandum of Understanding with Banco do Brasil. Following |
| completion of all necessary approvals and transactions, the pension and long-term asset accumulation joint venture in Brazil would |
| be extended for 23 years and The Principal’s economic interest in the joint venture would change to 25 percent, from 46 percent. |
| 6 Operating return on average equity excluding accumulated other comprehensive income, calculated over the trailing twelve month |
| period. |
| 7 Long-term EPS and ROE targets assume domestic equity market performance improvement of roughly two percent per quarter. |
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| Principal Financial Group, Inc. Announces Outlook for 2010—page 2 |
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| Forward looking and cautionary statements |
| This press release contains forward-looking statements, including, without limitation, statements as to operating |
| earnings, net income available to common stockholders, net cash flows, realized and unrealized losses, capital and |
| liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The |
| company does not undertake to update or revise these statements, which are based on a number of assumptions |
| concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the |
| company may not be those anticipated, and actual results may differ materially from the results anticipated in these |
| forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material |
| differences are discussed in the company's annual report on Form 10-K for the year ended December 31, 2008, and |
| in company’s quarterly report on Form 10-Q for the quarter ended September 30, 2009, filed by the company with |
| the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. |
| These risks and uncertainties include, without limitation: adverse capital and credit market conditions that may |
| significantly affect the company’s ability to meet liquidity needs, access to capital and cost of capital; a continuation |
| of difficult conditions in the global capital markets and the general economy that may materially adversely affect the |
| company’s business and results of operations; the actions of the U.S. government, Federal Reserve and other |
| governmental and regulatory bodies for purposes of stabilizing the financial markets might not achieve the intended |
| effect; the risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible |
| assets recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the |
| company; investment risks which may diminish the value of the company’s invested assets and the investment |
| returns credited to customers, which could reduce sales, revenues, assets under management and net income; |
| requirements to post collateral or make payments related to declines in market value of specified assets may |
| adversely affect company liquidity and expose the company to counterparty credit risk; changes in laws, regulations |
| or accounting standards that may reduce company profitability; fluctuations in foreign currency exchange rates that |
| could reduce company profitability; Principal Financial Group, Inc.’s primary reliance, as a holding company, on |
| dividends from its subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of |
| subsidiaries to pay such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest |
| rate changes; inability to attract and retain sales representatives; international business risks; a pandemic, terrorist |
| attack or other catastrophic event; and default of the company’s re-insurers. |
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| About the Principal Financial Group |
| The Principal Financial GroupÒ (The Principal ® )8 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 |
| management9 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. |
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