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 27, 2006
(Date of earliest event reported)
PRINCIPAL FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-16725 42-1520346
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification Number)
711 High Street, Des Moines, Iowa 50392
(Address of principal executive offices)
(515) 247-5111
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
__________________
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
(b) At a meeting of the Board of Directors of Principal Financial Group, Inc.
(the "Company") held on November 28, 2006, David J. Drury, a director of
the Company and its wholly-owned subsidiary, Principal Life Insurance
Company, whose terms of office will expire at the time of the Company's
2007 annual meeting of shareholders, indicated his decision to not seek
re-election at the 2007 annual meeting and to retire from the Board at the
time of that meeting. Mr. Drury's decision to not seek re-election is not
due to a disagreement with the Company on any matter relating to the
Company's operations, policies or practices. Mr. Drury was not asked to
resign or removed for cause from the Board of Directors.
(e) On November 27, 2006, the Human Resources Committee of the Board of
Directors of the Company and Principal Life Insurance Company approved the
adoption of an amendment to the Supplemental Executive Retirement Plan, or
"SERP," a nonqualified supplemental pension plan. The amendment added a
single sum cash distribution option for the traditional benefit formula.
Prior to the amendment, actuarially equivalent annuity options were the
only distribution options under the SERP for the traditional benefit
formula. The addition of the single sum cash distribution option to the
SERP is not anticipated to have a material cost impact to the Company.
ITEM 7.01 REGULATION FD DISCLOSURE
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.
On December 1, 2006, Principal Financial Group, Inc. announced its outlook for
2007 net income and operating earnings. The text of the announcement is included
herewith as Exhibit 99.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99 Press Release Concerning 2007 Outlook Dated December 1, 2006
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/ Joyce N. Hoffman
Name: Joyce N. Hoffman
Title: Senior Vice President and
Corporate Secretary
Date: December 1, 2006
EXHIBIT 99
RELEASE: On receipt
MEDIA CONTACT: Jeff Rader, 515-247-7883, rader.jeff@principal.com
INVESTOR RELATIONS CONTACT: Tom Graf, 515-235-9500,
investor-relations@principal.com
PRINCIPAL FINANCIAL GROUP, INC. ANNOUNCES OUTLOOK FOR 2007
COMPANY ALSO PROVIDES LONGER-TERM EXPECTATIONS FOR ROE AND EPS
Des Moines, IA (December 1, 2006) - Principal Financial Group, Inc. (NYSE:
PFG) today announced its outlook for 2007(1). The company expects 2007 net
income available to common stockholders to range from $3.60 to $3.75 per diluted
share (2). The company expects 2007 operating earnings per diluted share (EPS)
to range from $3.80 to $3.95(3).
Guidance for 2007 incorporates certain assumptions, including: domestic
equity market performance improvement of roughly two percent per quarter; and
operating losses for the Corporate and Other segment of $50 to $60 million.
Company guidance incorporates completion, in 2007, of the $250 million
repurchase program authorized by the board, announced by the company on November
28, 2006. Company guidance does not contemplate any acquisition or divestiture
activity other than where a definitive agreement has been signed by the company
and publicly announced.
The company also announced today its longer-term expectations(4) for return
on equity (ROE)(5) and earnings per share. The company continues to expect an
average annual improvement in total company ROE of roughly 50 basis points. The
company also continues to expect 11 to 13 percent average annual growth in EPS.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
This press release contains forward-looking statements, including, without
limitation, statements as to sales targets, sales and earnings trends, and
management's beliefs, expectations, goals and opinions. The company does not
undertake to update these statements, which are based on a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate. Future
events and their effects on the company may not be those anticipated, and actual
results may differ materially from the results anticipated in these
forward-looking statements. The risks, uncertainties and factors that could
cause or contribute to such material differences are discussed in the company's
annual report on Form 10-K for the year ended December 31, 2005, and in the
company's quarterly report on Form 10-Q for the quarter ended September 30,
2006, filed by the company with the Securities and Exchange Commission. These
risks and uncertainties include, without limitation: competitive factors;
volatility of financial markets; decrease in ratings; interest rate changes;
inability to attract and retain sales representatives; international business
risks; foreign currency exchange rate fluctuations; and investment portfolio
risks.
ABOUT THE PRINCIPAL FINANCIAL GROUP
The Principal Financial Group(R) (The Principal(R))(6) 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 and national network of financial professionals. A member of the
Fortune 500, the Principal Financial Group has $215.0 billion in assets under
management(7) and serves some 16.4 million customers worldwide from offices in
Asia, Australia, Europe, Latin America and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the ticker
symbol PFG. For more information, visit www.principal.com.
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(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) The range of $3.60 to $3.75 reflects the company's estimate for 2007
mortgage and credit losses only. There are a number of items the company
does not predict that could significantly affect net income available to
common stockholders and net income available to common stockholders 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.
(3) Operating earnings per diluted share (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 per diluted share determined in accordance with U.S. GAAP. EPS
is calculated by dividing operating earnings by weighted average shares
outstanding. Operating earnings excludes from net income available to
common stockholders the effect of net realized/unrealized 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.
(4) Actual quarterly and annual results may fall outside the average annual
ranges. Longer-term growth expectations should be applied to normalized
results.
(5) Operating return on average equity excluding accumulated other
comprehensive income, calculated over the trailing twelve month period.
(6) "The Principal Financial Group" and "The Principal" are registered service
marks of Principal Financial Services, Inc., a member of the Principal
Financial Group.
(7) As of September 30, 2006.