497 1 ipva-sai.htm IPVA 5/1/2010 SAI ipvaall3.htm - Generated by SEC Publisher for SEC Filing
PART B
PRINCIPAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT B 
PRINCIPAL INVESTMENT PLUS VARIABLE ANNUITYSM 
Statement of Additional Information
dated May 1, 2010

This Statement of Additional Information provides information about the Principal Investment Plus Variable Annuity 
(the “Contract”) in addition to the information that is contained in the Contract’s Prospectus dated May 1, 2010. 
 
This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Prospectus, a 
copy of which can be obtained free of charge by writing or telephoning: 

Principal Investment Plus Variable Annuity 
The Principal Financial Group
P.O. Box 9382
Des Moines Iowa 50306-9382
Telephone: 1-800-852-4450


                                                                                                             TABLE OF CONTENTS   
GENERAL INFORMATION AND HISTORY  3 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  3 
PRINCIPAL UNDERWRITER  3 
CALCULATION OF PERFORMANCE DATA  3 
TAXATION UNDER CERTAIN RETIREMENT PLANS  10 
Principal Life Insurance Company Separate Account B   
   Report of Independent Registered Public Accounting Firm   15
   Financial Statements   16
Principal Life Insurance Company   
   Report of Independent Registered Public Accounting Firm   155
   Consolidated Financial Statements   156


GENERAL INFORMATION AND HISTORY 
 
Principal Life Insurance Company (the “Company”) is the issuer of the Principal Investment Plus Variable Annuity (the 
“Contract”) and serves as custodian of its assets. The Company is a stock life insurance company with authority to 
transact life and annuity business in all states of the United States and the District of Columbia. The Company’s home 
office is located at: Principal Financial Group, Des Moines, Iowa 50392. The Company is a wholly owned subsidiary of 
Principal Financial Services, Inc., which in turn, is a wholly owned direct subsidiary of Principal Financial Group, Inc., a 
publicly-traded company. 
 
On June 24,1879, the Company was incorporated under Iowa law as a mutual assessment life insurance company 
named Bankers Life Association. The Company became a legal reserve life insurance company and changed its 
name to Bankers Life Company in 1911. In 1986, the Company changed its name to Principal Mutual Life Insurance 
Company. In 1998, the Company became Principal Life Insurance Company, a subsidiary stock life insurance 
company of Principal Mutual Holding Company, as part of a reorganization into a mutual insurance holding company 
structure. In 2001, Principal Mutual Holding Company converted to a stock company through a process called 
demutualization, resulting in the current organizational structure. 
 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 
Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa 50309, serves as the independent registered 
public accounting firm for Principal Life Insurance Company Separate Account B and the Principal Life Insurance 
Company. 
 
PRINCIPAL UNDERWRITER 
 
The principal underwriter of the Contract is Princor Financial Services Corporation (“Princor”) which is a wholly owned 
subsidiary of Principal Financial Services, Inc. and an affiliate of the Company. The address of Princor is the Principal 
Financial Group, 680 8th Street, Des Moines, Iowa 50392-0200. Princor was incorporated in Iowa in 1968 and is a 
securities broker-dealer registered with the Securities Exchange Commission as well as a member of the FINRA. The 
Contracts may also be sold through other broker-dealers authorized by Princor and applicable law to do so. 
Registered representatives of such broker-dealers may be paid on a different basis than described below. 
 
The Contract’s offering to the public is continuous. As the principal underwriter, Princor is paid for the distribution of 
the Contract. For the last three fiscal years Princor has received and retained the following commissions: 

2009  2008  2007 
received/retained  received/retained  received/retained 
$16,651,091/$0  $20,823,068/$0  $24,201,897/$0 

CALCULATION OF PERFORMANCE DATA 
 
The Separate Account may publish advertisements containing information (including graphs, charts, tables and 
examples) about the performance of one or more of its divisions. Separate performance figures will be shown for the 
Contract without the premium payment credit rider and for the Contract with the premium payment credit rider. 
 
The Contract was not offered prior to March 1, 2005. However, the certain divisions invest in underlying mutual funds 
which were offered prior to the date the Contract was available. Thus, the Separate Account may publish 
advertisements containing information about the hypothetical performance of one or more of its divisions for this 
Contract as the Contract was issued on or after the date the underlying mutual fund was first offered. The hypothetical 
performance from the date of inception of the underlying mutual fund in which the division invests is derived by 
reducing the actual performance of the underlying mutual fund by the highest level of fees and charges of the Contract 
as if it had been in existence. 


In addition, as certain of the underlying mutual funds have added classes since the inception of the fund, performance 
may be shown for periods prior to the inception date of the new class which represents the historical results of initial 
class shares adjusted to reflect the fees and expenses of the new class. 
 
The yield and total return figures described below will vary depending upon market conditions, the composition of the 
underlying mutual fund’s portfolios and operating expenses. These factors and possible differences in the methods 
used in calculating yield and total return should be considered when comparing the Separate Account performance 
figures to performance figures published for other investment vehicles. 
 
The Separate Account may also quote rankings, yields or returns as published by independent statistical services or 
publishers and information regarding performance of certain market indices. Any performance data quoted for the 
Separate Account represents only historical performance and is not intended to indicate future performance. 
 
From time to time the Separate Account advertises its Money Market Division’s “yield” and “effective yield” for the 
Contract. Both yield figures are based on historical earnings and are not intended to indicate future performance. The 
“yield” of the division refers to the income generated by an investment under the Contract in the division over a 7-day 
period (which period will be stated in the advertisement). This income is then “annualized.” That is, the amount of 
income generated by the investment during that week is assumed to be generated each week over a 52-week period 
and is shown as a percentage of the investment. The “effective yield” is calculated similarly but, when annualized, the 
income earned by an investment in the division is assumed to be reinvested. The “effective yield” will be slightly higher 
than the “yield” because of the compounding effect of this assumed reinvestment. Neither yield quotation reflects a 
sales load deducted from purchase payments which, if included, would reduce the “yield” and “effective yield.” 

  Yield For the Period Ended December 31, 2009 
                                                                   For Contracts:  7-Day Annualized Yield  7-Day Effective Yield 
without a surrender charge or a Purchase Payment Credit Rider  -1.29%  -1.29% 
with a surrender charge but without a Purchase Payment Credit Rider  -7.29%  -7.29% 
without a surrender charge but with a Purchase Payment Credit Rider  -1.89%  -1.89% 

Also, from time to time, the Separate Account will advertise the average annual total return of its various divisions. The 
average annual total return for any of the divisions is computed by calculating the average annual compounded rate of 
return over the stated period that would equate an initial $1,000 investment to the ending redeemable Contract value. 
In this calculation for the Contract without the Premium Payment Credit Rider, the ending value is reduced by a 
surrender charge that decreases from 6% to 0% over a period of 7 years. For the calculations relating to the Contract 
with the Premium Payment Credit Rider, the ending value is reduced by a surrender charge that decreases from 8% to 
0% over a period of 9 years. The Separate Account may also advertise total return figures for its divisions for a 
specified period that does not take into account the surrender charge in order to illustrate the change in the division’s 
unit value over time. See “Charges and Deductions” in the Prospectus for a discussion of surrender charges. 


Following are the hypothetical average annual total returns for the period ending December 31, 2009 assuming the 
Contract had been offered as of the effective dates of the underlying mutual funds in which the divisions invest: 

                   For Contracts without the Premium Payment   
                         Credit Rider and with Surrender Charge   
  Effective   One Year  Five Years  Ten Years Since 
Division Date Inception
AIM V.I. Basic Value  September 10, 2001  40.12  -4.78    -1.10 
AIM V.I. International Growth  May 5, 1993  27.52  5.09  -0.75  6.14 
AIM V.I. SmallCap Equity  August 29, 2003  13.74  0.26    3.94 
AllianceBernstein Small Cap Growth  August 15, 1996  33.95%  -1.41%  -1.55%  1.09% 
American Century VP Inflation Protection  December 31, 2002  2.84  2.26    3.17 
American Century VP Ultra  May 1, 2001  26.81  -3.30    -1.93 
American Century VP Vista  October 5, 2001  14.91  -1.20    2.71 
Asset Allocation  June 1, 1994  11.29  1.67  1.58  5.50 
Bond & Mortgage Securities  December 18, 1987  13.37  0.25  3.19  5.27 
Diversified International  May 2, 1994  21.23  3.10  0.39  4.78 
Dreyfus Technology Growth  August 31, 1999  49.08  0.70  -7.94  -3.65 
Equity Income  April 28, 1998  12.47  -0.36  4.98  4.53 
Fidelity VIP Contrafund®  January 3, 1995  27.74  1.54  1.21  8.93 
Fidelity VIP Equity-Income  November 3, 1986  22.23  -2.91  0.32  6.85 
Fidelity VIP Growth  October 31, 1986  20.33  -2.75  -5.27  6.88 
Fidelity VIP Mid Cap  December 28, 1998  31.97  3.38  8.51  11.86 
Fidelity VIP Overseas  January 28, 1987  18.61  1.09  -1.85  4.40 
Franklin SmallCap Value Securities Fund  April 30, 1998  21.52  -0.46  7.13  3.74 
Goldman Sachs Mid Cap Value  May 1, 1998  25.46  0.65  8.46  5.57 
Goldman Sachs Structured Small Cap Equity  February 13, 1998  20.05  -5.47  1.21  1.34 
Government & High Quality Bond  April 9, 1987  -2.06  1.03  3.38  5.19 
International Emerging Markets  October 24, 2000  61.46  13.28    12.38 
International SmallCap  May 1, 1998  27.14  2.40  2.30  6.74 
LargeCap Blend II  May 1, 2002  22.02  -0.91    1.23 
LargeCap Growth  May 2, 1994  19.39  -0.06  -4.55  2.92 
LargeCap Growth I  June 1, 1994  44.77  0.47  -3.04  6.91 
LargeCap S&P 500 Index  May 3, 1999  18.70  -1.75  -2.59  -1.72 
LargeCap Value  May 13, 1970  8.81  -2.65  -0.34  8.81 
LargeCap Value III  May 1, 2002  12.27  -4.60    -0.22 
MFS VIT Utilities  January 3, 1995  25.18  8.14  4.46  10.88 
MFS VIT Value  January 2, 2002  14.89  0.70    2.98 
MidCap Blend  December 18, 1987  26.06  1.94  5.24  10.50 
MidCap Growth I  May 1, 1998  27.43  0.00  0.01  0.40 
MidCap Value II  May 3, 1999  26.42  -3.34  4.65  5.23 
Money Market  March 18, 1983  -7.06  1.09  1.44  3.54 
Mortgage Securities  May 6, 1993  -0.89  3.00  4.27  4.09 
Neuberger Berman AMT Partners  March 22, 1994  48.09  -0.43  1.18  6.39 
Neuberger Berman AMT Small Cap Growth  July 12, 2002  15.19  -6.16    0.24 
Neuberger Berman AMT Socially Responsive  February 18, 1999  23.75  -1.12  1.16  2.31 
PIMCO All Asset  April 30, 2003  14.02  2.38    5.13 
PIMCO Total Return  December 31, 1997  6.61  4.84  5.71  4.89 
PIMCO VIT High Yield Portfolio  April 30, 1998  32.48  2.87  4.08  3.71 
Principal Capital Appreciation  April 28, 1998  22.16  0.83  3.65  6.79 
Principal LifeTime 2010  August 30, 2004  17.48  -0.66    1.19 
Principal LifeTime 2020  August 30, 2004  19.87  -0.31    1.76 
Principal LifeTime 2030  August 30, 2004  20.58  -0.76    1.33 
Principal LifeTime 2040  August 30, 2004  21.90  -0.86    1.44 
Principal LifeTime 2050  August 30, 2004  22.38  -0.94    1.36 


Principal LifeTime Strategic Income  August 30, 2004  11.43  -0.55    1.01 
Real Estate Securities  May 1, 1998  21.28  0.53  11.01  8.09 
SAM Balanced  June 3, 1997  16.25  1.21  2.39  5.33 
SAM Conservative Balanced  April 23, 1998  13.60  1.79  3.41  3.25 
SAM Conservative Growth  June 3, 1997  18.10  0.08  1.00  5.14 
SAM Flexible Income  September 9, 1997  12.42  2.04  3.81  4.65 
SAM Strategic Growth  June 3, 1997  19.83  -0.65  0.03  5.43 
Short-Term Bond  May 1, 2003  2.81  -0.61    -0.03 
Short-Term Income  January 12, 1994  2.53  2.09  3.61  3.33 
SmallCap Growth II  May 1, 1998  24.06  -3.05  -8.26  -1.50 
SmallCap Value I  May 1, 1998  8.72  -3.97  5.84  5.06 
T. Rowe Price Blue Chip Growth  December 29, 2000  33.99  -0.81    -1.74 
T. Rowe Price Health Sciences  December 29, 2000  23.68  4.22    2.27 
Van Eck Worldwide Hard Assets  May 1, 2006  48.81      3.36 
 
 
                   For Contracts without the Premium Payment   
                     Credit Rider and without Surrender Charge   
  Effective   One Year  Five Years  Ten Years Since 
 Division Date Inception
AIM V.I. Basic Value  September 10, 2001  46.12  -4.06    -1.10 
AIM V.I. International Growth  May 5, 1993  33.52  5.57  -0.75  6.14 
AIM V.I. SmallCap Equity Fund  August 29, 2003  19.74  0.84    3.94 
AllianceBernstein Small Cap Growth  August 15, 1996  39.95%  -0.79%  -1.55%  1.09% 
American Century VP Inflation Protection  December 31, 2002  8.84  2.81    3.17 
American Century VP Ultra  May 1, 2001  32.81  -2.62    -1.93 
American Century VP Vista  October 5, 2001  20.91  -0.57    2.71 
Asset Allocation  June 1, 1994  17.29  2.22  1.58  5.50 
Bond & Mortgage Securities  December 18, 1987  19.37  0.83  3.19  5.27 
Diversified International  May 2, 1994  27.23  3.63  0.39  4.78 
Dreyfus Technology Growth  August 31, 1999  55.08  1.28  -7.94  -3.65 
Equity Income  April 28, 1998  18.47  0.25  4.98  4.53 
Fidelity VIP Contrafund  January 3, 1995  33.74  2.10  1.21  8.93 
Fidelity VIP Equity-Income  November 3, 1986  28.23  -2.25  0.32  6.85 
Fidelity VIP Growth  October 31, 1986  26.33  -2.09  -5.27  6.88 
Fidelity VIP MidCap  December 28, 1998  37.97  3.90  8.51  11.86 
Fidelity VIP Overseas  January 28, 1987  24.61  1.66  -1.85  4.40 
Franklin SmallCap Value Securities Fund  April 30, 1998  27.52  0.14  7.13  3.74 
Goldman Sachs Mid Cap Value  May 1, 1998  31.46  1.22  8.46  5.57 
Goldman Sachs Structured Small Cap Equity  February 13, 1998  26.05  -4.73  1.21  1.34 
Government & High Quality Bond  April 9, 1987  3.94  1.60  3.38  5.19 
International Emerging Markets  October 24, 2000  67.46  13.65    12.38 
International SmallCap  May 1, 1998  33.14  2.94  2.30  6.74 
LargeCap Blend II  May 1, 2002  28.02  -0.29    1.23 
LargeCap Growth  May 2, 1994  25.39  0.54  -4.55  2.92 
LargeCap Growth I  June 1, 1994  50.77  1.05  -3.04  6.91 
LargeCap S&P 500 Index  May 3, 1999  24.70  -1.12  -2.59  -1.72 
LargeCap Value  May 13, 1970  14.81  -1.99  -0.34  8.81 
LargeCap Value III  May 1, 2002  18.27  -3.88    -0.22 
MFS VIT Utilities  January 3, 1995  31.18  8.57  4.46  10.88 
MFS VIT Value  January 2, 2002  20.89  1.28    2.98 
MidCap Blend  December 18, 1987  32.06  2.49  5.24  10.50 
MidCap Growth I  May 1, 1998  33.43  0.59  0.01  0.40 
MidCap Value II  May 3, 1999  32.42  -2.67  4.65  5.23 
Money Market  March 18, 1983  -1.06  1.66  1.44  3.54 


Mortgage Securities  May 6, 1993  5.11  3.53  4.27  4.09 
Neuberger Berman AMT Partners  March 22, 1994  54.09  0.18  1.18  6.39 
Neuberger Berman AMT Small Cap Growth  July 12, 2002  21.19  -5.40    0.24 
Neuberger Berman AMT Socially Responsive  February 18, 1999  29.75  -0.50  1.16  2.31 
PIMCO All Asset  April 30, 2003  20.02  2.92    5.13 
PIMCO Total Return  December 31, 1997  12.61  5.33  5.71  4.89 
PIMCO VIT High Yield Portfolio  April 30, 1998  38.48  3.40  4.08  3.71 
Principal Capital Appreciation  April 28, 1998  28.16  1.40  3.65  6.79 
Principal LifeTime 2010  August 30, 2004  23.48  -0.05    1.55 
Principal LifeTime 2020  August 30, 2004  25.87  0.29    2.10 
Principal LifeTime 2030  August 30, 2004  26.58  -0.15    1.68 
Principal LifeTime 2040  August 30, 2004  27.90  -0.24    1.79 
Principal LifeTime 2050  August 30, 2004  28.38  -0.32    1.71 
Principal LifeTime Strategic Income  August 30, 2004  17.43  0.06    1.36 
Real Estate Securities  May 1, 1998  27.28  1.11  11.01  8.09 
SAM Balanced  June 3, 1997  22.25  1.77  2.39  5.33 
SAM Conservative Balanced  April 23, 1998  19.60  2.34  3.41  3.25 
SAM Conservative Growth  June 3, 1997  24.10  0.67  1.00  5.14 
SAM Flexible Income  September 9, 1997  18.42  2.59  3.81  4.65 
SAM Strategic Growth  June 3, 1997  25.83  -0.04  0.03  5.43 
Short-Term Bond  May 1, 2003  8.81  -0.01    -0.03 
Short-Term Income  January 12, 1994  8.53  2.64  3.61  3.33 
SmallCap Growth II  May 1, 1998  30.06  -2.38  -8.26  -1.50 
SmallCap Value I  May 1, 1998  14.72  -3.28  5.84  5.06 
T. Rowe Price Blue Chip Growth  December 29, 2000  39.99  -0.20    -1.74 
T.Rowe Price Health Sciences  December 29, 2000  29.68  4.72    2.27 
Van Eck Worldwide Hard Assets  May 1, 2006  54.81      4.35 
 
                       For Contracts with the Premium Payment   
                         Credit Rider and with Surrender Charge   
  Effective   One Year  Five Years  Ten Years Since 
Division Date Inception
AIM V.I. Basic Value  September 10, 2001  37.25  -5.62    -1.70 
AIM V.I. International Growth  May 5, 1993  24.72  4.27  -1.35  5.50 
AIM V.I. SmallCap Equity  August 29, 2003  11.02  -0.57    3.05 
AllianceBernstein Small Cap Growth  August 15, 1996  31.11%  -2.24%  -2.14%  0.48% 
American Century VP Inflation Protection  December 31, 2002  0.19  1.45    2.30 
American Century VP Ultra  May 1, 2001  24.01  -4.13    -2.52 
American Century VP Vista  October 5, 2001  12.18  -2.02    2.10 
Asset Allocation  June 1, 1994  8.59  0.85  0.97  4.87 
Bond & Mortgage Securities  December 18, 1987  10.66  -0.58  2.57  4.64 
Diversified International  May 2, 1994  18.47  2.29  -0.21  4.15 
Dreyfus Technology Growth  August 31, 1999  46.15  -0.12  -8.50  -4.23 
Equity Income  April 28, 1998  9.76  -1.18  4.35  3.90 
Fidelity VIP Contrafund®  January 3, 1995  24.94  0.72  0.60  8.27 
Fidelity VIP Equity-Income  November 3, 1986  19.46  -3.75  -0.28  6.21 
Fidelity VIP Growth  October 31, 1986  17.58  -3.58  -5.84  6.24 
Fidelity VIP Mid Cap  December 28, 1998  29.15  2.56  7.86  11.19 
Fidelity VIP Overseas  January 28, 1987  15.86  0.27  -2.45  3.77 
Franklin SmallCap Value Securities Fund  April 30, 1998  18.74  -1.29  6.49  3.12 
Goldman Sachs Mid Cap Value  May 1, 1998  22.67  -0.18  7.81  4.94 
Goldman Sachs Structured Small Cap Equity  February 13, 1998  17.29  -6.32  0.60  0.73 
Government & High Quality Bond  April 9, 1987  -4.68  0.21  2.76  4.56 
International Emerging Markets  October 24, 2000  58.45  12.47    11.70 
International SmallCap  May 1, 1998  24.34  1.58  1.68  6.10 


LargeCap Blend II  May 1, 2002  19.26  -1.73    0.49 
LargeCap Growth  May 2, 1994  16.64  -0.88  -5.12  2.30 
LargeCap Growth I  June 1, 1994  41.87  -0.35  -3.62  6.27 
LargeCap S&P 500 Index  May 3, 1999  15.96  -2.58  -3.18  -2.31 
LargeCap Value  May 13, 1970  6.12  -3.48  -0.94  8.16 
LargeCap Value III  May 1, 2002  9.56  -5.44    -0.96 
MFS VIT Utilities  January 3, 1995  22.39  7.33  3.83  10.22 
MFS VIT Value  January 2, 2002  12.17  -0.12    2.25 
MidCap Blend  December 18, 1987  23.27  1.13  4.61  9.83 
MidCap Growth I  May 1, 1998  24.63  -0.82  -0.59  -0.21 
MidCap Value II  May 3, 1999  23.63  -4.18  4.02  4.60 
Money Market  March 18, 1983  -9.66  0.27  0.83  2.92 
Mortgage Securities  May 6, 1993  -3.52  2.19  3.65  3.46 
Neuberger Berman AMT Partners  March 22, 1994  45.17  -1.25  0.58  5.75 
Neuberger Berman AMT Small Cap Growth  July 12, 2002  12.46  -7.01    -0.49 
Neuberger Berman AMT Socially Responsive  February 18, 1999  20.97  -1.95  0.55  1.69 
PIMCO All Asset  April 30, 2003  11.30  1.57    4.26 
PIMCO Total Return  December 31, 1997  3.94  4.03  5.08  4.55 
PIMCO VIT High Yield Portfolio  April 30, 1998  29.65  2.05  3.46  3.09 
Principal Capital Appreciation  April 28, 1998  19.39  0.01  3.02  6.15 
Principal LifeTime 2010  August 30, 2004  14.74  -1.49    0.39 
Principal LifeTime 2020  August 30, 2004  17.11  -1.14    0.96 
Principal LifeTime 2030  August 30, 2004  17.83  -1.59    0.52 
Principal LifeTime 2040  August 30, 2004  19.13  -1.68    0.64 
Principal LifeTime 2050  August 30, 2004  19.62  -1.77    0.56 
Principal LifeTime Strategic Income  August 30, 2004  8.73  -1.38    0.20 
Real Estate Securities  May 1, 1998  18.51  -0.29  10.34  7.44 
SAM Balanced Portfolio  June 3, 1997  13.52  0.39  1.77  4.70 
SAM Conservative Balanced Portfolio  April 23, 1998  10.89  0.97  2.79  2.63 
SAM Conservative Growth Portfolio  June 3, 1997  15.35  -0.74  0.40  4.51 
SAM Flexible Income Portfolio  September 9, 1997  9.71  1.22  3.19  4.02 
SAM Strategic Growth  June 3, 1997  17.08  -1.47  -0.56  4.80 
Short-Term Bond  May 1, 2003  0.16  -1.44    -0.94 
Short-Term Income  January 12, 1994  -0.12  1.28  2.99  2.71 
SmallCap Growth II  May 1, 1998  21.28  -3.88  -8.82  -2.09 
SmallCap Value I  May 1, 1998  6.03  -4.81  5.21  4.43 
T. Rowe Price Blue Chip Growth  December 29, 2000  31.15  -1.64    -2.33 
T. Rowe Price Health Sciences  December 29, 2000  20.91  3.40    1.66 
Van Eck Worldwide Hard Assets  May 1, 2006  45.89      2.47 
 
                       For Contracts with the Premium Payment   
                     Credit Rider and without Surrender Charge   
  Effective        Since 
Division Date One Year Five Years Ten Years Inception
AIM V.I. Basic Value  September 10, 2001  45.25  -4.63    -1.70 
AIM V.I. International Growth  May 5, 1993  32.72  4.94  -1.35  5.50 
AIM V.I. Small Cap Equity  August 29, 2003  19.02  0.24    3.31 
AllianceBernstein Small Cap Growth  August 15, 1996  39.11%  -1.38%  -2.14%  0.48% 
American Century VP Inflation Protection  December 31, 2002  8.19  2.19    2.55 
American Century VP Ultra  May 1, 2001  32.01  -3.21    -2.52 
American Century VP Vista  October 5, 2001  20.18  -1.17    2.10 
Asset Allocation  June 1, 1994  16.59  1.61  0.97  4.87 
Bond & Mortgage Securities  December 18, 1987  18.66  0.23  2.57  4.64 
Diversified International  May 2, 1994  26.47  3.01  -0.21  4.15 
Dreyfus Technology Growth  August 31, 1999  54.15  0.67  -8.50  -4.23 


Equity Income  April 28, 1998  17.76  -0.36  4.35  3.90 
Fidelity VIP Contrafund  January 3, 1995  32.94  1.49  0.60  8.27 
Fidelity VIP Equity-Income  November 3, 1986  27.46  -2.83  -0.28  6.21 
Fidelity VIP Growth  October 31, 1986  25.58  -2.68  -5.84  6.24 
Fidelity VIP Mid Cap  December 28, 1998  37.15  3.27  7.86  11.19 
Fidelity VIP Overseas  January 28, 1987  23.86  1.05  -2.45  3.77 
Franklin SmallCap Value Securities Fund  April 30, 1998  26.74  -0.46  6.49  3.12 
Goldman Sachs Mid Cap Value  May 1, 1998  30.67  0.62  7.81  4.94 
Goldman Sachs Structured Small Cap Equity  February 13, 1998  25.29  -5.30  0.60  0.73 
Government & High Quality Bond  April 9, 1987  3.32  0.99  2.76  4.56 
International Emerging Markets  October 24, 2000  66.45  12.96    11.70 
International SmallCap  May 1, 1998  32.34  2.32  1.68  6.10 
LargeCap Blend II  May 1, 2002  27.26  -0.89    0.62 
LargeCap Growth  May 2, 1994  24.64  -0.07  -5.12  2.30 
LargeCap Growth I  June 1, 1994  49.87  0.45  -3.62  6.27 
LargeCap S&P 500 Index  May 3, 1999  23.96  -1.71  -3.18  -2.31 
LargeCap Value  May 13, 1970  14.12  -2.58  -0.94  8.16 
LargeCap Value III  May 1, 2002  17.56  -4.46    -0.82 
MFS VIT Utilities  January 3, 1195  30.39  7.92  3.83  10.22 
MFS VIT Value  January 2, 2002  20.17  0.67    2.36 
MidCap Blend  December 18, 1987  31.27  1.88  4.61  9.83 
MidCap Growth I  May 1, 1998  32.63  -0.01  -0.59  -0.21 
MidCap Value II  May 3, 1999  31.63  -3.25  4.02  4.60 
Money Market  March 18, 1983  -1.66  1.05  0.83  2.92 
Mortgage Securities  May 6, 1993  4.48  2.91  3.65  3.46 
Neuberger Berman AMT Partners  March 22, 1994  53.17  -0.42  0.58  5.75 
Neuberger Berman AMT Small Cap Growth  July 12, 2002  20.46  -5.96    -0.36 
Neuberger Berman AMT Socially Responsive  February 18, 1999  28.97  -1.10  0.55  1.69 
PIMCO All Asset  April 30, 2003  19.30  2.31    4.49 
PIMCO Total Return  December 31, 1997  11.94  4.70  5.08  4.55 
PIMCO VIT High Yield Portfolio  April 30, 1998  37.65  2.78  3.46  3.09 
Principal Capital Appreciation  April 28, 1998  27.39  0.79  3.02  6.15 
Principal LifeTime 2010  August 30, 2004  22.74  -0.65    0.94 
Principal LifeTime 2020  August 30, 2004  25.11  -0.31    1.49 
Principal LifeTime 2030  August 30, 2004  25.38  -0.75    1.07 
Principal LifeTime 2040  August 30, 2004  27.13  -0.84    1.18 
Principal LifeTime 2050  August 30, 2004  27.62  -0.92    1.10 
Principal LifeTime Strategic Income  August 30, 2004  16.73  -0.54    0.75 
Real Estate Securities  May 1, 1998  26.51  0.51  10.34  7.44 
SAM Balanced Portfolio  June 3, 1997  21.52  1.16  1.77  4.70 
SAM Conservative Balanced Portfolio  April 23, 1998  18.89  1.73  2.79  2.63 
SAM Conservative Growth Portfolio  June 3, 1997  23.35  0.07  0.40  4.51 
SAM Flexible Income Portfolio  September 9, 1997  17.71  1.98  3.19  4.02 
SAM Strategic Growth Portfolio  June 3, 1997  25.08  -0.63  -0.56  4.80 
Short-Term Bond  May 1, 2003  8.16  -0.60    -0.63 
Short-Term Income  January 12, 1994  7.88  2.02  2.99  2.71 
SmallCap Growth II  May 1, 1998  29.28  -2.96  -8.82  -2.09 
SmallCap Value I  May 1, 1998  14.03  -3.86  5.21  4.43 
T. Rowe Price Blue Chip Growth  December 29, 2000  39.15  -0.80    -2.33 
T. Rowe Price Health Sciences  December 29, 2000  28.91  4.09    1.66 
Van Eck Worldwide Hard Assets  May 1, 2006  53.89      3.72 


TAXATION UNDER CERTAIN RETIREMENT PLANS 
 
INDIVIDUAL RETIREMENT ANNUITIES 
Contributions. Individuals may make contributions for individual retirement annuity (IRA) contracts. Individuals may 
make deductible contributions (for any year) up to the lesser of the amount shown in the chart or 100% of 
compensation. 
 
Individuals age 50 or over are also permitted to make additional “catch-up” contributions. The additional contribution is 
$1,000 in 2009 and 2010. 
 
Such individuals may establish a traditional IRA for a non-working spouse. The annual contribution for both spouses’ 
contracts cannot exceed the lesser of the amount shown in the chart or 100% of the working spouse’s compensation. 
No more than the individual IRA limit may be contributed to either spouse’s IRA for any year. 

  IRA - Maximum Annual Contribution   
Year  Individual IRA  Individual IRA + Spousal IRA 
2009  $5,000  $10,000 
2010  $5,000  $10,000 

Starting in 2011, limits are indexed to inflation. 
 
Contributions may be tax deductible. If an individual and his/her spouse do not participate in a qualified retirement 
plan, the contributions to an IRA are fully tax deductible regardless of income. If an individual is an active participant in 
a qualified retirement plan, his/her ability to deduct the contributions depends upon his/her income level. 
 
For individuals who are not active participants but whose spouses are, deductibility of traditional IRA contributions is 
phased out if the couple files a joint return and the Adjusted Gross Income is between $167,000 and $177,000 in 
2010. 

Deductibility of Traditional IRA Contributions for Active Participants
  Married Individuals (Filing Jointly)    Single Individual   
  Limited  No    Limited  No 
Year  Deduction  Deduction  Year  Deduction  Deduction 
2009  $89,000  $109,000  2009  $55,000  $65,000 
2010  $89,000  $109,000  2010  $56,000  $66,000 

An individual may make non-deductible IRA contributions to the extent of the excess of: 
 
     (1) The lesser of maximum annual contribution or 100% of compensation, over 
 
     (2) The IRA deductible contributions made with respect to the individual. 
 
An individual may not make any contribution to his/her own IRA for the year in which he/she reaches age 70 ½ or for 
any year thereafter. 
 
Taxation of Distributions. Distributions from IRA Contracts are taxed as ordinary income to the recipient, although 
special rules exist for the tax-free return of non-deductible contributions. In addition, taxable distributions received 
under an IRA Contract prior to age 59 ½ are subject to a 10% penalty tax in addition to regular income tax. Certain 
distributions are exempted from this penalty tax, including distributions following the owner’s death or disability if the 
distribution is paid as part of a series of substantially equal periodic payments made for the life (or life expectancy) of 
the Owner or the joint lives (or joint life expectancies) of Owner and the Owner’s designated Beneficiary; distributions 
to pay medical expenses; distributions for certain unemployment expenses; distributions for first home purchases (up 
to $10,000) and distributions for higher education expenses and distributions for certain natural disaster victims. 


Required Distributions. Generally, distributions from IRA Contracts must commence not later than April 1 of the 
calendar year following the calendar year in which the owner attains age 70 ½, and such distributions must be made 
over a period that does not exceed the uniform life distribution period established by the IRS. A penalty tax of 50% 
may be imposed on any amount by which the minimum required distribution in any year exceeded the amount actually 
distributed in that year. In addition, in the event that the owner dies before his or her entire interest in the Contract has 
been distributed, the owner’s entire interest must be distributed in accordance with rules similar to those applicable 
upon the death of the Contract Owner in the case of a non-qualified Contract, as described in the Prospectus. 
 
Tax-Free Rollovers. The Internal Revenue Code (the “Code”) permits the taxable portion of funds to be transferred in 
a tax-free rollover from a qualified retirement plan, tax-deferred annuity plan or governmental 457(b) plan to an IRA 
Contract if certain conditions are met, and if the rollover of assets is completed within 60 days after the distribution 
from the qualified plan is received. A direct rollover of funds may avoid a 20% federal tax withholding generally 
applicable to qualified plans, tax-deferred annuity plan, or governmental 457(b) plan distributions. In addition, not more 
frequently than once every twelve months, amounts may be rolled over tax-free from one IRA to another, subject to 
the 60-day limitation and other requirements. The once-per-year limitation on rollovers does not apply to direct 
transfers of funds between IRA custodians or trustees. 
 
SIMPLIFIED EMPLOYEE PENSION PLANS AND SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION 
PLANS 
Contributions. Under Section 408(k) of the Code, employers may establish a type of IRA plan referred to as a 
simplified employee pension plan (SEP). Employer contributions to a SEP cannot exceed the lesser of 100% of 
compensation or $49,000 for 2010. 
 
Employees of certain small employers may have contributions made to the salary reduction simplified employee 
pension plan (SAR/SEP) on their behalf on a salary reduction basis. The amount that an employee chooses to defer 
and contribute to the SAR/SEP is referred to as an elective deferral. 
 
These elective deferrals are subject to the same cap as elective deferrals to IRC Section 401(k) plans, see table 
below. In addition to the elective deferrals, SAR/SEP may permit additional elective deferrals by individuals age 50 or 
over, referred to as “catch-up contributions”. 
 
No new SAR/SEP are permitted after 1996 for any employer, but those in effect prior to 1997 may continue to operate, 
receive contributions, and add new employees. 
 
Employees of tax-exempt organizations and state and local government agencies are not eligible for SAR/SEPs. 

  Salary Reduction Simplified Employee Pension Plan (SAR-SEP) 
Year  Elective Deferral  Catch-up Contribution 
2009  $16,500  $5,500 
2010  $16,500  $5,500 

Taxation of Distributions. Generally, distribution payments from SEPs and SAR/SEPs are subject to the same 
distribution rules described above for IRAs. 
 
Required Distributions. SEPs and SAR/SEPs are subject to the same minimum required distribution rules described 
above for IRAs. 
 
Tax-Free Rollovers. Generally, rollovers and direct transfers may be made to and from SEPs and SAR/SEPs in the 
same manner as described above for IRAs, subject to the same conditions and limitations. 


SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE IRA) 
Contributions. Under Section 408(p) of the Code, employers may establish a type of IRA plan known as a SIMPLE 
IRA. Employees may have contributions made to the SIMPLE IRA on a salary reduction basis. The amount that an 
employee chooses to defer and contribute to the SIMPLE IRA is referred to as an elective deferral. 
 
These elective deferrals cannot exceed the amounts shown in the chart. In addition to the elective deferrals, SIMPLE 
IRA may permit additional elective deferrals by individuals age 50 or over, referred to as “catch-up contributions”. 
 
Elective contribution amounts made under the salary reduction portions (i.e., those subject to the $11,500 limit in 
2010) of a SIMPLE IRA plan are counted in the overall limit on elective deferrals by any individual. For example, an 
individual under age 50 who defers the maximum of $11,500 to a SIMPLE IRA of (i.e., $16,500 for 2010) one 
employer and participates in a 401(k) plan of another employer would be limited to an elective deferral of $5,000 in 
2010 ($16,500 – $11,500) to the 401(k) plan. 
 
The employer generally must match either 100% of the employee’s elective deferral, up to 3% of the employee’s 
compensation or fixed nonelective contributions of 2% of compensation. 

  Savings Incentive Match Plan for Employees (SIMPLE IRA)   
      401(k) Elective 
Year  Elective Deferral  Catch-up Contribution  Deferral 
2009  $11,500  $2,500  $16,500 
2010  $11,500  $2,500  $16,500 

Taxation of Distributions. Generally, distribution payments from SIMPLE IRAs are subject to the same distribution 
rules described above for IRAs, except that distributions made within two years of the date of an employee’s first 
participation in a SIMPLE IRA of an employer are subject to a 25% penalty tax instead of the 10% penalty tax 
discussed previously. 
 
Required Distributions. SIMPLE IRAs are subject to the same minimum required distribution rules described above for 
IRAs. 
 
Tax-Free Rollovers. Direct transfers may be made among SIMPLE IRAs in the same manner as described above for 
IRAs, subject to the same conditions and limitations. Rollovers from SIMPLE IRAs are permitted after two years have 
elapsed from the date of an employee’s first participation in a SIMPLE IRA of the employer. Rollovers to SIMPLE IRAs 
from other plans are not permitted. 
 
ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRA) 
Contribution. Under Section 408A of the Code, individuals may contribute to a Roth IRA on his/her own behalf up to 
the lesser of maximum annual contribution limit as shown in the chart or 100% of compensation. In addition, the 
contribution must be reduced by the amount of any contributions made to other IRAs for the benefit of the same 
individual. 
 
Individuals age 50 or over are also permitted to make additional “catch-up” contributions. The additional contribution is 
$1,000 for 2009 and 2010. 

Roth IRA - Maximum Annual Contribution
Year  Individual Roth IRA  Catch-up Contribution 
2009  $5,000  $1,000 
2010  $5,000  $1,000 

Starting in 2011, individual Roth IRA limits are indexed for cost-of-living. 


The maximum contribution is phased out for single taxpayers with adjusted gross income between $105,000 and 
$120,000 and for joint filers with adjusted gross income between $167,000 and $177,000 (see chart below). 
 
For rollovers/conversion to Roth IRAs done in 2010 only, the taxpayer does have a choice of electing a two-year 
spread option that allows deferral including the taxable amounts in gross income to years 2011 and 2012. For more 
information, please see your tax advisor. 

                           Modified Adjusted Gross Income Limits - 2010   
Single  Married Filing Joint  ROTH IRA Contribution 
$105,000 or less  $167,000 or less  Full Contribution 
$105,000 – $120,000  $167,000 – $177,000  Partial Contribution* 
$120,000 & over  $177,000 & over  No Contribution 

* Those entitled to only a partial contribution should check with a tax advisor to determine the allowable contribution. 
 
A person whose filing status is “married, filing separately” may not make a full Roth IRA contribution, unless the couple 
are separated and have been living apart for the entire year. Only a partial contribution is allowed if the Modified 
Adjusted Gross Income is less than $10,000. 
 
Taxation of Distribution. Qualified distributions are received income-tax free by the Roth IRA owner, or beneficiary in 
case of the Roth IRA owner’s death. A qualified distribution is any distribution made after five years if the IRA owner is 
over age 591/2, dies, becomes disabled, or uses the funds for first-time home buyer expenses at the time of 
distribution. The five-year period for converted amounts begins from the year of the conversion. 



 

 



Report of Independent Registered Public Accounting Firm 

The Board of Directors and Participants 
Principal Life Insurance Company 

We have audited the accompanying statements of assets and liabilities of each of the divisions of 
Principal Life Insurance Company Separate Account B (“Separate Account”) comprised of the 
divisions described in Note 1, as of December 31, 2009, and the related statements of operations 
for the year then ended and changes in net assets for each of the two years in the period then 
ended, or for those divisions operating for portions of such periods as disclosed in the financial 
statements. These financial statements are the responsibility of the management of the Separate 
Account. Our responsibility is to express an opinion on these financial statements based on our 
audits. 
 
We conducted our audits in accordance with the standards of the Public Company Accounting 
Oversight Board (United States). Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of material 
misstatement. We were not engaged to perform an audit of the Separate Account’s internal 
control over financial reporting. Our audits included consideration of internal control over 
financial reporting as a basis for designing audit procedures that are appropriate in the 
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 
Separate Account’s internal control over financial reporting. Accordingly, we express no such 
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and 
disclosures in the financial statements, assessing the accounting principles used and significant 
estimates made by management, and evaluating the overall financial statement presentation. Our 
procedures included confirmation of securities owned as of December 31, 2009 by 
correspondence with the fund companies or their transfer agents, as applicable. We believe that 
our audits provide a reasonable basis for our opinion. 
 
In our opinion, the financial statements referred to above present fairly, in all material respects, 
the financial position of each of the respective divisions of Principal Life Insurance Company 
Separate Account B at December 31, 2009, and the results of their operations and the changes in 
their net assets for the periods described above, in conformity with U.S. generally accepted 
accounting principles. 

/s/ Ernst & Young LLP 

Des Moines, Iowa 
April 27, 2010 


Principal Life Insurance Company 
Separate Account B
Statements of Assets and Liabilities 
December 31, 2009

    AIM V.I. 
  AIM V.I.  Capital 
  Basic Value  Appreciation 
  Series I  Series I 
  Division  Division 
Assets     
Investments in shares of mutual funds, at market  $ 3,530,464  $ 6,191,048 
Liabilities  –  – 
Net assets  $ 3,530,464  $ 6,191,048 
 
Net assets     
Applicable to accumulation units:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  5,663,918 
   The Principal Variable Annuity with Purchase Payment Credit Rider  –  527,130 
   Principal Investment Plus Variable Annuity  2,837,159  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  693,305  – 
Applicable to contracts in annuitization period:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 3,530,464  $ 6,191,048 
 
Investments in shares of mutual funds, at cost  $ 3,509,034  $ 7,872,827 
Shares of mutual fund owned  590,379  304,528 
Accumulation units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  763,489 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  72,645 
   Principal Investment Plus Variable Annuity  309,834  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  78,193  – 
Accumulation unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  7.42 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  7.26 
   Principal Investment Plus Variable Annuity  9.16  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  8.87  – 
Annuitized units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
 
See accompanying notes.     


    AIM V.I.  AIM V.I.  AIM V.I.   
AIM V.I.  AIM V.I.  Global  International  Small Cap  AIM V.I. 
Core Equity  Dynamics  Health Care  Growth  Equity  Technology 
Series I  Series I  Series I  Series I  Series I  Series I 
Division  Division  Division  Division  Division  Division 
 
$ 31,520,243  $ 2,467,745  $ 8,655,471  $ 3,242,642  $ 5,661,780  $ 5,387,926 
–  –  –  –  –  – 
$ 31,520,243  $ 2,467,745  $ 8,655,471  $ 3,242,642  $ 5,661,780  $ 5,387,926 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
26,114,159  1,260,942  5,719,270  –  1,982,454  3,448,551 
5,406,084  1,206,803  2,936,201  –  851,399  1,939,375 
–  –  –  2,909,376  2,250,473  – 
–  –  –  333,266  577,454  – 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 31,520,243  $ 2,467,745  $ 8,655,471  $ 3,242,642  $ 5,661,780  $ 5,387,926 
 
$ 32,207,379  $ 2,583,325  $ 8,656,921  $ 2,954,766  $ 6,143,876  $ 4,489,920 
1,264,857  173,418  545,398  124,669  440,263  408,486 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
2,721,381  153,787  530,778  –  165,277  628,217 
595,030  155,010  286,976  –  73,305  372,080 
–  –  –  358,515  187,632  – 
–  –  –  41,471  49,721  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
9.60  8.20  10.77  –  11.99  5.49 
9.09  7.79  10.23  –  11.61  5.21 
–  –  –  8.12  11.99  – 
–  –  –  8.04  11.61  – 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  Alliance  American 
  Bernstein  Century VP 
  Small Cap  Income & 
  Growth  Growth 
  Class A  Class I 
  Division  Division 
Assets     
Investments in shares of mutual funds, at market  $ 1,901,891  $ 17,506,349 
Liabilities  –  – 
Net assets  $ 1,901,891  $ 17,506,349 
 
Net assets     
Applicable to accumulation units:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  3,165,956 
   Principal Freedom 2 Variable Annuity  –  72,260 
   The Principal Variable Annuity  –  9,525,874 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  4,742,259 
   Principal Investment Plus Variable Annuity  1,427,668  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  474,223  – 
Applicable to contracts in annuitization period:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 1,901,891  $ 17,506,349 
 
Investments in shares of mutual funds, at cost  $ 1,942,897  $ 20,450,795 
Shares of mutual fund owned  159,154  3,253,968 
Accumulation units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  339,829 
   Principal Freedom 2 Variable Annuity  –  8,559 
   The Principal Variable Annuity  –  1,053,671 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  552,426 
   Principal Investment Plus Variable Annuity  122,147  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  41,902  – 
Accumulation unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  9.32 
   Principal Freedom 2 Variable Annuity  –  8.44 
   The Principal Variable Annuity  –  9.04 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  8.58 
   Principal Investment Plus Variable Annuity  11.69  – 
   Principal Investment Plus Variable Annuity With Purchase Rider  11.32  – 
Annuitized units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
 
See accompanying notes.     


American         
Century VP         
Inflation American  American  American  American 
Protection  Century VP  Century VP  Century VP  Century VP  Asset
Class II Ultra Class I  Ultra Class II  Value Class II  Vista Class I  Allocation 
Division Division  Division  Division  Division  Division
 
$ 81,192,485  $ 5,125,570  $ 56,071,136  $ 25,911,803  $ 2,219,126  $ 52,864,573 
–  –  –  –  –  – 
$ 81,192,485  $ 5,125,570  $ 56,071,136  $ 25,911,803  $ 2,219,126  $ 52,864,573 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  185,653 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  3,376,077  –  17,743,980  –  35,742,380 
–  1,749,493  –  8,167,823  –  4,532,935 
62,739,673  –  42,158,247  –  1,400,189  8,905,835 
18,452,812  –  13,912,889  –  818,937  3,497,770 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 81,192,485  $ 5,125,570  $ 56,071,136  $ 25,911,803  $ 2,219,126  $ 52,864,573 
 
$ 77,916,115  $ 5,547,234  $ 63,938,726  $ 35,119,795  $ 2,857,446  $ 55,301,013 
7,566,867  631,228  6,974,022  4,898,261  168,243  4,565,162 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  140,946 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  406,958  –  1,519,518  –  1,540,209 
–  222,095  –  732,230  –  206,305 
5,350,399  –  4,281,411  –  122,993  383,762 
1,625,132  –  1,459,189  –  74,291  159,189 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  1.32 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  8.30  –  11.68  –  23.21 
–  7.88  –  11.15  –  21.97 
11.73  –  9.85  –  11.38  23.21 
11.36  –  9.53  –  11.02  21.97 
 
–  –  –  –  –  -
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  Bond & 
  Mortgage 
  Balanced Securities 
  Division Division 
Assets 
Investments in shares of mutual funds, at market  $ 44,052,089  $ 251,405,465 
Liabilities  –  – 
Net assets  $ 44,052,089  $ 251,405,465 
 
Net assets 
Applicable to accumulation units: 
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  658,482  309,892 
   Premier Variable  2,242,292  3,362,435 
   Principal Freedom Variable Annuity  –  7,645,771 
   Principal Freedom 2 Variable Annuity  –  407,788 
   The Principal Variable Annuity  34,174,449  98,179,377 
   The Principal Variable Annuity With Purchase Payment Credit Rider  6,976,866  33,843,802 
   Principal Investment Plus Variable Annuity  –  82,895,014 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  24,761,386 
Applicable to contracts in annuitization period: 
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 44,052,089  $ 251,405,465 
 
Investments in shares of mutual funds, at cost  $ 51,317,408  $ 284,791,477 
Shares of mutual fund owned  3,572,756  25,040,385 
Accumulation units outstanding: 
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  351,122  148,610 
   Premier Variable  1,156,167  1,559,214 
   Principal Freedom Variable Annuity  –  549,453 
   Principal Freedom 2 Variable Annuity  –  39,077 
   The Principal Variable Annuity  1,955,225  5,196,887 
   The Principal Variable Annuity With Purchase Payment Credit Rider  421,590  1,892,033 
   Principal Investment Plus Variable Annuity  –  4,387,856 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  1,384,285 
Accumulation unit value: 
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  1.88  2.09 
   Premier Variable  1.94  2.16 
   Principal Freedom Variable Annuity  –  13.91 
   Principal Freedom 2 Variable Annuity  –  10.44 
   The Principal Variable Annuity  17.48  18.89 
   The Principal Variable Annuity With Purchase Payment Credit Rider  16.55  17.89 
   Principal Investment Plus Variable Annuity  –  18.89 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  17.89 
Annuitized units outstanding: 
   Bankers Flexible Annuity  - -
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value: 
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes. 


    Fidelity VIP  Fidelity VIP 
Dreyfus IP    Equity-Income  Growth 
Capital Diversified  Technology Growth  Equity  Service  Service 
Appreciation  International  Service Shares  Income  Class 2  Class 
Division Division  Division  Division  Division  Division 
 
$ 4,670,335  $ 176,753,296  $ 2,424,974  $ 162,643,939  $ 44,737,069  $ 17,733,739 
–  –  –  –  –  – 
$ 4,670,335  $ 176,753,296  $ 2,424,974  $ 162,643,939  $ 44,737,069  $ 17,733,739 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  534,446  –  –  –  – 
–  4,353,411  –  31,452  –  – 
–  4,249,585  –  –  –  – 
60,130  779,484  –  –  –  – 
–  101,265,893  –  23,441,014  25,140,820  14,225,343 
–  26,198,202  –  5,493,123  12,336,233  3,508,396 
3,364,613  31,429,434  1,898,567  104,501,525  5,624,777  – 
1,245,592  7,942,841  526,407  29,176,825  1,635,239  – 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 4,670,335  $ 176,753,296  $ 2,424,974  $ 162,643,939  $ 44,737,069  $ 17,733,739 
 
$ 4,536,049  $ 224,854,830  $ 2,161,793  $ 214,609,930  $ 59,288,280  $ 24,384,855 
242,867  15,725,382  247,952  12,368,361  2,699,883  591,914 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  234,443  –  –  –  – 
–  1,847,001  –  31,134  –  – 
–  333,067  –  –  –  – 
6,825  82,830  –  –  –  – 
–  4,828,110  –  2,921,508  2,487,452  1,964,968 
–  1,319,244  –  697,034  1,277,755  511,856 
385,001  1,498,492  153,297  13,024,275  556,550  – 
144,837  399,976  43,895  3,702,310  169,383  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  2.28  –  –  –  – 
–  2.36  –  1.01  –  – 
–  12.76  –  –  –  – 
8.81  9.41  –  –  –  – 
–  20.97  –  8.02  10.11  7.24 
–  19.86  –  7.88  9.65  6.85 
8.74  20.97  12.39  8.02  10.11  – 
8.60  19.86  11.99  7.88  9.65  – 
 
–  - –  –  –  – 
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  Fidelity VIP Fidelity VIP 
  Growth Overseas 
  Service Service 
  Class 2 Class 2 
  Division Division 
Assets   
Investments in shares of mutual funds, at market  $ 6,438,269  $ 46,197,413 
Liabilities  –  – 
Net assets  $ 6,438,269  $ 46,197,413 
 
Net assets   
Applicable to accumulation units:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  4,225,333  33,933,853 
   Principal Investment Plus Variable Annuity With Purchase Rider  2,212,936  12,263,560 
Applicable to contracts in annuitization period:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 6,438,269  $ 46,197,413 
 
Investments in shares of mutual funds, at cost  $ 7,571,572  $ 57,425,487 
Shares of mutual fund owned  216,412  3,096,341 
Accumulation units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  426,400  2,659,214 
   Principal Investment Plus Variable Annuity With Purchase Rider  230,631  992,491 
Accumulation unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  9.91  12.76 
   Principal Investment Plus Variable Annuity With Purchase Rider  9.60  12.36 
Annuitized units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes.   


      Goldman Sachs   
Fidelity VIP II  Fidelity VIP II  Fidelity VIP III  Goldman Sachs  VIT Structured  Government 
Contrafund  Contrafund  Mid Cap  VIT Mid Cap  Small Cap  & High 
Service Service  Service  Value Service  Equity Service  Quality 
Class Class 2  Class 2  Class I  Class I  Bond 
Division Division  Division  Division  Division  Division 
 
$ 66,028,352  $ 41,367,396  $ 7,571,279  $ 15,906,098  $ 4,413,535  $ 209,263,572 
–  –  –  –  –  – 
$ 66,028,352  $ 41,367,396  $ 7,571,279  $ 15,906,098  $ 4,413,535  $ 209,263,572 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  140,086 
–  –  –  –  –  28,651 
–  –  –  –  –  260,744 
–  –  –  –  –  3,659,928 
–  –  –  –  –  3,747,124 
–  –  –  –  –  284,885 
53,410,068  –  –  –  –  117,714,146 
12,618,284  –  –  –  –  32,343,567 
–  33,309,009  5,794,410  11,286,907  3,287,950  39,796,347 
–  8,058,387  1,776,869  4,619,191  1,125,585  11,288,094 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 66,028,352  $ 41,367,396  $ 7,571,279  $ 15,906,098  $ 4,413,535  $ 209,263,572 
 
$ 81,471,581  $ 52,118,986  $ 8,545,548  $ 21,135,430  $ 5,925,212  $ 221,545,501 
3,213,058  2,038,807  301,645  1,401,418  500,401  19,929,864 
 
–  –  –  –  –  – 
–  –  –  –  –  47,952 
–  –  –  –  –  8,771 
–  –  –  –  –  116,062 
–  –  –  –  –  1,567,508 
–  –  –  –  –  331,664 
–  –  –  –  –  26,126 
4,098,465  –  –  –  –  6,109,518 
1,022,672  –  –  –  –  1,772,931 
–  2,634,646  396,195  911,491  359,968  2,065,524 
–  658,261  125,471  385,240  127,265  618,776 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  2.92 
–  –  –  –  –  3.27 
–  –  –  –  –  2.25 
–  –  –  –  –  2.33 
–  –  –  –  –  11.30 
–  –  –  –  –  10.90 
13.03  –  –  –  –  19.27 
12.34  –  –  –  –  18.24 
–  12.64  14.63  12.38  9.13  19.27 
–  12.24  14.16  11.99  8.84  18.24 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  International   
  Emerging International 
  Markets SmallCap 
  Division Division 
Assets   
Investments in shares of mutual funds, at market  $ 103,506,306  $ 64,313,748 
Liabilities  –  – 
Net assets  $ 103,506,306  $ 64,313,748 
 
Net assets   
Applicable to accumulation units:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  660,496  126,489 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  47,586,565  35,707,564 
   The Principal Variable Annuity With Purchase Payment Credit Rider  17,844,178  10,907,205 
   Principal Investment Plus Variable Annuity  27,277,042  12,313,987 
   Principal Investment Plus Variable Annuity With Purchase Rider  10,138,025  5,258,503 
Applicable to contracts in annuitization period:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 103,506,306  $ 64,313,748 
 
Investments in shares of mutual funds, at cost  $ 116,096,605  $ 93,547,841 
Shares of mutual fund owned  6,965,431  5,413,615 
Accumulation units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  194,490  71,012 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  1,531,257  1,642,179 
   The Principal Variable Annuity With Purchase Payment Credit Rider  606,449  529,801 
   Principal Investment Plus Variable Annuity  877,743  566,312 
   Principal Investment Plus Variable Annuity With Purchase Rider  344,554  255,422 
Accumulation unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  3.40  1.78 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  31.08  21.74 
   The Principal Variable Annuity With Purchase Payment Credit Rider  29.42  20.59 
   Principal Investment Plus Variable Annuity  31.08  21.74 
   Principal Investment Plus Variable Annuity With Purchase Rider  29.42  20.59 
Annuitized units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes.   


Janus Aspen           
Enterprise  LargeCap  LargeCap  LargeCap  LargeCap  LargeCap 
Service Shares  Blend II  Growth  Growth I  S&P 500 Index  Value 
Division  Division  Division  Division  Division  Division 
 
$ 12,455,300  $ 159,053,183  $ 58,964,306  $ 118,872,817  $ 96,031,039  $ 99,153,018 
–  –  –  –  –  – 
$ 12,455,300  $ 159,053,183  $ 58,964,306  $ 118,872,817  $ 96,031,039  $ 99,153,018 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ 1,104,794 
–  –  –  –  –  1,600,642 
–  –  –  –  –  118,267 
–  –  670,238  –  –  601,618 
–  –  3,921,087  431,960  673,824  6,505,796 
–  –  –  1,668,046  9,028,647  3,041,972 
–  –  –  92,937  648,527  460,098 
9,726,570  44,981,822  39,890,572  91,709,515  44,641,253  63,189,646 
2,728,730  20,439,735  3,191,233  14,525,204  15,126,122  9,396,247 
–  70,959,981  9,106,492  7,786,695  20,555,954  9,113,533 
–  22,671,645  2,184,684  2,658,460  5,356,712  3,916,190 
 
–  –  –  –  –  534 
–  –  –  –  –  103,681 
$ 12,455,300  $ 159,053,183  $ 58,964,306  $ 118,872,817  $ 96,031,039  $ 99,153,018 
 
$ 10,820,425  $ 231,582,216  $ 68,444,229  $ 117,192,123  $ 104,292,009  $ 138,546,898 
416,565  25,612,429  4,613,796  6,644,651  12,186,680  4,646,345 
 
–  –  –  –  –  35,023 
–  –  –  –  –  303,950 
–  –  –  –  –  36,027 
–  –  403,752  –  –  230,443 
–  –  2,284,290  419,627  667,948  2,398,255 
–  –  –  184,270  1,016,883  338,224 
–  –  –  10,294  72,051  55,630 
1,320,808  4,141,223  2,522,508  3,220,402  5,247,534  2,964,263 
391,375  1,969,952  213,141  538,719  1,877,957  465,546 
–  6,532,886  575,869  273,430  2,416,364  427,523 
–  2,185,060  145,918  98,598  665,062  194,032 
 
$ –  $ –  $ –  $ –  $ –  $ 31.56 
–  –  –  –  –  5.27 
–  –  –  –  –  6.16 
–  –  1.66  –  –  2.61 
–  –  1.72  1.03  1.01  2.71 
–  –  –  9.05  8.88  8.99 
–  –  –  9.03  9.00  8.27 
7.36  10.86  15.81  28.48  8.51  21.32 
6.97  10.38  14.97  26.96  8.05  20.18 
–  10.86  15.81  28.48  8.51  21.32 
–  10.38  14.97  26.96  8.05  20.18 
 
–  –  –  –  –  17 
–  –  –  –  –  16,827 
 
$ –  $ –  $ –  $ –  $ –  $ 31.56 
–  –  –  –  –  6.16 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  MFS VIT 
  LargeCap Utilities 
  Value III Service Class 
  Division Division 
Assets   
Investments in shares of mutual funds, at market  $ 128,180,205  $ 593,500 
Liabilities  –  – 
Net assets  $ 128,180,205  $ 593,500 
 
Net assets   
Applicable to accumulation units:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  33,349,871  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  13,342,325  – 
   Principal Investment Plus Variable Annuity  61,273,399  396,845 
   Principal Investment Plus Variable Annuity With Purchase Rider  20,214,610  196,655 
Applicable to contracts in annuitization period:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 128,180,205  $ 593,500 
 
Investments in shares of mutual funds, at cost  $ 166,319,294  $ 559,126 
Shares of mutual fund owned  14,801,409  26,203 
Accumulation units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  3,448,727  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  1,444,391  – 
   Principal Investment Plus Variable Annuity  6,336,320  30,463 
   Principal Investment Plus Variable Annuity With Purchase Rider  2,188,362  15,153 
Accumulation unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  9.67  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  9.24  – 
   Principal Investment Plus Variable Annuity  9.67  13.03 
   Principal Investment Plus Variable Annuity With Purchase Rider  9.24  12.98 
Annuitized units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
 
See accompanying notes.   


MFS VIT           
Value  MidCap  MidCap  MidCap  Money  Mortgage 
Service Class  Blend  Growth I  Value II  Market  Securities 
Division  Division  Division  Division  Division  Division 
 
$ 467,274  $ 245,427,397  $ 34,961,922  $ 78,304,290  $ 164,648,786  $ 12,511,127 
–  –  –  –  –  – 
$ 467,274  $ 245,427,397  $ 34,961,922  $ 78,304,290  $ 164,648,786  $ 12,511,127 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  154,557  – 
–  –  –  –  7,566  – 
–  981,176  –  –  474,416  – 
–  5,415,464  18,864  162,508  5,764,967  – 
–  3,446,787  958,534  4,108,339  4,351,479  123,617 
–  374,822  111,136  251,070  1,417,028  7,659 
–  144,436,495  20,184,678  24,323,103  83,991,581  3,071,734 
–  25,370,903  7,333,094  11,291,384  21,078,125  901,724 
385,721  50,053,149  4,612,498  29,481,884  35,925,842  7,368,664 
81,553  15,348,601  1,743,118  8,686,002  11,483,225  1,037,729 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 467,274  $ 245,427,397  $ 34,961,922  $ 78,304,290  $ 164,648,786  $ 12,511,127 
 
$ 450,793  $ 273,083,481  $ 41,022,450  $ 99,735,549  $ 164,648,785  $ 12,768,605 
40,006  7,853,676  4,310,964  7,551,041  164,648,787  1,242,416 
 
–  –  –  –  –  – 
–  –  –  –  67,349  – 
–  –  –  –  3,002  – 
–  255,008  –  –  288,633  – 
–  1,361,016  16,590  121,152  3,372,411  – 
–  180,469  80,849  222,626  350,607  11,595 
–  36,024  12,635  31,799  131,031  719 
–  4,034,821  1,900,540  1,997,867  5,866,142  289,375 
–  748,543  729,271  976,752  1,554,810  85,515 
31,755  1,398,241  434,306  2,421,606  2,509,132  694,242 
6,739  452,849  173,354  751,377  847,050  98,423 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  2.29  – 
–  –  –  –  2.52  – 
–  3.85  –  –  1.64  – 
–  3.98  1.14  1.34  1.71  – 
–  19.10  11.86  18.45  12.41  10.66 
–  10.40  8.80  7.90  10.82  10.65 
–  35.80  10.62  12.17  14.32  10.61 
–  33.89  10.06  11.56  13.56  10.54 
12.15  35.80  10.62  12.17  14.32  10.61 
12.10  33.89  10.06  11.56  13.56  10.54 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  Neuberger  Neuberger 
  Berman AMT  Berman AMT 
  Partners  Small-Cap Growth 
  I Class  S Class 
  Divison  Divison 
Assets     
Investments in shares of mutual funds, at market  $ 5,363,788  $ 2,780,445 
Liabilities  –  – 
Net assets  $ 5,363,788  $ 2,780,445 
 
Net assets     
Applicable to accumulation units:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  4,072,148  1,842,972 
   Principal Investment Plus Variable Annuity With Purchase Rider  1,291,640  937,473 
Applicable to contracts in annuitization period:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 5,363,788  $ 2,780,445 
 
Investments in shares of mutual funds, at cost  $ 7,843,038  $ 3,427,148 
Shares of mutual fund owned  546,767  271,263 
Accumulation units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  343,586  221,323 
   Principal Investment Plus Variable Annuity With Purchase Rider  112,550  116,268 
Accumulation unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  11.85  8.33 
   Principal Investment Plus Variable Annuity With Purchase Rider  11.48  8.06 
Annuitized units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes.     


Neuberger           
Berman AMT  PIMCO  PIMCO  Principal     
Socially  All Asset  Total Return  LifeTime  Principal  Principal 
Responsive  Administrative  Administrative  Strategic  LifeTime  LifeTime 
I Class  Class  Class  Income  2010  2020 
Divison  Division  Division  Division  Division  Division 
 
$ 5,324,126  $ 518,508  $ 4,272,915  $ 21,415,422  $ 37,829,730  $ 160,531,441 
–  –  –  –  –  – 
$ 5,324,126  $ 518,508  $ 4,272,915  $ 21,415,422  $ 37,829,730  $ 160,531,441 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  956,776  3,197,588  4,840,233 
–  –  –  1,051,105  1,228,538  2,027,010 
–  –  –  433,631  185,399  753,013 
4,317,392  406,853  3,764,048  16,766,877  28,272,745  118,543,274 
1,006,734  111,655  508,867  2,207,033  4,945,460  34,367,911 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
$ 5,324,126  $ 518,508  $ 4,272,915  $ 21,415,422  $ 37,829,730  $ 160,531,441 
 
$ 5,869,807  $ 523,503  $ 4,367,570  $ 23,344,051  $ 44,244,638  $ 190,861,873 
440,010  49,618  394,909  2,216,917  3,928,321  16,101,448 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  99,409  338,151  512,436 
–  –  –  97,548  112,885  180,982 
–  –  –  41,554  17,590  69,422 
384,384  35,413  352,887  1,556,051  2,598,381  10,583,880 
92,566  9,756  47,888  211,493  469,307  3,168,383 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  –  –  – 
–  –  –  9.62  9.46  9.45 
–  –  –  10.78  10.88  11.20 
–  –  –  10.44  10.54  10.85 
11.23  11.49  10.67  10.78  10.88  11.20 
10.88  11.45  10.63  10.44  10.54  10.85 
 
–  –  –  –  –  – 
–  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
–  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  Principal  Principal 
  LifeTime  LifeTime 
  2030 2040 
  Division  Division 
Assets   
Investments in shares of mutual funds, at market  $ 51,252,035  $ 8,166,861 
Liabilities  –  – 
Net assets  $ 51,252,035  $ 8,166,861 
 
Net assets   
Applicable to accumulation units:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  2,847,683  273,699 
   The Principal Variable Annuity  885,779  20,102 
   The Principal Variable Annuity With Purchase Payment Credit Rider  82,210  18,491 
   Principal Investment Plus Variable Annuity  36,907,988  6,136,373 
   Principal Investment Plus Variable Annuity With Purchase Rider  10,528,375  1,718,196 
Applicable to contracts in annuitization period:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 51,252,035  $ 8,166,861 
 
Investments in shares of mutual funds, at cost  $ 51,218,566  $ 10,339,483 
Shares of mutual fund owned  5,203,252  816,686 
Accumulation units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  308,140  29,967 
   The Principal Variable Annuity  80,856  1,824 
   The Principal Variable Annuity With Purchase Payment Credit Rider  7,749  1,732 
   Principal Investment Plus Variable Annuity  3,369,008  556,739 
   Principal Investment Plus Variable Annuity With Purchase Rider  992,341  160,965 
Accumulation unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  – 
   Principal Freedom 2 Variable Annuity  9.24  9.13 
   The Principal Variable Annuity  10.96  11.02 
   The Principal Variable Annuity With Purchase Payment Credit Rider  10.61  10.67 
   Principal Investment Plus Variable Annuity  10.96  11.02 
   Principal Investment Plus Variable Annuity With Purchase Rider  10.61  10.67 
Annuitized units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes.   


        SAM  SAM  SAM 
Principal    SAM  Conservative  Conservative  Flexible 
LifeTime  Real Estate  Balanced  Balanced  Growth  Income 
2050 Securities  Portfolio  Portfolio  Portfolio  Portfolio 
Division  Division  Division  Division  Division  Division 
 
$ 5,018,211  $ 72,273,908  $ 577,353,403  $ 138,648,563  $ 41,606,215  $ 128,679,626 
–  –  –  –  –  – 
$ 5,018,211  $ 72,273,908  $ 577,353,403  $ 138,648,563  $ 41,606,215  $ 128,679,626 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  131,840  –  –  –  – 
  –  –  –  –  –  – 
122,279  191,221  1,844,240  520,044  1,067,090  70,662 
  99,640  38,939,647  27,539,707  15,386,354  9,265,755  19,014,037 
  97,671  17,775,580  9,652,317  3,391,018  3,753,975  7,488,330 
3,500,799  11,336,144  477,473,654  99,434,280  19,594,437  85,393,516 
1,197,822  3,899,476  60,843,485  19,916,867  7,924,958  16,713,081 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
$ 5,018,211  $ 72,273,908  $ 577,353,403  $ 138,648,563  $ 41,606,215  $ 128,679,626 
 
$ 6,165,329  $ 99,896,579  $ 574,515,320  $ 130,770,069  $ 44,338,898  $ 122,067,534 
507,403  6,673,491  42,050,503  12,673,543  3,014,943  10,768,170 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  58,930  –  –  –  – 
  –  –  –  –  –  – 
  13,508  22,231  198,973  52,545  125,168  6,797 
  9,081  1,559,944  2,995,132  1,567,121  1,095,621  1,843,636 
  9,191  752,107  1,066,744  350,968  451,070  737,827 
319,041  454,125  51,927,947  10,127,547  2,316,947  8,279,871 
112,717  164,989  6,724,157  2,061,387  952,254  1,646,735 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  2.24  –  –  –  – 
  –  –  –  –  –  – 
  9.05  8.60  9.27  9.90  8.53  10.40 
  10.97  24.96  9.19  9.82  8.46  10.31 
  10.63  23.63  9.05  9.66  8.32  10.15 
  10.97  24.96  9.19  9.82  8.46  10.31 
  10.63  23.63  9.05  9.66  8.32  10.15 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

  SAM  
  Strategic   
  Growth  Short-Term 
  Portfolio  Bond 
  Division  Division 
Assets   
Investments in shares of mutual funds, at market  $ 30,168,999  $ 125,715,000 
Liabilities  –  – 
Net assets  $ 30,168,999  $ 125,715,000 
 
Net assets   
Applicable to accumulation units:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  2,516,386 
   Principal Freedom 2 Variable Annuity  607,712  47,783 
   The Principal Variable Annuity  6,736,096  22,411,333 
   The Principal Variable Annuity With Purchase Payment Credit Rider  1,909,871  7,104,582 
   Principal Investment Plus Variable Annuity  14,279,095  71,756,038 
   Principal Investment Plus Variable Annuity With Purchase Rider  6,636,225  21,878,878 
Applicable to contracts in annuitization period:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 30,168,999  $ 125,715,000 
 
Investments in shares of mutual funds, at cost  $ 31,460,250  $ 137,415,171 
Shares of mutual fund owned  2,034,322  14,189,052 
Accumulation units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  245,429 
   Principal Freedom 2 Variable Annuity  75,186  4,744 
   The Principal Variable Annuity  840,112  2,244,669 
   The Principal Variable Annuity With Purchase Payment Credit Rider  242,052  740,467 
   Principal Investment Plus Variable Annuity  1,780,873  7,186,787 
   Principal Investment Plus Variable Annuity With Purchase Rider  841,065  2,280,259 
Accumulation unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  –  10.25 
   Principal Freedom 2 Variable Annuity  8.08  10.07 
   The Principal Variable Annuity  8.02  9.98 
   The Principal Variable Annuity With Purchase Payment Credit Rider  7.89
8.02 		 9.59 
   Principal Investment Plus Variable Annuity  9.98 
   Principal Investment Plus Variable Annuity With Purchase Rider  7.89  9.59 
Annuitized units outstanding:   
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:   
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
See accompanying notes.   


          T. Rowe Price  T. Rowe Price 
Short-Term  SmallCap  SmallCap  SmallCap  Blue Chip  Health 
Income Blend  Growth II  Value I  Growth II  Sciences II 
Division  Division  Division  Division  Division  Division 
 
$ 23,551,170  $ 33,828,969  $ 28,675,186  $ 80,631,904  $ 5,001,145  $ 4,868,700 
  –  –  –  –  –  – 
$ 23,551,170  $ 33,828,969  $ 28,675,186  $ 80,631,904  $ 5,001,145  $ 4,868,700 
 
 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  121,415  63,697  173,330  –  – 
94,793  2,965,174  808,176  –  –  – 
51,664  87,212  104,175  247,106  –  – 
5,515,938  23,927,906  17,470,734  27,545,894  –  – 
1,772,599  6,727,262  4,082,122  10,099,666  –  – 
14,333,301  –  4,648,666  33,240,770  4,214,371  3,694,172 
1,782,875  –  1,497,616  9,325,138  786,774  1,174,528 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
$ 23,551,170  $ 33,828,969  $ 28,675,186  $ 80,631,904  $ 5,001,145  $ 4,868,700 
 
$ 23,578,496  $ 42,901,217  $ 38,314,562  $ 105,434,595  $ 4,541,163  $ 4,553,424 
9,573,646  5,034,073  3,258,544  7,459,010  526,436  386,098 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  119,212  99,608  121,837  –  – 
  8,704  229,009  105,420  –  –  – 
  4,749  10,917  13,228  32,733  –  – 
508,750  2,359,379  2,071,531  1,535,248  –  – 
164,583  700,611  511,237  594,520  –  – 
1,321,901  –  551,207  1,852,646  382,908  257,111 
165,525  –  187,561  548,927  73,825  84,422 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
  –  1.02  0.64  1.42  –  – 
  10.89  12.95  7.67  –  –  – 
  10.88  7.99  7.88  7.55  –  – 
  10.84  10.14  8.43  17.94  –  – 
  10.77  9.60  7.98  16.99  –  – 
  10.84  –  8.43  17.94  11.01  14.37 
  10.77  –  7.98  16.99  10.66  13.91 
 
  –  –  –  –  –  – 
  –  –  –  –  –  – 
 
$ –  $ –  $ –  $ –  $ –  $ – 
  –  –  –  –  –  – 


Principal Life Insurance Company
Separate Account B
Statements of Assets and Liabilities (continued) 
December 31, 2009

    Van Eck 
  Templeton  Worldwide 
  Growth Securities  Hard Assets 
  Class 2  Service Class 
  Division  Division 
Assets     
Investments in shares of mutual funds, at market  $ 1,315,317  $ 1,081,465 
Liabilities  –  – 
Net assets  $ 1,315,317  $ 1,081,465 
 
Net assets     
Applicable to accumulation units:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  1,315,317  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  –  785,381 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  296,084 
Applicable to contracts in annuitization period:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Total net assets  $ 1,315,317  $ 1,081,465 
 
Investments in shares of mutual funds, at cost  $ 1,554,746  $ 1,055,435 
Shares of mutual fund owned  126,473  37,551 
Accumulation units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  91,936  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  –  59,618 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  22,561 
Accumulation unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
   Personal Variable  –  – 
   Premier Variable  –  – 
   Principal Freedom Variable Annuity  14.31  – 
   Principal Freedom 2 Variable Annuity  –  – 
   The Principal Variable Annuity  –  – 
   The Principal Variable Annuity With Purchase Payment Credit Rider  –  – 
   Principal Investment Plus Variable Annuity  –  13.17 
   Principal Investment Plus Variable Annuity With Purchase Rider  –  13.12 
Annuitized units outstanding:     
   Bankers Flexible Annuity  –  – 
   Pension Builder Plus – Rollover IRA  –  – 
Annuitized unit value:     
   Bankers Flexible Annuity  $ –  $ – 
   Pension Builder Plus – Rollover IRA  –  – 
 
See accompanying notes.     


 


Principal Life Insurance Company 
Separate Account B
Statements of Operations
Year Ended December 31, 2009 

    AIM V.I. 
  AIM V.I.  Capital 
  Basic Value  Appreciation 
  Series I  Series I 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 45,046  $ 35,713 
 
Expenses:     
     Mortality and expense risks  22,611  71,526 
     Separate account rider charges  2,487  3,752 
Net investment income (loss)  19,948  (39,565) 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (391,908)  (676,702) 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (391,908)  (676,702) 
 
Change in net unrealized appreciation or depreciation of     
     investments  1,033,694  1,709,991 
 
     Net gains (losses) on investments  661,734  993,724 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 661,734  $ 993,724 
 
 
See accompanying notes.     


    AIM V.I.  AIM V.I.  AIM V.I.   
AIM V.I.  AIM V.I.  Global  International  Small Cap  AIM V.I. 
Core Equity  Dynamics  Health Care  Growth  Equity  Technology 
Series I  Series I  Series I  Series I  Series I  Series I 
Division  Division  Division  Division  Division  Division 
 
 
$ 517,056  $ –  $ 27,304  $ 36,285  $ 8,546  $ – 
 
 
361,805  24,973  99,653  13,640  53,671  49,493 
33,819  5,896  18,127  740  7,604  8,672 
121,432  (30,869)  (90,476)  21,905  (52,729)  (58,165) 
 
 
(1,517,994)  (134,599)  (442,399)  45,012  (493,994)  (265,623) 
–  –  –  –  –  – 
(1,517,994)  (134,599)  (442,399)  45,012  (493,994)  (265,623) 
 
 
8,101,356  855,375  2,350,276  300,228  1,327,760  2,049,011 
 
6,704,794  689,907  1,817,401  367,145  781,037  1,725,223 
 
–  –  –  –  –  – 
 
$ 6,704,794  $ 689,907  $ 1,817,401  $ 367,145  $ 781,037  $ 1,725,223 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

  Alliance  American 
  Bernstein  Century VP 
  Small Cap  Income & 
  Growth  Growth 
  Class A  Class I 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ –  $ 787,980 
 
Expenses:     
     Mortality and expense risks  18,372  191,118 
     Separate account rider charges  2,138  29,067 
Net investment income (loss)  (20,510)  567,795 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (166,124)  (1,338,661) 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (166,124)  (1,338,661) 
 
Change in net unrealized appreciation or depreciation of     
     investments  691,114  3,146,056 
 
     Net gains (losses) on investments  504,480  2,375,190 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 504,480  $ 2,375,190 
 
 
See accompanying notes.     


American           
Century VP           
Inflation  American  American  American  American   
Protection  Century VP  Century VP  Century VP  Century VP  Asset 
Class II  Ultra Class I  Ultra Class II  Value Class II  Vista Class I  Allocation 
Division  Division  Division  Division  Division  Division 
 
 
$ 1,254,621  $ 12,761  $ 91,765  $ 1,311,531  $ –  $ 1,445,603 
 
 
883,101  55,475  632,867  296,530  23,969  612,562 
98,841  9,570  76,420  45,887  4,258  48,676 
272,679  (52,284)  (617,522)  969,114  (28,227)  784,365 
 
 
43,812  (425,458)  (4,150,471)  (3,206,329)  (230,776)  (2,124,367) 
–  –  –  –  –  – 
43,812  (425,458)  (4,150,471)  (3,206,329)  (230,776)  (2,124,367) 
 
 
5,666,482  1,738,953  19,391,959  6,029,843  625,969  8,962,274 
 
5,982,973  1,261,211  14,623,966  3,792,628  366,966  7,622,272 
 
–  –  –  –  –  – 
 
$ 5,982,973  $ 1,261,211  $ 14,623,966  $ 3,792,628  $ 366,966  $ 7,622,272 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

    Bond & 
    Mortgage 
  Balanced  Securities 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 2,057,341  $ 26,816,530 
 
Expenses:     
     Mortality and expense risks  503,186  2,872,542 
     Separate account rider charges  41,843  338,380 
Net investment income (loss)  1,512,312  23,605,608 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (3,562,620)  (10,699,786) 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (3,562,620)  (10,699,786) 
 
Change in net unrealized appreciation or depreciation of     
     investments  9,317,827  27,589,155 
 
     Net gains (losses) on investments  7,267,519  40,494,977 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 7,267,519  $ 40,494,977 
 
 
(1) Represented the operations of West Coast Equity Division until November 23, 2009 name change.   
 
 
 
See accompanying notes.     


        Fidelity VIP  Fidelity VIP 
    Dreyfus IP    Equity-Income  Growth 
Capital  Diversified  Technology Growth  Equity  Service  Service 
Appreciation  International  Service Shares  Income  Class 2  Class 
Division (1)  Division  Division  Division  Division  Division 
 
 
$ 52,376  $ 7,966,779  $ 1,514  $ 8,414,461  $ 810,711  $ 53,016 
 
 
37,597  1,857,298  15,567  1,771,770  489,672  203,510 
5,446  186,618  1,992  192,350  74,426  22,210 
9,333  5,922,863  (16,045)  6,450,341  246,613  (172,704) 
 
 
(229,646)  (13,975,971)  (79,610)  (12,322,227)  (4,148,510)  (2,264,227) 
–  –  –  –  –  13,894 
(229,646)  (13,975,971)  (79,610)  (12,322,227)  (4,148,510)  (2,250,333) 
 
 
1,068,023  44,023,516  612,753  31,929,448  13,727,220  6,257,651 
 
847,710  35,970,408  517,098  26,057,562  9,825,323  3,834,614 
 
–  1,400,614  –  –  –  – 
 
$ 847,710  $ 37,371,022  $ 517,098  $ 26,057,562  $ 9,825,323  $ 3,834,614 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

  Fidelity VIP  Fidelity VIP 
  Growth  Overseas 
  Service  Service 
  Class 2  Class 2 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 11,257  $ 776,220 
 
Expenses:     
     Mortality and expense risks  67,784  487,583 
     Separate account rider charges  11,403  64,323 
Net investment income (loss)  (67,930)  224,314 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (411,438)  (3,830,577) 
Capital gains distributions  4,987  127,705 
Total realized gains (losses) on investments  (406,451)  (3,702,872) 
 
Change in net unrealized appreciation or depreciation of     
     investments  1,755,226  12,911,110 
 
     Net gains (losses) on investments  1,280,845  9,432,552 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 1,280,845  $ 9,432,552 
 
 
See accompanying notes.     


        Goldman Sachs   
Fidelity VIP II  Fidelity VIP II  Fidelity VIP III  Goldman Sachs  VIT Structured  Government 
Contrafund  Contrafund  Mid Cap  VIT Mid Cap  Small Cap  & High 
Service  Service  Service  Value Service  Equity Service  Quality 
Class  Class 2  Class 2  Class I  Class I  Bond 
Division  Division  Division  Division  Division  Division 
 
 
$ 745,899  $ 412,657  $ 28,976  $ 250,668  $ 45,319  $ 13,485,368 
 
 
730,567  410,496  74,054  167,021  43,495  2,675,199 
73,638  39,201  8,446  23,628  5,671  294,661 
(58,306)  (37,040)  (53,524)  60,019  (3,847)  10,515,508 
 
 
(5,894,497)  (3,932,130)  (729,345)  (1,324,415)  (506,526)  (3,911,795) 
15,915  10,108  33,881  –  –  – 
(5,878,582)  (3,922,022)  (695,464)  (1,324,415)  (506,526)  (3,911,795) 
 
 
22,943,510  13,888,919  2,625,370  4,974,063  1,344,984  1,430,068 
 
17,006,622  9,929,857  1,876,382  3,709,667  834,611  8,033,781 
 
–  –  –  –  –  – 
 
$ 17,006,622  $ 9,929,857  $ 1,876,382  $ 3,709,667  $ 834,611  $ 8,033,781 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

  International   
  Emerging  International 
  Markets  SmallCap 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 1,656,292   $ 1,721,673 
 
Expenses:     
     Mortality and expense risks  986,517  705,924 
     Separate account rider charges  139,294  88,514 
Net investment income (loss)  530,481  927,235 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (7,529,278)  (7,484,608) 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (7,529,278)  (7,484,608) 
 
Change in net unrealized appreciation or depreciation of     
     investments  46,845,737  22,460,079 
 
     Net gains (losses) on investments  39,846,940  15,902,706 
 
     Payment from Affiliate  227,485  332,409 
 
Net increase (decrease) in net assets resulting from operations  $ 40,074,425   $ 16,235,115 
 
 
(1) Represented the operations of Janus Aspen Mid Cap Growth Service Shares Division until May 18, 2009 name change. 
 
 
See accompanying notes.     


Janus Aspen           
Enterprise  LargeCap  LargeCap  LargeCap  LargeCap  LargeCap 
Service Shares  Blend II  Growth  Growth I  S&P 500 Index  Value 
Division (1)  Division  Division  Division  Division  Division 
 
 
$ –  $ 2,623,071  $ 391,131  $ 48,055  $ 3,759,422  $ 4,545,134 
 
 
133,873  1,762,679  610,603  1,268,953  1,005,404  1,060,825 
17,493  233,330  30,264  94,172  115,353  76,866 
(151,366)  627,062  (249,736)  (1,315,070)  2,638,665  3,407,443 
 
 
(266,512)  (18,529,982)  (4,338,986)  (5,247,795)  (5,206,106)  (11,114,027) 
–  –  –  –  –  – 
(266,512)  (18,529,982)  (4,338,986)  (5,247,795)  (5,206,106)  (11,114,027) 
 
 
4,221,108  53,189,814  16,423,590  47,815,801  21,526,447  20,128,881 
 
3,803,230  35,286,894  11,834,868  41,252,936  18,959,006  12,422,297 
 
–  –  –  –  –  – 
 
$ 3,803,230  $ 35,286,894  $ 11,834,868  $ 41,252,936  $ 18,959,006  $ 12,422,297 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

    MFS VIT 
  LargeCap  Utilities 
  Value III  Service Class 
  Division  Division (1) 
Investment income (loss)     
Income:     
   Dividends  $ 4,212,541  $ – 
 
Expenses:     
     Mortality and expense risks  1,418,371  1,711 
     Separate account rider charges  179,834  247 
Net investment income (loss)  2,614,336  (1,958) 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (10,525,317)  1,718 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (10,525,317)  1,718 
 
Change in net unrealized appreciation or depreciation of     
     investments  28,295,999  34,374 
 
     Net gains (losses) on investments  20,385,018  34,134 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 20,385,018  $ 34,134 
 
 
(1) Commenced operations May 18, 2009.     
 
 
See accompanying notes.     


MFS VIT           
Value  MidCap  MidCap  MidCap  Money  Mortgage 
Service Class  Blend  Growth I  Value II  Market  Securities 
Division (1)  Division  Division  Division  Division  Division 
 
 
$ –  $ 1,858,918  $ 47,088  $ 1,298,800  $ 671,313  $ 622,612 
 
 
1,188  2,653,504  375,410  831,831  2,686,502  79,480 
130  229,075  48,902  107,060  288,703  6,977 
(1,318)  (1,023,661)  (377,224)  359,909  (2,303,892)  536,155 
 
 
322  (14,250,768)  (2,806,560)  (11,779,397)  –  (13,468) 
–  11,521,239  –  –  –  – 
322  (2,729,529)  (2,806,560)  (11,779,397)  –  (13,468) 
 
 
16,481  64,122,590  11,912,152  32,002,481  –  (256,747) 
 
15,485  60,369,400  8,728,368  20,582,993  (2,303,892)  265,940 
 
–  –  –  –  –  – 
 
$ 15,485  $ 60,369,400  $ 8,728,368  $ 20,582,993  $ (2,303,892)  $ 265,940 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

  Neuberger  Neuberger 
  Berman AMT  Berman AMT 
  Partners  Small-Cap Growth 
  I Class  S Class 
  Divison  Divison 
Investment income (loss)     
Income:     
   Dividends  $ 109,268  $ – 
 
Expenses:     
     Mortality and expense risks  51,383  26,865 
     Separate account rider charges  6,103  4,663 
Net investment income (loss)  51,782  (31,528) 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (1,163,852)  (182,188) 
Capital gains distributions  485,380  – 
Total realized gains (losses) on investments  (678,472)  (182,188) 
 
Change in net unrealized appreciation or depreciation of     
     investments  2,281,197  656,221 
 
     Net gains (losses) on investments  1,654,507  442,505 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 1,654,507  $ 442,505 
 
 
(1) Commenced operations May 18, 2009.     
 
 
See accompanying notes.     


Neuberger           
Berman AMT  PIMCO  PIMCO  Principal     
Socially  All Asset  Total Return  LifeTime  Principal  Principal 
Responsive  Administrative  Administrative  Strategic  LifeTime  LifeTime 
I Class  Class  Class  Income  2010  2020 
Divison  Division (1)  Division (1)  Division  Division  Division 
 
 
$ 94,147  $ 23,641  $ 36,770  $ 951,001  $ 1,378,729  $ 4,626,700 
 
 
50,041  1,672  12,028  228,985  393,649  1,644,420 
4,719  151  747  14,497  27,474  177,124 
39,387  21,818  23,995  707,519  957,606  2,805,156 
 
 
(486,365)  383  2,158  (1,122,100)  (2,229,438)  (6,294,996) 
–  –  113,337  160,265  59,390  – 
(486,365)  383  115,495  (961,835)  (2,170,048)  (6,294,996) 
 
 
1,485,733  (4,995)  (94,655)  3,352,920  8,075,389  35,355,976 
 
1,038,755  17,206  44,835  3,098,604  6,862,947  31,866,136 
 
–  –  –  –  –  – 
 
$ 1,038,755  $ 17,206  $ 44,835  $ 3,098,604  $ 6,862,947  $ 31,866,136 


Principal Life Insurance Company 
Separate Account B
Statements of Operations (continued) 
Year Ended December 31, 2009

  Principal  Principal 
  LifeTime  LifeTime 
  2030  2040 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 568,352  $ 194,127 
 
Expenses:     
     Mortality and expense risks  374,988  89,170 
     Separate account rider charges  39,665  9,368 
Net investment income (loss)  153,699  95,589 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (1,459,968)  (807,702) 
Capital gains distributions  36,914  – 
Total realized gains (losses) on investments  (1,423,054)  (807,702) 
 
Change in net unrealized appreciation or depreciation of     
     investments  9,452,110  2,436,867 
 
     Net gains (losses) on investments  8,182,755  1,724,754 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 8,182,755  $ 1,724,754 
 
 
See accompanying notes.     


      SAM  SAM  SAM 
Principal    SAM  Conservative  Conservative  Flexible 
LifeTime  Real Estate  Balanced  Balanced  Growth  Income 
2050  Securities  Portfolio  Portfolio  Portfolio  Portfolio 
Division  Division  Division  Division  Division  Division 
 
 
$ 98,232  $ 2,467,982  $ 14,264,417  $ 3,097,976  $ 1,611,502  $ 4,329,150 
 
 
52,311  732,490  4,674,237  1,208,867  393,767  1,154,749 
6,289  109,384  303,996  112,828  58,440  120,116 
39,632  1,626,108  9,286,184  1,776,281  1,159,295  3,054,285 
 
 
(374,623)  (9,695,036)  (2,360,963)  (1,899,862)  (2,365,968)  (2,364,498) 
–  –  10,725,577  1,400,241  1,794,267  849,068 
(374,623)  (9,695,036)  8,364,614  (499,621)  (571,701)  (1,515,430) 
 
 
1,361,523  23,372,325  70,590,554  18,357,269  7,205,836  15,170,884 
 
1,026,532  15,303,397  88,241,352  19,633,929  7,793,430  16,709,739 
 
–  –  –  –  –  – 
 
$ 1,026,532  $ 15,303,397  $ 88,241,352  $ 19,633,929  $ 7,793,430  $ 16,709,739 


Principal Life Insurance Company 
Separate Account B
Statements of Operations
Year Ended December 31, 2009 

  SAM   
  Strategic   
  Growth  Short-Term 
  Portfolio  Bond 
  Division  Division 
Investment income (loss)     
Income:     
   Dividends  $ 854,737  $ 7,296,439 
 
Expenses:     
     Mortality and expense risks  281,419  1,429,687 
     Separate account rider charges  38,633  159,722 
Net investment income (loss)  534,685  5,707,030 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (2,189,613)  (3,154,917) 
Capital gains distributions  319,708  – 
Total realized gains (losses) on investments  (1,869,905)  (3,154,917) 
 
Change in net unrealized appreciation or depreciation of     
     investments  7,394,328  6,749,994 
 
     Net gains (losses) on investments  6,059,108  9,302,107 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 6,059,108  $ 9,302,107 
 
 
See accompanying notes.     


        T. Rowe Price  T. Rowe Price 
Short-Term  SmallCap  SmallCap  SmallCap  Blue Chip  Health 
Income  Blend  Growth II  Value I  Growth II  Sciences II 
Division  Division  Division  Division  Division  Division 
 
 
$ 873,512  $ 217,787  $ –  $ 1,618,361  $ –  $ – 
 
 
135,835  365,750  303,928  886,187  32,917  51,589 
5,234  39,461  30,325  107,772  3,184  5,712 
732,443  (187,424)  (334,253)  624,402  (36,101)  (57,301) 
 
 
36,022  (3,234,069)  (2,980,114)  (7,979,980)  (113,736)  (215,091) 
–  –  –  –  –  – 
36,022  (3,234,069)  (2,980,114)  (7,979,980)  (113,736)  (215,091) 
 
 
(27,169)  8,913,069  9,861,828  17,927,225  1,079,077  1,376,826 
 
741,296  5,491,576  6,547,461  10,571,647  929,240  1,104,434 
 
–  –  –  –  –  – 
 
$ 741,296  $ 5,491,576  $ 6,547,461  $ 10,571,647  $ 929,240  $ 1,104,434 


Principal Life Insurance Company 
Separate Account B
Statements of Operations
Year Ended December 31, 2009 

    Van Eck 
  Templeton  Worldwide 
  Growth Securities  Hard Assets 
  Class 2  Service Class 
  Division  Division (1) 
Investment income (loss)     
Income:     
   Dividends  $ 35,468  $ – 
 
Expenses:     
     Mortality and expense risks  9,594  2,940 
     Separate account rider charges  –  485 
Net investment income (loss)  25,874  (3,425) 
 
Realized gains (losses) on investments     
Realized gains (losses) on sale of fund shares  (126,785)  19,535 
Capital gains distributions  –  – 
Total realized gains (losses) on investments  (126,785)  19,535 
 
Change in net unrealized appreciation or depreciation of     
     investments  399,572  26,030 
 
     Net gains (losses) on investments  298,661  42,140 
 
     Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  $ 298,661  $ 42,140 
 
 
(1) Commenced operations May 18, 2009     
 
 
See accompanying notes.     



Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets
Years Ended December 31, 2009 and 2008, Except as Noted 

  AIM V.I.
  Basic Value
  Series I
  Division
  2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ 19,948  $ (4,864) 
   Total realized gains (losses) on investments  (391,908)  163,671 
   Change in net unrealized appreciation or depreciation of investments  1,033,694  (944,942) 
   Net gains (lossses) from investments  661,734  (786,135) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  661,734    (786,135) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  3,293,374    588,611 
   Administration charges  (6,369)    (23) 
   Contingent sales charges  (1,121)    (1,785) 
   Contract terminations  (29,143)    (40,442) 
   Death benefit payments  –    – 
   Flexible withdrawal option payments  (20,178)    (13,011) 
   Transfer payments to other contracts  (1,209,853)    (383,996) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  2,026,710    149,354 
Total increase (decrease)  2,688,444    (636,781) 
 
Net assets at beginning of period  842,020    1,478,801 
Net assets at end of period  $ 3,530,464  $ 842,020 
 
 
See accompanying notes.       


AIM V.I.        
Capital AIM V.I. AIM V.I.
Appreciation  Core Equity  Dynamics
Series I Series I Series I
Division Division Division
2009  2008             2009  2008  2009  2008 
 
 
$ (39,565) $  (133,704)  $ 121,432   $ 243,044  $ (30,869)   $ (47,122) 
(676,702)  (308,915)  (1,517,994)  (82,697)  (134,599)  (42,749) 
1,709,991  (4,885,610)  8,101,356  (15,384,815)  855,375  (1,836,688) 
993,724  (5,328,229)  6,704,794  (15,224,468)  689,907  (1,926,559) 
 
–  –  –  –  –  – 
 
993,724  (5,328,229)  6,704,794  (15,224,468)  689,907  (1,926,559) 
 
 
 
872,366  895,684  3,505,455  1,978,598  402,387  487,791 
(1,974)  (2,580)  (15,645)  (16,899)  (274)  (356) 
(9,975)  (21,677)  (49,692)  (77,402)  (1,450)  (2,972) 
(708,562)  (1,512,703)  (3,529,853)  (5,401,288)  (102,974)  (207,421) 
(71,879)  (12,399)  (207,348)  (187,574)  –  (14,831) 
(88,229)  (186,382)  (516,173)  (807,458)  (27,877)  (47,216) 
(935,570)  (1,816,790)  (4,455,884)  (6,509,763)  (291,792)  (904,286) 
–  –  –  –  –  – 
(943,823)  (2,656,847)  (5,269,140)  (11,021,786)  (21,980)  (689,291) 
49,901  (7,985,076)  1,435,654  (26,246,254)  667,927  (2,615,850) 
 
6,141,147  14,126,223  30,084,589  56,330,843  1,799,818  4,415,668 
$ 6,191,048   $ 6,141,147  $ 31,520,243   $ 30,084,589  $ 2,467,745   $ 1,799,818 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  AIM V.I.
  Global
  Health Care 
  Series I
  Division
             2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ (90,476)  $ (172,799) 
   Total realized gains (losses) on investments  (442,399)  2,500,029 
   Change in net unrealized appreciation or depreciation of investments  2,350,276  (6,274,461) 
   Net gains (lossses) from investments  1,817,401  (3,947,231) 
 
   Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  1,817,401  (3,947,231) 
 
Changes from principal transactions:   
   Purchase payments, less sales charges, per payment fees   
and applicable premium taxes  1,239,351  1,592,273 
   Administration charges  (3,225)  (3,370) 
   Contingent sales charges  (12,526)  (15,050) 
   Contract terminations  (889,779)  (1,050,260) 
   Death benefit payments  (65,830)  (54,479) 
   Flexible withdrawal option payments  (99,921)  (142,431) 
   Transfer payments to other contracts  (1,735,382)  (1,930,945) 
   Annuity payments  –  – 
Increase (decrease) in net assets from principal transactions  (1,567,312)  (1,604,262) 
Total increase (decrease)  250,089  (5,551,493) 
 
Net assets at beginning of period  8,405,382  13,956,875 
Net assets at end of period  $ 8,655,471  $ 8,405,382 
 
 
(1) Commenced operations May 19, 2008.       
 
 
See accompanying notes.       


AIM V.I. AIM V.I.    
International  Small Cap AIM V.I.
Growth Equity Technology
Series I Series I Series I
Division (1) Division Division
           2009  2008  2009  2008  2009  2008 
 
 
$ 21,905  $ 208  $ (52,729) $  (76,412)  $ (58,165) $  (67,406) 
45,012  (10,529)  (493,994)  (196,727)  (265,623)  (112,801) 
300,228  (12,352)  1,327,760  (1,675,944)  2,049,011  (2,460,977) 
367,145  (22,673)  781,037  (1,949,083)  1,725,223  (2,641,184) 
 
–  –  –  –  –  – 
 
367,145  (22,673)  781,037  (1,949,083)  1,725,223  (2,641,184) 
 
 
 
3,315,133  171,992  2,112,745  1,428,513  2,772,736  966,164 
(7,154)  (32)  (4,196)  (1,268)  (800)  (557) 
(670)  –  (6,954)  (6,429)  (6,207)  (5,500) 
(17,430)  –  (385,147)  (394,723)  (440,936)  (383,777) 
–  –  (2,057)  (10,969)  (2,564)  (9,335) 
(3,233)  (346)  (49,723)  (48,037)  (54,851)  (76,069) 
(522,784)  (37,306)  (856,179)  (994,880)  (1,402,634)  (1,612,440) 
–  –  –  –  –  – 
2,763,862  134,308  808,489  (27,793)  864,744  (1,121,514) 
3,131,007  111,635  1,589,526  (1,976,876)  2,589,967  (3,762,698) 
 
111,635  –  4,072,254  6,049,130  2,797,959  6,560,657 
$ 3,242,642  $ 111,635  $ 5,661,780 $  4,072,254  $ 5,387,926 $  2,797,959 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Alliance
  Bernstein
  Small Cap
  Growth
  Class A
  Division
  2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ (20,510)  $ (24,012) 
   Total realized gains (losses) on investments  (166,124)  (41,887) 
   Change in net unrealized appreciation or depreciation of investments  691,114  (925,472) 
   Net gains (lossses) from investments  504,480  (991,371) 
 
   Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  504,480  (991,371) 
 
Changes from principal transactions:   
   Purchase payments, less sales charges, per payment fees   
and applicable premium taxes  637,223  741,297 
   Administration charges  497  (709) 
   Contingent sales charges  (2,152)  (1,543) 
   Contract terminations  (55,946)  (34,961) 
   Death benefit payments  (11,558)  (4,731) 
   Flexible withdrawal option payments  (8,225)  (8,386) 
   Transfer payments to other contracts  (379,102)  (325,926) 
   Annuity payments  –  – 
Increase (decrease) in net assets from principal transactions  180,737  365,041 
Total increase (decrease)  685,217  (626,330) 
 
Net assets at beginning of period  1,216,674  1,843,004 
Net assets at end of period  $ 1,901,891  $ 1,216,674 
 
 
See accompanying notes.       


American  American     
Century VP  Century VP     
Income &  Inflation American
Growth Protection  Century VP
Class I Class II Ultra Class I 
Division Division Division
2009  2008             2009    2008  2009  2008 
 
 
$ 567,795  $ 191,407  $ 272,679  $ 2,663,977  $ (52,284) $  (105,873) 
(1,338,661)  3,045,657  43,812  (38,340)  (425,458)  946,480 
3,146,056  (14,275,056)  5,666,482  (4,973,159)  1,738,953  (4,576,606) 
2,375,190  (11,037,992)  5,982,973  (2,347,522)  1,261,211  (3,735,999) 
 
–  –  –  –  –  – 
 
2,375,190  (11,037,992)  5,982,973  (2,347,522)  1,261,211  (3,735,999) 
 
 
 
1,803,378  1,673,098  29,497,984  31,436,649  925,765  1,273,012 
(2,262)  (3,038)  (488,652)  (440,824)  (1,023)  (1,533) 
(20,716)  (24,798)  (74,695)  (94,742)  (6,412)  (7,917) 
(1,647,955)  (2,269,439)  (1,941,779)  (2,146,023)  (455,502)  (552,465) 
(82,851)  (79,065)  (302,585)  (218,658)  (4,646)  (8,408) 
(269,872)  (431,511)  (1,451,541)  (1,162,278)  (65,015)  (114,924) 
(2,524,477)  (4,098,638)  (17,713,331)  (34,403,685)  (922,283)  (2,112,475) 
–  –  –  –  –  – 
(2,744,755)  (5,233,391)  7,525,401  (7,029,561)  (529,116)  (1,524,710) 
(369,565)  (16,271,383)  13,508,374  (9,377,083)  732,095  (5,260,709) 
 
17,875,914  34,147,297  67,684,111    77,061,194  4,393,475  9,654,184 
$ 17,506,349   $ 17,875,914  $ 81,192,485  $ 67,684,111  $ 5,125,570   $ 4,393,475 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  American
  Century VP 
  Ultra Class II 
  Division
             2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ (617,522)  $ (796,049) 
   Total realized gains (losses) on investments  (4,150,471)  7,161,269 
   Change in net unrealized appreciation or depreciation of investments  19,391,959  (36,896,658) 
   Net gains (lossses) from investments  14,623,966  (30,531,438) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  14,623,966    (30,531,438) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  4,811,592    29,056,644 
   Administration charges  (406,928)    (382,862) 
   Contingent sales charges  (54,064)    (73,852) 
   Contract terminations  (1,405,462)    (1,672,856) 
   Death benefit payments  (246,233)    (99,348) 
   Flexible withdrawal option payments  (924,179)    (847,116) 
   Transfer payments to other contracts  (9,019,277)    (9,146,358) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  (7,244,551)    16,834,252 
Total increase (decrease)  7,379,415    (13,697,186) 
 
Net assets at beginning of period  48,691,721    62,388,907 
Net assets at end of period  $ 56,071,136  $ 48,691,721 
 
 
See accompanying notes.       


American  American    
Century VP  Century VP Asset
Value Class II  Vista Class I  Allocation 
Division Division Division
2009  2008  2009  2008             2009  2008 
 
 
$ 969,114   $ 322,152  $ (28,227)   $ (39,717)  $ 784,365   $ 1,115,665 
(3,206,329)  2,059,896  (230,776)  54,071  (2,124,367)  5,545,976 
6,029,843  (13,783,171)  625,969  (1,743,999)  8,962,274  (26,722,216) 
3,792,628  (11,401,123)  366,966  (1,729,645)  7,622,272  (20,060,575) 
 
–  –  –  –  –  – 
 
3,792,628  (11,401,123)  366,966  (1,729,645)  7,622,272  (20,060,575) 
 
 
 
2,251,924  3,386,467  367,636  1,272,811  7,596,204  8,945,708 
(6,597)  (8,333)  (676)  (323)  (76,439)  (65,967) 
(28,544)  (36,041)  (3,306)  (3,034)  (63,498)  (120,045) 
(2,027,589)  (2,515,067)  (85,936)  (68,715)  (4,262,157)  (7,695,514) 
(108,521)  (99,144)  –  (1,397)  (445,812)  (555,322) 
(300,913)  (399,073)  (13,556)  (14,870)  (1,059,829)  (1,733,913) 
(3,620,668)  (7,351,537)  (303,755)  (558,995)  (6,959,658)  (13,257,863) 
–  –  –  –  –  – 
(3,840,908)  (7,022,728)  (39,593)  625,477  (5,271,189)  (14,482,916) 
(48,280)  (18,423,851)  327,373  (1,104,168)  2,351,083  (34,543,491) 
 
25,960,083  44,383,934  1,891,753  2,995,921  50,513,490  85,056,981 
$ 25,911,803   $ 25,960,083  $ 2,219,126 $  1,891,753  $ 52,864,573   $ 50,513,490 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Balanced
  Division
             2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ 1,512,312  $ 1,515,229 
   Total realized gains (losses) on investments  (3,562,620)  1,778,761 
   Change in net unrealized appreciation or depreciation of investments  9,317,827  (27,010,040) 
   Net gains (lossses) from investments  7,267,519  (23,716,050) 
 
   Payment from Affiliate  –  – 
 
Net increase (decrease) in net assets resulting from operations  7,267,519  (23,716,050) 
 
Changes from principal transactions:   
   Purchase payments, less sales charges, per payment fees   
and applicable premium taxes  3,008,849  3,240,476 
   Administration charges  (24,230)  (28,703) 
   Contingent sales charges  (60,865)  (118,717) 
   Contract terminations  (5,096,297)  (9,741,919) 
   Death benefit payments  (419,374)  (789,860) 
   Flexible withdrawal option payments  (892,954)  (1,549,753) 
   Transfer payments to other contracts  (4,705,157)  (8,277,684) 
   Annuity payments  –  – 
Increase (decrease) in net assets from principal transactions  (8,190,028)  (17,266,160) 
Total increase (decrease)  (922,509)  (40,982,210) 
 
Net assets at beginning of period  44,974,598  85,956,808 
Net assets at end of period  $ 44,052,089  $ 44,974,598 
 
 
(1) Represented the operations of West Coast Equity Division until November 23, 2009 name change. 
 
 
 
See accompanying notes.       


Bond &           
Mortgage  Capital Diversified 
Securities  Appreciation  International 
Division  Division (1) Division 
           2009  2008             2009  2008             2009  2008 
 
 
$ 23,605,608   $ 14,844,677  $ 9,333  $ (6,100)  $ 5,922,863   $ 1,031,949 
(10,699,786)  (10,378,357)  (229,646)  96,512  (13,975,971)  56,494,954 
27,589,155  (65,321,558)  1,068,023  (936,758)  44,023,516  (200,607,999) 
40,494,977  (60,855,238)  847,710  (846,346)  35,970,408  (143,081,096) 
 
–  –  –  –  1,400,614  – 
 
40,494,977  (60,855,238)  847,710  (846,346)  37,371,022  (143,081,096) 
 
 
 
40,475,504  56,435,336  2,422,377  1,942,160  27,906,687  40,686,774 
(631,491)  (607,377)  (753)  (254)  (135,344)  (138,567) 
(319,042)  (438,051)  (10,329)  (740)  (195,065)  (322,721) 
(18,561,331)  (26,067,288)  (268,506)  (16,751)  (13,396,263)  (22,311,832) 
(1,253,313)  (1,927,338)  (100)  –  (682,131)  (1,046,118) 
(4,865,974)  (6,537,538)  (12,075)  (34,219)  (1,774,997)  (2,867,820) 
(42,550,343)  (80,071,614)  (388,291)  (396,687)  (23,879,337)  (45,077,767) 
–  –  –  –  –  – 
(27,705,990)  (59,213,870)  1,742,323  1,493,509  (12,156,450)  (31,078,051) 
12,788,987  (120,069,108)  2,590,033  647,163  25,214,572  (174,159,147) 
 
238,616,478  358,685,586  2,080,302  1,433,139  151,538,724  325,697,871 
$ 251,405,465   $ 238,616,478  $ 4,670,335  $ 2,080,302  $ 176,753,296   $ 151,538,724 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Dreyfus IP
  Technology Growth 
  Service Shares 
  Division
             2009  2008 
Increase (decrease) in net assets from   
Operations:   
   Net investment income (loss)  $ (16,045)  $ (14,558) 
   Total realized gains (losses) on investments  (79,610)  (69,725) 
   Change in net unrealized appreciation or depreciation of investments  612,753    (450,798) 
   Net gains (lossses) from investments  517,098    (535,081) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  517,098    (535,081) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  1,961,773    558,140 
   Administration charges  (152)    (102) 
   Contingent sales charges  (1,997)    (1,924) 
   Contract terminations  (51,910)    (43,580) 
   Death benefit payments  –    – 
   Flexible withdrawal option payments  (19,668)    (8,187) 
   Transfer payments to other contracts  (689,693)    (277,832) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  1,198,353    226,515 
Total increase (decrease)  1,715,451    (308,566) 
 
Net assets at beginning of period  709,523    1,018,089 
Net assets at end of period  $ 2,424,974  $ 709,523 
 
 
 
 
See accompanying notes.       


Fidelity VIP  Fidelity VIP 
Equity-Income  Growth
Equity Service Service
Income Class 2 Class
Division Division Division

           2009

    2008             2009  2008             2009  2008 
 
 
$ 6,450,341  $ 2,079,028  $ 246,613  $ 414,328  $ (172,704)   $ (204,157) 
(12,322,227)  4,923,465  (4,148,510)  (3,327,054)  (2,250,333)  (1,097,052) 
31,929,448  (82,471,273)  13,727,220  (29,685,097)  6,257,651  (15,328,472) 
26,057,562  (75,468,780)  9,825,323  (32,597,823)  3,834,614  (16,629,681) 
 
–  –  –  –  –  – 
 
26,057,562  (75,468,780)  9,825,323  (32,597,823)  3,834,614  (16,629,681) 
 
 
 
24,940,303  61,022,256  5,816,809  8,354,230  2,055,052  3,646,198 
(921,639)  (883,089)  (9,988)  (11,959)  (4,184)  (9,946) 
(164,248)  (258,290)  (42,835)  (84,742)  (26,299)  (42,105) 
(6,022,332)  (8,930,508)  (2,646,592)  (4,715,453)  (1,868,100)  (2,938,177) 
(858,200)  (522,676)  (158,526)  (138,892)  (57,398)  (225,190) 
(2,693,097)  (3,043,025)  (424,975)  (721,551)  (175,207)  (316,741) 
(20,643,016)  (38,443,998)  (6,006,640)  (11,676,408)  (2,665,191)  (5,142,748) 
–  –  –  –  –  – 
(6,362,229)  8,940,670  (3,472,747)  (8,994,775)  (2,741,327)  (5,028,709) 
19,695,333  (66,528,110)  6,352,576  (41,592,598)  1,093,287  (21,658,390) 
 
142,948,606  209,476,716  38,384,493  79,977,091  16,640,452  38,298,842 
$ 162,643,939  $ 142,948,606  $ 44,737,069  $ 38,384,493  $ 17,733,739 $  16,640,452 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Fidelity VIP 
  Growth
  Service
  Class 2
  Division
             2009    2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ (67,930)  $ (65,366) 
   Total realized gains (losses) on investments  (406,451)    (99,848) 
   Change in net unrealized appreciation or depreciation of investments  1,755,226    (4,515,123) 
   Net gains (lossses) from investments  1,280,845    (4,680,337) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  1,280,845    (4,680,337) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  787,271    2,652,240 
   Administration charges  (728)    (1,027) 
   Contingent sales charges  (9,697)    (10,142) 
   Contract terminations  (252,078)    (229,740) 
   Death benefit payments  (51,568)    (16,770) 
   Flexible withdrawal option payments  (15,040)    (18,895) 
   Transfer payments to other contracts  (542,695)    (1,523,972) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  (84,535)    851,694 
Total increase (decrease)  1,196,310    (3,828,643) 
 
Net assets at beginning of period  5,241,959    9,070,602 
Net assets at end of period  $ 6,438,269  $ 5,241,959 
 
 
See accompanying notes.       


Fidelity VIP  Fidelity VIP II  Fidelity VIP II 
Overseas Contrafund  Contrafund 
Service Service Service
Class 2 Class Class 2
Division Division Division
2009  2008  2009  2008  2009  2008 
 
 
$ 224,314   $ 616,094  $ (58,306)   $ (539,369)  $ (37,040)   $ (200,456) 
(3,702,872)  4,276,664  (5,878,582)  (1,422,146)  (3,922,022)  (1,455,069) 
12,911,110  (31,632,732)  22,943,510  (47,719,745)  13,888,919  (19,365,539) 
9,432,552  (26,739,974)  17,006,622  (49,681,260)  9,929,857  (21,021,064) 
 
–  –  –  –  –  – 
 
9,432,552  (26,739,974)  17,006,622  (49,681,260)  9,929,857  (21,021,064) 
 
 
 
8,913,658  20,490,181  9,189,048  12,121,187  13,945,048  18,471,732 
(213,855)  (197,710)  (23,142)  (28,969)  (126,956)  (105,448) 
(48,344)  (63,906)  (90,727)  (136,894)  (40,831)  (55,997) 
(1,256,750)  (1,447,555)  (6,444,754)  (9,552,807)  (1,061,440)  (1,268,410) 
(250,244)  (87,893)  (291,957)  (203,363)  (53,723)  (188,212) 
(553,958)  (583,536)  (852,097)  (1,407,643)  (418,219)  (542,500) 
(7,206,063)  (7,347,509)  (10,133,864)  (19,783,201)  (9,543,718)  (9,303,596) 
–  –  –  –  –  – 
(615,556)  10,762,072  (8,647,493)  (18,991,690)  2,700,161  7,007,569 
8,816,996  (15,977,902)  8,359,129  (68,672,950)  12,630,018  (14,013,495) 
 
37,380,417  53,358,319  57,669,223  126,342,173  28,737,378  42,750,873 
$ 46,197,413 $  37,380,417  $ 66,028,352 $  57,669,223  $ 41,367,396 $  28,737,378 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Fidelity VIP III 
  Mid Cap
  Service
  Class 2
  Division
             2009    2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ (53,524)  $ (80,056) 
   Total realized gains (losses) on investments  (695,464)    730,879 
   Change in net unrealized appreciation or depreciation of investments  2,625,370    (4,048,458) 
   Net gains (lossses) from investments  1,876,382    (3,397,635) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  1,876,382    (3,397,635) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  2,791,365    2,836,284 
   Administration charges  (1,225)    (871) 
   Contingent sales charges  (6,736)    (11,622) 
   Contract terminations  (175,119)    (263,243) 
   Death benefit payments  (4,269)    (1,143) 
   Flexible withdrawal option payments  (53,986)    (79,142) 
   Transfer payments to other contracts  (2,015,920)    (1,461,252) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  534,110    1,019,011 
Total increase (decrease)  2,410,492    (2,378,624) 
 
Net assets at beginning of period  5,160,787    7,539,411 
Net assets at end of period  $ 7,571,279  $ 5,160,787 
 
 
See accompanying notes.       


Goldman Sachs
Goldman Sachs  VIT Structured  Government 
VIT Mid Cap  Small Cap & High   
Value Service  Equity Service  Quality   
Class I Class I Bond   
Division Division Division   
           2009     2008  2009  2008             2009       2008 
 
 
$ 60,019  $ (64,148)  $ (3,847) $  (30,492)  $ 10,515,508  $ 9,531,707 
(1,324,415)    (940,819)  (506,526)  (266,681)  (3,911,795)    (2,283,708) 
4,974,063    (7,016,663)  1,344,984  (1,452,822)  1,430,068    (15,720,378) 
3,709,667    (8,021,630)  834,611  (1,749,995)  8,033,781    (8,472,379) 
 
–    –  –  –  –    – 
 
3,709,667    (8,021,630)  834,611  (1,749,995)  8,033,781    (8,472,379) 
 
 
 
1,518,621    4,577,107  1,035,644  1,184,594  48,967,188    79,089,815 
(2,093)    (1,847)  (240)  (162)  (259,983)    (229,848) 
(20,853)    (36,967)  (4,419)  (6,936)  (356,748)    (427,591) 
(542,100)    (837,345)  (114,889)  (157,120)  (22,658,992)    (28,347,401) 
(90,249)    (105,265)  (28,786)  (5,869)  (1,856,753)    (1,750,298) 
(105,440)    (164,601)  (30,460)  (40,487)  (5,647,970)    (7,129,878) 
(1,500,777)    (2,663,267)  (587,474)  (540,408)  (54,153,629)    (72,927,998) 
–    –  –  –  –    – 
(742,891)    767,815  269,376  433,612  (35,966,887)    (31,723,199) 
2,966,776    (7,253,815)  1,103,987  (1,316,383)  (27,933,106)    (40,195,578) 
 
12,939,322    20,193,137  3,309,548  4,625,931  237,196,678    277,392,256 
$ 15,906,098  $ 12,939,322  $ 4,413,535 $  3,309,548  $ 209,263,572  $ 237,196,678 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  International 
  Emerging 
  Markets 
  Division 
  2009  2008 
Increase (decrease) in net assets from     
Operations:     
   Net investment income (loss)  $ 530,481  $ (372,495) 
   Total realized gains (losses) on investments  (7,529,278)  37,277,375 
   Change in net unrealized appreciation or depreciation of investments  46,845,737  (121,845,736) 
   Net gains (lossses) from investments  39,846,940  (84,940,856) 
 
   Payment from Affiliate  227,485  – 
 
Net increase (decrease) in net assets resulting from operations  40,074,425  (84,940,856) 
 
Changes from principal transactions:     
   Purchase payments, less sales charges, per payment fees     
         and applicable premium taxes  26,921,227  31,734,390 
   Administration charges  (34,533)  (36,086) 
   Contingent sales charges  (108,918)  (158,999) 
   Contract terminations  (6,250,338)  (8,406,299) 
   Death benefit payments  (245,306)  (335,750) 
   Flexible withdrawal option payments  (681,082)  (971,879) 
   Transfer payments to other contracts  (18,603,895)  (38,127,192) 
   Annuity payments  –  – 
Increase (decrease) in net assets from principal transactions  997,155  (16,301,815) 
Total increase (decrease)  41,071,580  (101,242,671) 
 
Net assets at beginning of period  62,434,726  163,677,397 
Net assets at end of period  $ 103,506,306  $ 62,434,726 
 
 
(1) Represented the operations of Janus Aspen Mid Cap Growth Service Shares Division until May 18, 2009 
       name change.     
 
 
See accompanying notes.     


Janus Aspen
International  Enterprise  LargeCap 
SmallCap  Service Shares  Blend II 
Division Division (1)  Division 
           2009    2008             2009  2008             2009             2008 
 
 
$ 927,235  $ 615,925  $ (151,366) $ (238,773)  $ 627,062  $ (63,226) 
(7,484,608)    15,902,116  (266,512)  1,771,009  (18,529,982)  72,953,572 
22,460,079    (78,701,482)  4,221,108  (10,470,032)  53,189,814  (156,185,338) 
15,902,706    (62,183,441)  3,803,230  (8,937,796)  35,286,894  (83,294,992) 
 
332,409    –  –  –  –  – 
 
16,235,115    (62,183,441)  3,803,230  (8,937,796)  35,286,894  (83,294,992) 
 
 
 
9,288,191    14,016,317  2,939,018  2,308,745  15,531,306  41,924,239 
(21,908)    (29,611)  (4,600)  (7,100)  (494,973)  (468,016) 
(86,336)    (138,546)  (20,597)  (25,647)  (160,666)  (235,408) 
(5,029,921)    (8,145,534)  (1,463,064)  (1,789,711)  (6,903,254)  (9,869,226) 
(268,162)    (408,857)  (33,604)  (41,151)  (549,741)  (554,073) 
(545,485)    (964,948)  (103,710)  (193,769)  (2,070,360)  (2,557,424) 
(9,902,292)    (21,093,388)  (2,644,969)  (3,849,010)  (20,208,857)  (32,366,363) 
–    –  –  –  –  – 
(6,565,913)    (16,764,567)  (1,331,526)  (3,597,643)  (14,856,545)  (4,126,271) 
9,669,202    (78,948,008)  2,471,704  (12,535,439)  20,430,349  (87,421,263) 
 
54,644,546    133,592,554  9,983,596  22,519,035  138,622,834  226,044,097 
$ 64,313,748  $ 54,644,546  $ 12,455,300   $ 9,983,596  $ 159,053,183  $ 138,622,834 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  LargeCap 
  Growth
  Division
             2009       2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ (249,736)  $ (593,147) 
   Total realized gains (losses) on investments  (4,338,986)    (1,777,113) 
   Change in net unrealized appreciation or depreciation of investments  16,423,590    (40,078,823) 
   Net gains (lossses) from investments  11,834,868    (42,449,083) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  11,834,868    (42,449,083) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
    and applicable premium taxes  10,816,058    12,349,924 
   Administration charges  (30,632)    (27,239) 
   Contingent sales charges  (68,840)    (141,832) 
   Contract terminations  (5,744,258)    (11,686,832) 
   Death benefit payments  (283,667)    (487,543) 
   Flexible withdrawal option payments  (862,829)    (1,389,229) 
   Transfer payments to other contracts  (6,468,722)    (10,596,351) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  (2,642,890)    (11,979,102) 
Total increase (decrease)  9,191,978    (54,428,185) 
 
Net assets at beginning of period  49,772,328    104,200,513 
Net assets at end of period  $ 58,964,306  $ 49,772,328 

See accompanying notes. 


LargeCap  LargeCap  LargeCap 
Growth I  S&P 500 Index  Value
Division Division Division
           2009  2008             2009       2008             2009    2008 
 
 
$ (1,315,070)   $ (1,646,067)  $ 2,638,665  $ 1,244,747  $ 3,407,443  $ 1,574,951 
(5,247,795)  (2,635,400)  (5,206,106)    2,917,918  (11,114,027)    12,349,025 
47,815,801  (64,763,074)  21,526,447    (58,021,735)  20,128,881    (75,472,610) 
41,252,936  (69,044,541)  18,959,006    (53,859,070)  12,422,297    (61,548,634) 
 
–  –  –    –  –    – 
 
41,252,936  (69,044,541)  18,959,006    (53,859,070)  12,422,297    (61,548,634) 
 
 
 
14,510,734  9,779,265  20,108,044    19,935,434  11,026,669    12,575,035 
(55,033)  (46,551)  (75,090)    (65,769)  (81,254)    (88,427) 
(148,786)  (236,325)  (103,986)    (161,617)  (96,595)    (229,260) 
(10,502,632)  (16,127,674)  (7,299,942)    (11,991,244)  (9,080,750)    (20,571,144) 
(388,950)  (781,435)  (301,693)    (483,690)  (476,724)    (994,192) 
(1,262,028)  (2,019,662)  (1,185,059)    (1,867,387)  (1,492,304)    (2,493,490) 
(14,443,115)  (16,630,080)  (16,218,037)    (23,436,342)  (10,343,707)    (23,120,543) 
–  –  –    –  (12,850)    (24,168) 
(12,289,810)  (26,062,462)  (5,075,763)    (18,070,615)  (10,557,515)    (34,946,189) 
28,963,126  (95,107,003)  13,883,243    (71,929,685)  1,864,782    (96,494,823) 
 
89,909,691  185,016,694  82,147,796    154,077,481  97,288,236    193,783,059 
$ 118,872,817   $ 89,909,691  $ 96,031,039  $ 82,147,796  $ 99,153,018  $ 97,288,236 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  LargeCap 
  Value III
  Division
             2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 2,614,336  $ 1,408,032 
   Total realized gains (losses) on investments  (10,525,317)    3,511,355 
   Change in net unrealized appreciation or depreciation of investments  28,295,999    (85,454,359) 
   Net gains (lossses) from investments  20,385,018    (80,534,972) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  20,385,018    (80,534,972) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
    and applicable premium taxes  18,684,348    41,916,328 
   Administration charges  (432,107)    (399,607) 
   Contingent sales charges  (132,166)    (187,556) 
   Contract terminations  (5,630,936)    (7,805,174) 
   Death benefit payments  (662,047)    (500,918) 
   Flexible withdrawal option payments  (1,674,043)    (2,144,166) 
   Transfer payments to other contracts  (15,358,813)    (28,036,940) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  (5,205,764)    2,841,967 
Total increase (decrease)  15,179,254    (77,693,005) 
 
Net assets at beginning of period  113,000,951    190,693,956 
Net assets at end of period  $ 128,180,205  $ 113,000,951 
 
 
(1) Commenced operations May 18, 2009.       

See accompanying notes. 


MFS VIT  MFS VIT         
Utilities  Value  MidCap  MidCap
Service Class  Service Class  Blend Growth I 
Division (1)  Division (1)  Division  Division
2009  2009  2009  2008  2009  2008 
 
 
$ (1,958)  $ (1,318)  $ (1,023,661)   $ (2,204,219)  $ (377,224)   $ (611,243) 
1,718  322  (2,729,529)  33,993,276  (2,806,560)  5,343,125 
34,374  16,481  64,122,590  (151,699,449)  11,912,152  (27,761,953) 
34,134  15,485  60,369,400  (119,910,392)  8,728,368  (23,030,071) 
 
–  –  –  –  –  – 
 
34,134  15,485  60,369,400  (119,910,392)  8,728,368  (23,030,071) 
 
 
 
567,866  453,116  26,474,039  39,754,579  5,142,087  5,413,498 
(14)  –  (379,083)  (362,939)  (7,793)  (9,569) 
(195)  –  (279,436)  (472,723)  (40,659)  (63,925) 
(5,068)  –  (18,592,252)  (30,601,185)  (2,822,573)  (4,008,344) 
–  –  (1,162,401)  (1,660,461)  (134,800)  (111,438) 
(860)  (1,110)  (3,113,784)  (4,461,809)  (342,298)  (550,898) 
(2,363)  (217)  (29,620,513)  (50,717,607)  (4,656,105)  (8,527,427) 
–  –  –  –  –  – 
559,366  451,789  (26,673,430)  (48,522,145)  (2,862,141)  (7,858,103) 
593,500  467,274  33,695,970  (168,432,537)  5,866,227  (30,888,174) 
 
–  –  211,731,427  380,163,964  29,095,695  59,983,869 
$ 593,500  $ 467,274  $ 245,427,397   $ 211,731,427  $ 34,961,922   $ 29,095,695 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  MidCap
  Value II
  Division
             2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 359,909  $ (495,075) 
   Total realized gains (losses) on investments  (11,779,397)    3,847,721 
   Change in net unrealized appreciation or depreciation of investments  32,002,481    (56,328,898) 
   Net gains (lossses) from investments  20,582,993    (52,976,252) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  20,582,993    (52,976,252) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  12,886,353    23,795,371 
   Administration charges  (228,189)    (215,911) 
   Contingent sales charges  (82,747)    (122,965) 
   Contract terminations  (4,707,175)    (6,841,705) 
   Death benefit payments  (234,362)    (294,491) 
   Flexible withdrawal option payments  (1,019,315)    (1,365,327) 
   Transfer payments to other contracts  (15,563,033)    (20,517,614) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  (8,948,468)    (5,562,642) 
Total increase (decrease)  11,634,525    (58,538,894) 
 
Net assets at beginning of period  66,669,765    125,208,659 
Net assets at end of period  $ 78,304,290  $ 66,669,765 
 
 
(1) Commenced operations November 24, 2008.       
 
 
 
See accompanying notes.       


          Neuberger
          Berman AMT 
Money  Mortgage Partners
Market  Securities I Class
Division  Division (1) Divison
2009  2008  2009  2008             2009  2008 
 
 
$ (2,303,892) $  2,064,023  $ 536,155  $ (824)  $ 51,782  $ (50,118) 
–  –  (13,468)    9  (678,472)    700,771 
–  –  (256,747)    (731)  2,281,197    (4,538,126) 
(2,303,892)  2,064,023  265,940    (1,546)  1,654,507    (3,887,473) 
 
–  –  –    –  –    – 
 
(2,303,892)  2,064,023  265,940    (1,546)  1,654,507    (3,887,473) 
 
 
 
140,034,568  276,562,170  15,692,079    261,967  1,866,255    1,553,847 
(126,906)  (115,347)  (21,741)    (39)  (2,685)    (2,921) 
(839,531)  (902,943)  (11,623)    –  (10,700)    (7,281) 
(53,581,426)  (58,633,656)  (578,245)    –  (278,158)    (164,914) 
(1,224,123)  (1,122,430)  –    –  (13,454)    (6,659) 
(6,391,469)  (4,665,357)  (95,361)    –  (58,279)    (98,604) 
(155,305,962)  (100,477,626)  (2,998,840)    (1,464)  (1,453,347)    (879,941) 
–  –  –    –  –    – 
(77,434,849)  110,644,811  11,986,269    260,464  49,632    393,527 
(79,738,741)  112,708,834  12,252,209    258,918  1,704,139    (3,493,946) 
 
244,387,527  131,678,693  258,918    –  3,659,649    7,153,595 
$ 164,648,786   $ 244,387,527  $ 12,511,127  $ 258,918  $ 5,363,788  $ 3,659,649 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Neuberger
  Berman AMT 
  Small-Cap Growth 
  S Class
  Divison
  2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ (31,528)  $ (41,363) 
   Total realized gains (losses) on investments  (182,188)    (463) 
   Change in net unrealized appreciation or depreciation of investments  656,221    (1,283,991) 
   Net gains (lossses) from investments  442,505    (1,325,817) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  442,505    (1,325,817) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  743,271    722,988 
   Administration charges  (1,993)    (238) 
   Contingent sales charges  (3,107)    (4,447) 
   Contract terminations  (80,767)    (100,733) 
   Death benefit payments  (25,615)    (1,755) 
   Flexible withdrawal option payments  (6,871)    (10,108) 
   Transfer payments to other contracts  (248,380)    (429,076) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  376,538    176,631 
Total increase (decrease)  819,043    (1,149,186) 
 
Net assets at beginning of period  1,961,402    3,110,588 
Net assets at end of period  $ 2,780,445  $ 1,961,402 
 
 
(1) Commenced operations May 18, 2009.       

See accompanying notes. 


Neuberger        
Berman AMT  PIMCO  PIMCO  Principal
Socially All Asset  Total Return  LifeTime
Responsive Administrative  Administrative  Strategic
I Class Class  Class  Income
Divison Division (1)  Division (1)  Division
2009  2008  2009  2009  2009  2008 
 
 
$ 39,387   $ 41,229  $ 21,818  $ 23,995  $ 707,519   $ 537,710 
(486,365)  289,528  383  115,495  (961,835)  (183,762) 
1,485,733  (2,407,338)  (4,995)  (94,655)  3,352,920  (6,107,588) 
1,038,755  (2,076,581)  17,206  44,835  3,098,604  (5,753,640) 
 
–  –  –  –  –  – 
 
1,038,755  (2,076,581)  17,206  44,835  3,098,604  (5,753,640) 
 
 
 
2,069,639  1,689,764  526,311  4,352,008  7,079,955  7,623,247 
(22,192)  (16,466)  –  (431)  (74,647)  (58,670) 
(2,931)  (5,904)  (21)  (943)  (37,285)  (29,695) 
(76,199)  (133,744)  (549)  (24,524)  (1,369,806)  (813,091) 
(12,311)  (48,913)  –  –  (56,790)  (114,089) 
(53,576)  (82,161)  (2,012)  (7,406)  (679,028)  (635,407) 
(1,171,851)  (460,078)  (22,427)  (90,624)  (2,991,096)  (4,555,812) 
–  –  –  –  –  – 
730,579  942,498  501,302  4,228,080  1,871,303  1,416,483 
1,769,334  (1,134,083)  518,508  4,272,915  4,969,907  (4,337,157) 
 
3,554,792  4,688,875  –  –  16,445,515  20,782,672 
$ 5,324,126   $ 3,554,792  $ 518,508  $ 4,272,915  $ 21,415,422   $ 16,445,515 


Principal Life Insurance Company 
Separate Account B 
                         Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Principal
  LifeTime
  2010
  Division
             2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 957,606  $ 1,218,043 
   Total realized gains (losses) on investments  (2,170,048)    1,005,012 
   Change in net unrealized appreciation or depreciation of investments  8,075,389    (16,944,125) 
   Net gains (lossses) from investments  6,862,947    (14,721,070) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  6,862,947    (14,721,070) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  6,483,192    12,129,287 
   Administration charges  (176,812)    (179,795) 
   Contingent sales charges  (41,009)    (95,191) 
   Contract terminations  (1,276,749)    (2,458,641) 
   Death benefit payments  (138,742)    (282,462) 
   Flexible withdrawal option payments  (602,008)    (697,099) 
   Transfer payments to other contracts  (3,426,459)    (6,838,217) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  821,413    1,577,882 
Total increase (decrease)  7,684,360    (13,143,188) 
 
Net assets at beginning of period  30,145,370    43,288,558 
Net assets at end of period  $ 37,829,730  $ 30,145,370 
 
 
See accompanying notes.       


Principal Principal Principal
LifeTime  LifeTime  LifeTime
2020 2030 2040
Division    Division Division
           2009    2008             2009  2008  2009  2008 
 
 
$ 2,805,156  $ 4,614,933  $ 153,699  $ 593,909  $ 95,589 $  247,435 
(6,294,996)    8,497,842  (1,423,054)    1,058,183  (807,702)  482,056 
35,355,976    (78,452,695)  9,452,110    (11,164,961)  2,436,867  (5,355,646) 
31,866,136    (65,339,920)  8,182,755    (9,512,869)  1,724,754  (4,626,155) 
 
–    –  –    –  –  – 
 
31,866,136    (65,339,920)  8,182,755    (9,512,869)  1,724,754  (4,626,155) 
 
 
 
25,585,481    41,444,400  28,666,861    10,001,609  776,432  2,507,872 
(976,324)    (903,503)  (131,539)    (13,575)  (6,005)  (5,052) 
(127,952)    (168,733)  (31,211)    (47,233)  (19,433)  (21,493) 
(3,745,649)    (4,360,563)  (1,083,295)    (1,320,744)  (569,704)  (581,892) 
(126,371)    (822,838)  (236,074)    (506,580)  (7,779)  (1,324) 
(1,574,066)    (1,761,631)  (135,640)    (121,952)  (37,684)  (46,780) 
(9,905,324)    (21,843,432)  (2,974,993)    (3,825,710)  (815,493)  (1,210,091) 
–    –  –    –  –  – 
9,129,795    11,583,700  24,074,109    4,165,815  (679,666)  641,240 
40,995,931    (53,756,220)  32,256,864    (5,347,054)  1,045,088  (3,984,915) 
 
119,535,510    173,291,730  18,995,171    24,342,225  7,121,773  11,106,688 
$ 160,531,441  $ 119,535,510  $ 51,252,035  $ 18,995,171  $ 8,166,861   $ 7,121,773 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Principal
  LifeTime
  2050
  Division
  2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 39,632  $ 139,722 
   Total realized gains (losses) on investments  (374,623)    231,864 
   Change in net unrealized appreciation or depreciation of investments  1,361,523    (2,949,512) 
   Net gains (lossses) from investments  1,026,532    (2,577,926) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  1,026,532    (2,577,926) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
    and applicable premium taxes  825,814    1,532,331 
   Administration charges  (4,062)    (3,264) 
   Contingent sales charges  (10,620)    (12,484) 
   Contract terminations  (301,320)    (283,055) 
   Death benefit payments  (16,907)    – 
   Flexible withdrawal option payments  (7,062)    (16,744) 
   Transfer payments to other contracts  (350,586)    (742,245) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  135,257    474,539 
Total increase (decrease)  1,161,789    (2,103,387) 
 
Net assets at beginning of period  3,856,422    5,959,809 
Net assets at end of period  $ 5,018,211  $ 3,856,422 
 
 
See accompanying notes.       


          SAM
    SAM Conservative 
Real Estate  Balanced  Balanced 
Securities  Portfolio  Portfolio
Division Division Division
2009  2008             2009  2008  2009  2008 
 
 
$ 1,626,108   $ 907,186  $ 9,286,184  $ 3,354,668  $ 1,776,281   $ 670,290 
(9,695,036)  29,751,170  8,364,614    14,546,851  (499,621)  800,314 
23,372,325  (65,216,125)  70,590,554    (67,929,605)  18,357,269  (10,578,080) 
15,303,397  (34,557,769)  88,241,352    (50,028,086)  19,633,929  (9,107,476) 
 
–  –  –    –  –  – 
 
15,303,397  (34,557,769)  88,241,352    (50,028,086)  19,633,929  (9,107,476) 
 
 
 
10,938,745  16,896,419  300,122,353    265,171,493  79,447,152  73,655,354 
(23,572)  (29,928)  (2,566,950)    (899,960)  (526,866)  (151,726) 
(85,282)  (141,678)  (316,041)    (66,255)  (70,890)  (44,887) 
(5,056,623)  (8,396,734)  (10,193,525)    (2,159,017)  (2,830,493)  (1,279,391) 
(233,554)  (293,005)  (989,664)    (440,131)  (708,418)  (40,961) 
(769,249)  (1,277,565)  (3,735,981)    (1,682,240)  (1,547,890)  (687,709) 
(11,856,556)  (25,058,425)  (22,535,030)    (15,883,543)  (14,892,253)  (10,859,658) 
–  –  –    –  –  – 
(7,086,091)  (18,300,916)  259,785,162    244,040,347  58,870,342  60,591,022 
8,217,306  (52,858,685)  348,026,514    194,012,261  78,504,271  51,483,546 
 
64,056,602  116,915,287  229,326,889    35,314,628  60,144,292  8,660,746 
$ 72,273,908   $ 64,056,602  $ 577,353,403  $ 229,326,889  $ 138,648,563 $ 60,144,292 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  SAM
  Conservative 
  Growth
  Portfolio
  Division
             2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 1,159,295  $ 462,362 
   Total realized gains (losses) on investments  (571,701)    1,150,956 
   Change in net unrealized appreciation or depreciation of investments  7,205,836    (9,970,888) 
   Net gains (lossses) from investments  7,793,430    (8,357,570) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  7,793,430    (8,357,570) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  19,074,680    27,494,346 
   Administration charges  (10,488)    (5,644) 
   Contingent sales charges  (51,719)    (21,181) 
   Contract terminations  (1,684,947)    (684,818) 
   Death benefit payments  (56,840)    – 
   Flexible withdrawal option payments  (197,284)    (149,819) 
   Transfer payments to other contracts  (5,754,212)    (2,683,492) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  11,319,190    23,949,392 
Total increase (decrease)  19,112,620    15,591,822 
 
Net assets at beginning of period  22,493,595    6,901,773 
Net assets at end of period  $ 41,606,215  $ 22,493,595 
 
 
See accompanying notes.       


SAM SAM    
Flexible Strategic    
Income Growth Short-Term 
Portfolio Portfolio Bond
Division Division Division
2009  2008  2009  2008  2009  2008 
 
 
$ 3,054,285   $1,277,713  $ 534,685   $331,486  $ 5,707,030   $4,875,746 
(1,515,430)  1,526,798  (1,869,905)  1,298,155  (3,154,917)  (3,548,152) 
15,170,884  (8,573,985)  7,394,328  (8,719,757)  6,749,994  (20,527,201) 
16,709,739  (5,769,474)  6,059,108  (7,090,116)  9,302,107  (19,199,607) 
 
–  –  –  –  –  – 
 
16,709,739  (5,769,474)  6,059,108  (7,090,116)  9,302,107  (19,199,607) 
 
 
 
79,992,452  86,506,079  12,997,019  20,627,592  32,466,887  44,820,832 
(424,123)  (113,308)  (8,327)  (4,508)  (605,318)  (581,830) 
(103,063)  (69,110)  (30,904)  (16,923)  (138,377)  (173,227) 
(4,188,488)  (2,500,034)  (1,030,461)  (655,741)  (5,467,219)  (6,752,698) 
(308,853)  (89,213)  (162,037)  (2,817)  (506,138)  (740,100) 
(1,977,476)  (868,517)  (154,185)  (97,306)  (2,905,195)  (3,513,885) 
(27,390,453)  (12,245,490)  (3,839,826)  (3,207,792)  (20,760,844)  (52,508,378) 
–  –  –  –  –  – 
45,599,996  70,620,407  7,771,279  16,642,505  2,083,796  (19,449,286) 
62,309,735  64,850,933  13,830,387  9,552,389  11,385,903  (38,648,893) 
 
66,369,891  1,518,958  16,338,612  6,786,223  114,329,097  152,977,990 
$ 128,679,626   $ 66,369,891  $ 30,168,999   $ 16,338,612  $ 125,715,000   $ 114,329,097 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  Short-Term
  Income
  Division (1)
               2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ 732,443  $ (8,916) 
   Total realized gains (losses) on investments  36,022    7 
   Change in net unrealized appreciation or depreciation of investments  (27,169)    (157) 
   Net gains (lossses) from investments  741,296    (9,066) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  741,296    (9,066) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  27,914,538    274,679 
   Administration charges  (41,399)    (83) 
   Contingent sales charges  (14,072)    – 
   Contract terminations  (777,339)    – 
   Death benefit payments  (25,848)    – 
   Flexible withdrawal option payments  (171,549)    – 
   Transfer payments to other contracts  (4,335,776)    (4,211) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  22,548,555    270,385 
Total increase (decrease)  23,289,851    261,319 
 
Net assets at beginning of period  261,319    – 
Net assets at end of period  $ 23,551,170  $ 261,319 
 
 
(1) Commenced operations November 24, 2008.       

See accompanying notes. 


SmallCap  SmallCap  SmallCap 
Blend Growth II  Value I
Division Division Division
           2009  2008             2009  2008  2009  2008 
 
 
$ (187,424)   $ (450,823)  $ (334,253) $ (500,127)  $ 624,402   $ (441,567) 
(3,234,069)  4,391,590  (2,980,114)  (2,752,055)  (7,979,980)  7,515,885 
8,913,069  (25,781,767)  9,861,828  (15,384,937)  17,927,225  (44,840,466) 
5,491,576  (21,841,000)  6,547,461  (18,637,119)  10,571,647  (37,766,148) 
 
–  –  –  –  –  – 
 
5,491,576  (21,841,000)  6,547,461  (18,637,119)  10,571,647  (37,766,148) 
 
 
 
3,891,119  3,979,820  3,973,681  4,835,027  14,066,914  22,046,166 
(5,822)  (8,472)  (4,289)  (5,181)  (225,382)  (219,829) 
(40,202)  (67,080)  (33,592)  (56,468)  (92,958)  (143,628) 
(3,040,478)  (5,187,036)  (2,248,330)  (3,443,038)  (4,955,267)  (6,695,459) 
(101,640)  (135,513)  (156,453)  (79,952)  (290,611)  (286,298) 
(481,547)  (860,728)  (257,904)  (364,143)  (972,043)  (1,227,159) 
(4,385,188)  (8,590,660)  (3,200,018)  (6,050,797)  (12,096,755)  (24,391,324) 
–  –  –  –  –  – 
(4,163,758)  (10,869,669)  (1,926,905)  (5,164,552)  (4,566,102)  (10,917,531) 
1,327,818  (32,710,669)  4,620,556  (23,801,671)  6,005,545  (48,683,679) 
 
32,501,151  65,211,820  24,054,630  47,856,301  74,626,359  123,310,038 
$ 33,828,969   $ 32,501,151  $ 28,675,186   $ 24,054,630  $ 80,631,904   $ 74,626,359 


Principal Life Insurance Company
Separate Account B
Statements of Changes in Net Assets (continued) 
Years Ended December 31, 2009 and 2008, Except as Noted 

  T. Rowe Price
  Blue Chip
  Growth II
  Division
  2009  2008 
Increase (decrease) in net assets from       
Operations:       
   Net investment income (loss)  $ (36,101)  $ (22,984) 
   Total realized gains (losses) on investments  (113,736)    (79,654) 
   Change in net unrealized appreciation or depreciation of investments  1,079,077    (852,802) 
   Net gains (lossses) from investments  929,240    (955,440) 
 
   Payment from Affiliate  –    – 
 
Net increase (decrease) in net assets resulting from operations  929,240    (955,440) 
 
Changes from principal transactions:       
   Purchase payments, less sales charges, per payment fees       
and applicable premium taxes  4,043,942    838,742 
   Administration charges  (10,208)    (105) 
   Contingent sales charges  (3,884)    (3,801) 
   Contract terminations  (100,966)    (86,090) 
   Death benefit payments  (3,440)    – 
   Flexible withdrawal option payments  (19,803)    (9,109) 
   Transfer payments to other contracts  (1,111,322)    (378,209) 
   Annuity payments  –    – 
Increase (decrease) in net assets from principal transactions  2,794,319    361,428 
Total increase (decrease)  3,723,559    (594,012) 
 
Net assets at beginning of period  1,277,586    1,871,598 
Net assets at end of period  $ 5,001,145  $ 1,277,586 
 
 
(1) Commenced operations May 18, 2009.       
 
 
See accompanying notes.       


        Van Eck 
 Rowe Price  Templeton Worldwide 
Health                Growth Securities  Hard Assets 
Sciences II Class 2 Service Class 
Division Division Division (1) 
2009  2008  2009  2008  2009 
 
 
$ (57,301)   $ (54,798)  $ 25,874   $ 17,552  $ (3,425) 
(215,091)  (2,636)  (126,785)  76,480  19,535 
1,376,826  (1,302,312)  399,572  (1,102,357)  26,030 
1,104,434  (1,359,746)  298,661  (1,008,325)  42,140 
 
–  –  –  –  – 
 
1,104,434  (1,359,746)  298,661  (1,008,325)  42,140 
 
 
 
1,763,044  2,491,467  66,181  150,654  1,205,728 
(15,729)  (10,936)  –  –  (89) 
(5,252)  (6,238)  (566)  (1,072)  (478) 
(136,520)  (141,297)  (101,160)  (307,458)  (12,430) 
(1,801)  (19,809)  (1,386)  (20,805)  – 
(59,291)  (48,125)  (13,106)  (30,822)  – 
(1,516,653)  (1,026,645)  (91,497)  (287,074)  (153,406) 
–  –  –  –  – 
27,798  1,238,417  (141,534)  (496,577)  1,039,325 
1,132,232  (121,329)  157,127  (1,504,902)  1,081,465 
 
3,736,468  3,857,797  1,158,190  2,663,092  – 
$ 4,868,700  $ 3,736,468  $ 1,315,317  $ 1,158,190  $ 1,081,465 


Principal Life Insurance Company 
Separate Account B
Notes to Financial Statements 
December 31, 2009

1. Nature of Operations and Significant Accounting Policies 
 
 
Principal Life Insurance Company Separate Account B (Separate Account B) is a segregated 
investment account of Principal Life Insurance Company (Principal Life) and is registered under 
the Investment Company Act of 1940 as a unit investment trust, with no stated limitations on the 
number of authorized units. As directed by eligible contractholders, each division of Separate 
Account B invests exclusively in shares representing interests in a corresponding investment 
option. As of December 31, 2009, contractholder investment options include the following open- 
end management investment companies: 
 
                  Principal Variable Contracts Fund, Inc. (1) 
             Asset Allocation Account 
             Balanced Account 
             Bond & Mortgage Securities Account 
             Capital Appreciation Account (5, 10) 
             Diversified International Account 
             Equity Income Account (4) 
             Government & High Quality Bond Account 
             International Emerging Markets Account 
             International SmallCap Account 
             LargeCap Blend II Account 
             LargeCap Growth Account 
             LargeCap Growth I Account 
             LargeCap S&P 500 Index Account 
             LargeCap Value Account 
             LargeCap Value III Account 
             MidCap Blend Account 
             MidCap Growth I Account 
             MidCap Value II Account 
             Money Market Account 
             Mortgage Securities Account (7) 
             Principal LifeTime Strategic Income Account (2) 
             Principal LifeTime 2010 Account (2) 
             Principal LifeTime 2020 Account (2) 
             Principal LifeTime 2030 Account (2) 
             Principal LifeTime 2040 Account (2) 
             Principal LifeTime 2050 Account (2) 
             Real Estate Securities Account 
             Short-Term Bond Account 
             Short-Term Income Account (7) 
             SmallCap Blend Account 
             SmallCap Growth II Account 
             SmallCap Value I Account 
             Strategic Asset Management Portfolio – Balanced Portfolio Accounts (5) 
             Strategic Asset Management Portfolio – Conservative Balanced Portfolio Account (5) 
             Strategic Asset Management Portfolio – Conservative Growth Portfolio Account (5) 
             Strategic Asset Management Portfolio – Flexible Income Portfolio Account (5) 
             Strategic Asset Management Portfolio – Strategic Growth Portfolio Account (5) 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements 

1. Nature of Operations and Significant Accounting Policies (continued) 
 
         AIM V.I. Basic Value Fund – Series I (2) 
         AIM V.I. Capital Appreciation Fund – Series I (3) 
         AIM V.I. Core Equity Fund – Series I 
         AIM V.I. Dynamics Fund – Series I 
         AIM V.I. Global Health Care Fund – Series I 
         AIM V.I. International Growth Fund – Series I (6) 
         AIM V.I. Small Cap Equity Fund – Series I (2) 
         AIM V.I. Technology Fund – Series I 
         Alliance Bernstein VP Series Fund, Inc: 
             Small Cap Growth Portfolio – Class A (2) 
         American Century Variable Portfolios, Inc: 
             VP Income & Growth Fund – Class I 
             VP Inflation Protection Fund – Class II (2) 
             VP Ultra Fund – Class I 
             VP Ultra Fund – Class II (2) 
             VP Value Fund – Class II 
             VP Vista Fund – Class I (2) 
         Dreyfus Investment Portfolios: 
             Technology Growth Portfolio – Service Shares (2) 
         Fidelity Variable Insurance Products Fund: 
             Equity-Income Portfolio – SC2 
             Growth Portfolio – SC 
             Growth Portfolio – SC2 (2) 
             Overseas Portfolio – SC2 (2) 
         Fidelity Variable Insurance Products Fund II: 
             Contrafund Portfolio – SC 
             Contrafund Portfolio – SC2 (2) 
         Fidelity Variable Insurance Products Fund III: 
             Mid Cap Portfolio – SC2 (2) 
         Franklin Templeton VIP Trust: 
             Templeton Growth Securities Fund – Class 2 
         Goldman Sachs Variable Insurance Trust: 
             Mid Cap Value Fund – Service Class I (2) 
             Structured Small Cap Equity Fund – Service Class I (2) 
         Janus Aspen Series Enterprise Portfolio – Service Shares (9) 
         MFS VIT Utilities Service Class (8) 
         MFS VIT Value Service Class (8) 
         Neuberger Berman AMT Partners Portfolio – I Class (2) 
         Neuberger Berman AMT Small-Cap Growth Portfolio – S Class (2) 
         Neuberger Berman AMT Socially Responsive Portfolio – I Class (2) 
         PIMCO Variable Insurance Trust: 
             All Asset Administrative Class (8) 
             Total Return Administrative Class (8) 
         T. Rowe Price Blue Chip Growth Portfolio – II (2) 
         T. Rowe Price Health Sciences Portfolio – II (2) 
         Van Eck Worldwide Hard Assets Service Class (8) 
 
         (1)  Organized by Principal Life Insurance Company 
         (2)  Commenced operations January 4, 2005 
         (3)  Commenced operations April 28, 2006 
         (4)  Commenced operations January 5, 2007. 
         (5)  Commenced operations May 1, 2007. 
         (6)  Commenced operations May 19, 2008. 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

1. Nature of Operations and Significant Accounting Policies (continued) 
 
         (7)  Commenced operations November 24, 2008. 
         (8)  Commenced operations May 18, 2009. 
         (9)  Represented the operations of Janus Aspen Series Mid Cap Growth Portfolio – Service Shares Division until May 18, 
  2009 name change. 
         (10) Represented the operations of West Coast Equity Division until November 23, 2009 name change. 
 
         Commencement of operations date is the date that the division became available to contractholders. 
 
The assets of Separate Account B are owned by Principal Life. The assets of Separate Account B 
support the following variable annuity contracts of Principal Life and may not be used to satisfy 
the liabilities arising from any other business of Principal Life: Bankers Flexible Annuity; Pension 
Builder Plus; Pension Builder Plus – Rollover IRA; Personal Variable; Premier Variable; Principal 
Freedom Variable Annuity; Principal Freedom 2 Variable Annuity; The Principal Variable 
Annuity; The Principal Variable Annuity with Purchase Payment Credit Rider; Principal 
Investment Plus Variable Annuity, and Principal Investment Plus Variable Annuity with Purchase 
Rider. Principal Life no longer accepts contributions for Bankers Flexible Annuity Contracts, 
Pension Builder Plus Contracts and Pension Builder Plus-Rollover IRA Contracts. 
Contractholders are being given the option of withdrawing their funds or transferring to another 
contract. Contributions to the Personal Variable contracts are no longer accepted from new 
customers, only from existing customers beginning January 1998. 
 
Use of Estimates in the Preparation of Financial Statements 
 
The preparation of financial statements and accompanying notes of Separate Account B in 
accordance with U.S. generally accepted accounting principals requires management to make 
estimates and assumptions that affect the amounts reported and disclosed. These estimates and 
assumptions could change in the future as more information becomes known, which could impact 
the amounts reported and disclosed in the financial statements and accompanying notes. 
 
Investments 
 
Investments are stated at the closing net asset values (“NAV”) per share on December 31, 2009. 
Effective January 1, 2009, Principal Life changed its method of computing realized gains and 
losses from the average cost method to the specific identification method. This change had no 
effect on the statement of net assets at December 31, 2009 and 2008 or the net increase 
(decrease) in net assets resulting from operations for the periods indicated herein. Due to 
impracticability, realized and unrealized gains and losses for the period from January 1, 2008 to 
December 31, 2008, which are disclosed on the statement of changes in net assets, have not been 
retrospectively adjusted to amounts that would have been reported using the specific identification 
method. Instead, the specific identification method was adopted prospectively from January 1, 
2009 which is considered to be the earliest date practicable. 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

1. Nature of Operations and Significant Accounting Policies (continued) 
 
The specific identification method is preferred in order to create consistency in the accounting 
method used by all separate accounts sponsored by Principal Life, for use in life insurance, 
individual and group annuity products. Dividends are taken into income on an accrual basis as of 
the ex-dividend date. Investment transactions are accounted for on a trade date basis. 
 
Fair Value Measurements 
 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a 
liability in an orderly transaction between market participants at the measurement date (an exit 
price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair 
value into three levels: 
                   •  Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. 
                   •  Level 2 – Inputs other than quoted prices within Level 1 that are observable for the 
  asset or liability, either directly or indirectly. 
                   •  Level 3 – Unobservable inputs for the asset or liability reflecting internal assumptions. 
All investments of the open-end management investment companies listed above represent 
investments in mutual funds for which a daily NAV is calculated and published. Therefore, the 
investments fall into Level 1 of the fair value hierarchy. 
 
Foreign Tax Withholdings 
 
Principal Life may be entitled to claim a federal income tax credit to the extent foreign income 
taxes are withheld on investment income allocated to Separate Account B. Principal Life will 
compensate each separate account division in an amount equal to the tax benefit claimed on its 
federal income tax return, or subsequently claimed for refund, attributable to foreign taxes on the 
division’s share of income associated with investments allocated to Separate Account B within a 
reasonable time of receiving a tax benefit. The amounts presented as Payment from Affiliate on 
the Statement of Operations and the Statement of Changes in Net Assets reflect compensation for 
subsequently claimed refunds. 
 
2. Expenses and Related Party Transactions 
 
Principal Life is compensated for the following expenses: 
 
         Bankers Flexible Annuity Contracts – Mortality and expense risks assumed by Principal Life 
         are compensated for by a daily charge resulting in a reduction of the unit value equivalent to 
         an annual rate of 0.48% of the asset value of each contract. An annual administration charge 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

2. Expenses and Related Party Transactions (continued) 
 
         of $7 for each participant’s account is deducted as compensation for administrative expenses. 
         This charge is collected by redeeming units of the separate account. 
 
         Pension Builder Plus and Pension Builder Plus – Rollover IRA Contracts – Mortality and 
         expense risks assumed by Principal Life are compensated for by a daily charge resulting in a 
         reduction of the unit value equivalent to an annual rate of 1.50% (1% for a Rollover 
         Individual Retirement Annuity) of the asset value of each contract. A contingent sales charge 
         of up to 7% may be deducted from withdrawals made during the first ten years of a contract, 
         except for withdrawals related to death or permanent disability. An annual administration 
         charge will be deducted ranging from a minimum of $25 to a maximum of $275 depending 
         upon a participant’s investment account values and the number of participants under the 
         retirement plan and their participant investment account value. 
 
         Personal Variable Contracts – Mortality and expense risks assumed by Principal Life are 
         compensated for by a daily charge resulting in a reduction of the unit value equivalent to an 
         annual rate of 0.64% of the asset value of each contract. A contingent sales charge of up to 
         5% may be deducted from withdrawals from an investment account during the first seven 
         years from the date the first contribution which relates to such participant is accepted by 
         Principal Life. This charge does not apply to withdrawals made from investment accounts 
         which correlate to a plan participant as a result of the plan participant’s death or permanent 
         disability. An annual administration charge of $34 for each participant’s account plus 0.35% 
         of the annual average balance of investment account values which correlate to a plan 
         participant will be deducted on a quarterly basis. 
 
         Premier Variable Contracts – Mortality and expense risks assumed by Principal Life are 
         compensated for by a daily charge resulting in a reduction of the unit value equivalent to an 
         annual rate of 0.42% of the asset value of each contract. The Contractholder must also pay 
         contract administration charges. The annual charge ranges from a minimum charge of $2,150 
         to $7,725 plus 0.03% of account values greater than $30,000,000. The amount varies by Plan 
         document and account balance of contract. Recordkeeping charges are also paid by the 
         Contractholder. The annual charge ranges from $2,250 to $25,316 plus $10 per participant. 
         The amount varies by total plan participants. There were no contingent sales charges provided 
         for in these contracts. 
 
         Principal Freedom Variable Annuity – Mortality and expenses risk assumed by Principal Life 
         are compensated for by a daily charge resulting in a reduction of the unit value equivalent to 
         an annual rate of 0.85% of the asset value of each contract. A contingent sales charge up to 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

2. Expenses and Related Party Transactions (continued) 
 
         6% may be deducted from the withdrawals made during the first six years of a contract, 
         except for withdrawals related to death, annuitization, permanent disability, confinement in a 
         health facility, or terminal illness. Principal Life reserves the right to charge an additional 
         administrative fee of up to 0.15% of the asset value of each Division. 
 
         Principal Freedom 2 Variable Annuity – Mortality and expenses risk assumed by Principal Life 
         are compensated for by a daily charge resulting in a reduction of the unit value equivalent to 
         an annual rate of 0.95% of the asset value of each contract. A surrender charge up to 3% may 
         be deducted from the withdrawals made during the first three years of a contract, except for 
         death, annuitization, permanent disability, confinement in a health facility, or terminal illness. 
         Principal Life reserves the right to charge an additional administrative fee of up to 0.15% of 
         the asset value of each Division. 
 
         The Principal Variable Annuity – Mortality and expense risks assumed by Principal Life are 
         compensated for by a daily charge resulting in a reduction of the unit value equivalent to an 
         annual rate of 1.25% of the asset value of each contract. A surrender charge of up to 6% may 
         be deducted from the withdrawals made during the first six years of a contract, except for 
         death, annuitization, permanent disability, confinement in a health care facility, or terminal 
         illness. An annual administration charge of the lesser of 2% of the accumulated value or $30 is 
         deducted at the end of the contract year. Principal Life reserves the right to charge an 
         additional administrative fee of up to 0.15% of the asset value of each Division. This fee is 
         currently being waived. Effective November 27, 2000, Principal Life added a purchase 
         payment credit rider to the contract, at an annual rate of 0.6%. For electing participants, the 
         rider is deducted from the daily unit value. 
 
         The Principal Investment Plus Variable Annuity - Mortality and expense risks assumed by 
         Principal Life are compensated for by a daily charge resulting in a reduction of the unit value 
         equivalent to an annual rate of 1.25% of the asset value of each contract. A contingent sales 
         charge of up to 6% may be deducted from the withdrawals made during the first six years of a 
         contract, except for death, annuitization, permanent disability, confinement in a health care 
         facility, or terminal illness. An annual administration charge of the lesser of 2% of the 
         accumulated value or $30 is deducted at the end of the contract year. Principal Life reserves 
         the right to charge an additional administrative fee of up to 0.15% of the asset value of each 
         Division. This fee is currently being waived. The product also contains an optional premium 
         payment credit rider, which charges an annual rate of 0.6%. For electing participants, the rider 
         is deducted from the daily unit value. 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

2. Expenses and Related Party Transactions (continued) 
 
During the year ended December 31, 2009, management fees were paid indirectly to Principal 
Management Corporation (wholly owned by Principal Financial Services, Inc. ), an affiliate of 
Principal Life, in its capacity as advisor to Principal Variable Contracts Fund, Inc. Investment 
advisory and management fees are computed on an annual rate of 0.25% of the average daily net 
assets of the LargeCap S&P 500 Index Account and 0.03% of each of the Principal LifeTime 
Accounts’ average daily net assets. Prior to July 1, 2009, the annual rate paid by each Principal 
LifeTime Account was 0.1225% of the average daily net assets up to $3 billion and 0.1125% of 
the average daily net assets over $3 billion. The annual rate paid by the SAM Portfolios is based 
upon the aggregate average daily net assets (“aggregate net assets”) of the SAM Portfolios. The 
investment advisory and management fee schedule for the SAM Portfolios is 0.25% of aggregate 
net assets up to the first $1 billion and 0.20% of aggregate net assets over $1 billion. 
 
The annual rates used in this calculation for each of the other Accounts are as shown in the 
following tables. 

    Net Assets of Accounts (in millions)   
 
          Over 
  First $100  Next $100  Next $100  Next $100  $400 
Asset Allocation Account       0.80%       0.75%       0.70%       0.65%  0.60% 
Balanced Account       0.60       0.55       0.50       0.45  0.40 
Bond & Mortgage Securities Account       0.50       0.45       0.40       0.35  0.30 
Equity Income Account       0.60       0.55       0.50       0.45  0.40 
Government & High Quality Bond Account       0.50       0.45       0.40       0.35  0.30 
International SmallCap Account       1.20       1.15       1.10       1.05  1.00 
LargeCap Growth Account I       0.80       0.75       0.70       0.65  0.60 
MidCap Blend Account       0.65       0.60       0.55       0.50  0.45 
MidCap Growth Account I       0.90       0.85       0.80       0.75  0.70 
Money Market Account       0.50       0.45       0.40       0.35  0.30 
Real Estate Securities Account       0.90       0.85       0.80       0.75  0.70 
Short-Term Bond Account       0.50       0.45       0.40       0.35  0.30 
SmallCap Blend Account       0.85       0.80       0.75       0.70  0.65 
SmallCap Growth Account II       1.00       0.95       0.90       0.85  0.80 
SmallCap Value Account I       1.10       1.05       1.00       0.95  0.90 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

2. Expenses and Related Party Transactions (continued)       
 
    Net Assets of Accounts (in millions)   
  First  Next  Next  Next  Over 
  $250  $250  $250  $250  $1,000 
Diversified International Account  0.85%         0.80%  0.75%  0.70%   0.65% 
International Emerging Markets Account  1.25  1.20  1.15  1.10  1.05 
LargeCap Blend Account II  0.75  0.70  0.65  0.60  0.55 
LargeCap Value Account  0.60  0.55  0.50  0.45  0.40 
LargeCap Value Account III  0.75  0.70  0.65  0.60  0.55 
MidCap Value Account II  1.05  1.00  0.95  0.90  0.85 

  Net Assets of Accounts    Net Assets of Accounts   
    (in millions)      (in millions)   
  First  Next  Over    First  Over 
  $200  $300  $500    $500  $500 
Short-Term        Capital Appreciation   
Income Account  0.50%  0.45%  0.40%  Account  0.625%  0.50% 

    Net Assets of Accounts (in millions)   
      Next $1  Next $1  Over $3 
  First $500  Next $500  billion  billion  billion 
LargeCap Growth Account  0.68%  0.63%  0.61%  0.56%  0.51% 

                             Net Assets of Accounts       
  First $2  Over $2     
  billion  billion    Overall Fee 
Equity Income  0.50%  0.45%    0.25% 
Account      LargeCap S&P 500 Index Account   
Mortgage Securities         
Account  0.50  0.45     

3. Federal Income Taxes 
 
The operations of Separate Account B are a part of the operations of Principal Life. Under 
current practice, no federal income taxes are allocated by Principal Life to the operations of 
Separate Account B. 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments 
 
The aggregate cost of purchases and proceeds from sales of investments were as follows for the 
period ended December 31, 2009: 

Division:    Purchases           Sales 
 
     AIM V.I. Basic Value Series I Division:       
Principal Investment Plus Variable Annuity    $ 2,985,182  $ 1,209,848 
Principal Investment Plus Variable Annuity with Purchase       
Rider    353,238  81,914 
     
     AIM V.I. Capital Appreciation Series I Division:       
The Principal Variable Annuity    870,307  1,316,554 
The Principal Variable Annuity with Purchase Payment       
Credit Rider    37,772  574,913 
       
AIM V.I. Core Equity Series I Division:       
The Principal Variable Annuity    3,697,670  5,996,087 
The Principal Variable Annuity with Purchase Payment       
Credit Rider    324,841  3,174,132 
       
AIM V.I. Dynamics Series I Division:       
The Principal Variable Annuity    238,567  256,227 
The Principal Variable Annuity with Purchase Payment       
Credit Rider    163,820  199,009 
       
AIM V.I. Global Health Care Series I Division:       
The Principal Variable Annuity    1,051,385  1,613,975 
The Principal Variable Annuity with Purchase Payment       
Credit Rider    215,270  1,310,468 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
 
  AIM V.I. International Growth Series I Division:       
     Principal Investment Plus Variable Annuity    $ 3,047,163  $ 535,099 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    304,255  30,552 
         
  AIM V.I. Small Cap Equity Series I Division:       
     The Principal Variable Annuity    473,014  624,388 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    78,083  311,292 
     Principal Investment Plus Variable Annuity    1,417,672  271,627 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    152,522  158,224 
       
  AIM V.I. Technology Series I Division:       
     The Principal Variable Annuity    2,147,884  1,529,950 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    624,852  436,207 
       
  AllianceBernstein Small Cap Growth Class A Division:       
     Principal Investment Plus Variable Annuity    531,985  410,674 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    105,238  66,322 
         
  American Century VP Income & Growth Class I Division:       
   Principal Freedom Variable Annuity    249,584  589,664 
     Principal Freedom 2 Variable Annuity    4,212  34,818 
   The Principal Variable Annuity    1,888,136  2,203,086 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    449,426  1,940,750 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)     
 
  Division:  Purchases           Sales 
                                                                                                                                                                       
  American Century VP Inflation Protection Class II Division:     
     Principal Investment Plus Variable Annuity  $ 25,621,299  $ 18,469,041 
     Principal Investment Plus Variable Annuity with Purchase     
             Rider  5,131,306  4,485,484 
                                                                                                                                                                       
  American Century VP Ultra Class I Division:     
     The Principal Variable Annuity  560,071  842,400 
     The Principal Variable Annuity with Purchase Payment     
             Credit Rider  378,455  677,526 
                                                                                                                                                                       
  American Century VP Ultra Class II Division:     
   Principal Investment Plus Variable Annuity  4,220,299  9,687,396 
     Principal Investment Plus Variable Annuity with Purchase     
               Rider  683,058  3,078,034 
                                                                                                                                                                       
  American Century VP Value Class II Division:     
   The Principal Variable Annuity  2,463,626  3,781,895 
     The Principal Variable Annuity with Purchase Payment     
             Credit Rider  1,099,829  2,653,354 
                                                                                                                                                                       
  American Century VP Vista Class I Division:     
     Principal Investment Plus Variable Annuity  315,542  349,337 
     Principal Investment Plus Variable Annuity with Purchase     
               Rider  52,094  86,119 
                                                                                                                                                                       
  Asset Allocation Division:     
     Premier Variable  91,879  77,379 
   The Principal Variable Annuity  4,120,317  7,962,894 
     The Principal Variable Annuity with Purchase Payment     
             Credit Rider  470,250  3,214,020 
     Principal Investment Plus Variable Annuity  3,807,831  1,833,296 
     Principal Investment Plus Variable Annuity with Purchase     
             Rider  551,530  441,042 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  Balanced Division:       
     Personal Variable    $ 123,576  $ 144,531 
     Premier Variable    520,566  644,023 
   The Principal Variable Annuity    3,721,654  8,074,367 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    700,394  2,880,985 
         
  Bond & Mortgage Securities Division:       
     Personal Variable    108,462  45,167 
     Premier Variable    967,647  443,253 
     Principal Freedom Variable Annuity    1,373,460  2,233,131 
     Principal Freedom 2 Variable Annuity    191,345  326,868 
     The Principal Variable Annuity    23,021,530  29,260,346 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    10,398,772  16,389,718 
   Principal Investment Plus Variable Annuity    25,064,399  17,483,709 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    6,166,419  5,210,224 
       
  Capital Appreciation Division:       
     Principal Freedom 2 Variable Annuity    969  789 
   Principal Investment Plus Variable Annuity    1,885,392  503,253 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    588,392  219,055 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  Diversified International Division:       
     Personal Variable    $ 138,888  $ 168,081 
     Premier Variable    850,098  841,392 
     Principal Freedom Variable Annuity    744,461  1,057,668 
   Principal Freedom 2 Variable Annuity    164,780  161,734 
   The Principal Variable Annuity    16,397,842  21,206,404 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    5,003,773  10,843,934 
   Principal Investment Plus Variable Annuity    11,959,356  6,354,555 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    2,014,882  1,473,285 
       
  Dreyfus IP Technology Growth Service Shares Division:       
   Principal Investment Plus Variable Annuity    1,687,975  663,884 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    275,312  117,095 
         
  Equity Income Division:       
     Premier Variable    22,177  31,234 
     The Principal Variable Annuity    5,231,198  5,885,966 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    1,077,142  3,350,481 
   Principal Investment Plus Variable Annuity    23,635,059  19,518,802 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    3,389,188  4,480,169 
         
  Fidelity VIP Equity-Income Service Class 2 Division:       
   The Principal Variable Annuity    3,353,403  4,900,419 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    1,586,817  3,160,920 
     Principal Investment Plus Variable Annuity    1,446,505  1,496,361 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    240,795  295,954 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
       
  Fidelity VIP Growth Service Class Division:       
     The Principal Variable Annuity    $ 1,777,979  $ 3,168,409 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    343,983  1,853,690 
       
  Fidelity VIP Growth Service Class 2 Division:       
     Principal Investment Plus Variable Annuity    651,938  728,888 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    151,577  222,105 
       
  Fidelity VIP Overseas Service Class 2 Division:       
     Principal Investment Plus Variable Annuity    8,042,813  7,598,646 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    1,774,770  2,482,474 
 
  Fidelity VIP II Contrafund Service Class Division:       
     The Principal Variable Annuity    7,567,424  11,841,774 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    2,383,438  6,798,972 
         
  Fidelity VIP II Contrafund Service Class 2 Division:       
   Principal Investment Plus Variable Annuity    12,748,130  10,209,127 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    1,619,683  1,485,457 
       
  Fidelity VIP III Mid Cap Service Class 2 Division:       
     Principal Investment Plus Variable Annuity    2,375,837  1,779,131 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    478,385  560,624 
         
  Goldman Sachs VIT Mid Cap Value Service Class I       
     Principal Investment Plus Variable Annuity    $ 1,229,319  $ 1,794,423 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    539,970  657,738 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  Goldman Sachs VIT Structured Small Cap Equity Service       
               Class I Division:       
     Principal Investment Plus Variable Annuity    950,865  600,732 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    130,098  214,702 
         
  Government & High Quality Bond Division:       
     Pension Builder Plus    8,860  17,085 
     Pension Builder Plus - Rollover IRA    1,735  496 
     Personal Variable    81,473  83,231 
     Premier Variable    1,349,657  916,126 
     Principal Freedom Variable Annuity    664,581  1,419,216 
   Principal Freedom 2 Variable Annuity    89,969  111,365 
   The Principal Variable Annuity    27,849,252  43,956,769 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    6,972,485  21,771,881 
     Principal Investment Plus Variable Annuity    21,455,364  16,396,255 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    3,979,180  3,231,511 
         
  International Emerging Markets Division:       
     Premier Variable    371,613  315,325 
     The Principal Variable Annuity    13,490,730  12,042,182 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    3,795,010  7,026,467 
     Principal Investment Plus Variable Annuity    9,014,037  5,395,449 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    2,133,614  2,270,460 
         
  International SmallCap Division:       
     Premier Variable    $ 54,739  $ 11,389 
     The Principal Variable Annuity    6,237,080  8,338,684 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases  Sales 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,508,511  4,536,454 
     Principal Investment Plus Variable Annuity    2,693,670  2,830,699 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    848,273  931,316 
       
     Janus Aspen Enterprise Service Shares Division:       
     The Principal Variable Annuity    2,571,952  2,276,926 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    367,066  2,144,984 
         
  LargeCap Blend II Division:       
     The Principal Variable Annuity    4,508,621  9,280,292 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,820,671  5,516,291 
   Principal Investment Plus Variable Annuity    10,221,473  13,533,847 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    1,603,612  4,053,430 
         
  LargeCap Growth Division:       
     Personal Variable    365,437  551,643 
     Premier Variable    566,441  904,023 
   The Principal Variable Annuity    3,781,101  7,710,007 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,095,906  2,728,315 
     Principal Investment Plus Variable Annuity    4,587,753  1,698,100 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    810,551  507,727 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  LargeCap Growth I Division:       
     Premier Variable    $ 670,059  $ 379,404 
   Principal Freedom Variable Annuity    216,788  295,624 
     Principal Freedom 2 Variable Annuity    1,058  7,069 
     The Principal Variable Annuity    8,270,789  18,064,848 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,941,958  7,003,224 
     Principal Investment Plus Variable Annuity    2,708,849  1,747,778 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    749,288  665,722 
         
     LargeCap S&P 500 Index Division:       
     Premier Variable    185,310  242,675 
     Principal Freedom Variable Annuity    841,300  2,018,026 
     Principal Freedom 2 Variable Annuity    332,988  331,144 
     The Principal Variable Annuity    8,477,709  10,671,413 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    2,945,537  6,556,362 
     Principal Investment Plus Variable Annuity    9,823,493  5,539,291 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    1,261,129  945,653 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  LargeCap Value Division:       
     Bankers Flexible Annuity    $ 58,302  $ 312,707 
     Pension Builder Plus    72,785  105,938 
     Pension Builder Plus - Rollover IRA    52,716  94,892 
     Personal Variable    124,718  320,504 
     Premier Variable    1,220,817  1,808,830 
   Principal Freedom Variable Annuity    313,415  579,404 
   Principal Freedom 2 Variable Annuity    25,452  42,923 
   The Principal Variable Annuity    7,752,088  12,300,133 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    989,514  3,806,297 
   Principal Investment Plus Variable Annuity    3,904,835  2,407,086 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    1,057,161  943,161 
         
 LargeCap Value III Division:       
   The Principal Variable Annuity    4,541,135  7,579,005 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    1,617,086  3,840,634 
   Principal Investment Plus Variable Annuity    12,947,176  10,847,594 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    3,791,493  3,221,083 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  MFS VIT Utilities Service Class Division:       
   Principal Investment Plus Variable Annuity    $ 381,136  $ 9,318 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    186,730  1,140 
         
  MFS VIT Value Service Class Division:       
   Principal Investment Plus Variable Annuity    373,817  2,236 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    79,299  409 
         
  MidCap Blend Division:       
     Personal Variable    180,373  308,244 
   Premier Variable    1,031,798  1,218,928 
   Principal Freedom Variable Annuity    485,744  649,609 
   Principal Freedom 2 Variable Annuity    61,846  47,516 
   The Principal Variable Annuity    19,280,158  28,901,732 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    3,966,085  11,768,860 
     Principal Investment Plus Variable Annuity    12,765,890  10,045,524 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    2,082,302  3,089,635 
       
  MidCap Growth I Division:       
     Premier Variable    128,667  145,665 
     Principal Freedom Variable Annuity    97,541  154,806 
   Principal Freedom 2 Variable Annuity    2,017  7,287 
   The Principal Variable Annuity    2,562,710  4,497,577 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    728,339  2,354,690 
     Principal Investment Plus Variable Annuity    1,201,745  813,944 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    468,156  454,571 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
       
  MidCap Value II Division:       
     Premier Variable    $ 207,596  $ 200,229 
     Principal Freedom Variable Annuity    220,186  877,396 
     Principal Freedom 2 Variable Annuity    150,336  185,325 
     The Principal Variable Annuity    3,250,284  5,436,718 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    1,181,397  3,452,806 
   Principal Investment Plus Variable Annuity    7,677,932  9,736,984 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    1,497,422  2,884,254 
         
  Money Market Division:       
     Pension Builder Plus    446  9,854 
     Pension Builder Plus - Rollover IRA    21  170 
     Personal Variable    547,099  636,796 
     Premier Variable    3,040,748  3,473,807 
   Principal Freedom Variable Annuity    1,513,439  4,224,318 
   Principal Freedom 2 Variable Annuity    753,940  855,455 
     The Principal Variable Annuity    52,291,827  95,158,668 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    18,970,280  41,621,704 
     Principal Investment Plus Variable Annuity    50,533,446  57,248,468 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    13,054,635  17,215,382 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  Mortgage Securities Division:       
     Principal Freedom Variable Annuity    $ 235,422  $ 109,320 
   Principal Freedom 2 Variable Annuity    13,558  5,823 
     The Principal Variable Annuity    4,350,923  1,357,784 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,655,347  722,325 
     Principal Investment Plus Variable Annuity    8,715,179  1,319,262 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    1,344,262  277,753 
       
  Neuberger Berman AMT Partners I Class Division:       
   Principal Investment Plus Variable Annuity    2,158,452  1,573,206 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    302,451  300,903 
       
  Neuberger Berman AMT Small-Cap Growth S Class       
               Division:       
   Principal Investment Plus Variable Annuity    566,566  269,704 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    176,705  128,557 
       
  Neuberger Berman AMT Socially Responsive I Class       
               Division:       
     Principal Investment Plus Variable Annuity    1,694,363  1,125,669 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    469,423  268,151 
       
  PIMCO All Asset Administrative Class Division:       
   Principal Investment Plus Variable Annuity    435,557  25,687 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    114,395  1,145 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
       
  PIMCO Total Return Administrative Class Division:       
     Principal Investment Plus Variable Annuity    $ 3,955,554  $ 111,115 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    546,561  25,588 
         
  Principal LifeTime Strategic Income Division:       
     Principal Freedom 2 Variable Annuity    141,756  169,333 
     The Principal Variable Annuity    501,867  761,157 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    452,155  100,911 
   Principal Investment Plus Variable Annuity    6,371,297  3,431,508 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    724,146  989,225 
       
  Principal LifeTime 2010 Division:       
   Principal Freedom 2 Variable Annuity    130,934  515,860 
   The Principal Variable Annuity    436,602  381,881 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    93,773  168,552 
     Principal Investment Plus Variable Annuity    6,441,611  4,222,776 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    818,391  793,833 
       
  Principal LifeTime 2020 Division:       
   Principal Freedom 2 Variable Annuity    295,781  602,199 
     The Principal Variable Annuity    1,261,846  234,864 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    454,716  132,522 
   Principal Investment Plus Variable Annuity    24,405,618  13,656,058 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    3,794,220  3,651,587 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
       
     Principal LifeTime 2030 Division:       
   Principal Freedom 2 Variable Annuity    $ 197,652  $ 734,050 
     The Principal Variable Annuity    509,306  204,017 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    48,287  20,711 
   Principal Investment Plus Variable Annuity    22,380,279  2,660,498 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    6,136,603  1,388,129 
       
     Principal LifeTime 2040 Division:       
     Principal Freedom 2 Variable Annuity    6,907  79,629 
     The Principal Variable Annuity    3,447  34,535 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    11,979  22,871 
   Principal Investment Plus Variable Annuity    697,603  876,943 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    250,623  540,658 
         
     Principal LifeTime 2050 Division:       
   Principal Freedom 2 Variable Annuity    2,536  37,003 
     The Principal Variable Annuity    11,941  25,428 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    170,982  85,443 
     Principal Investment Plus Variable Annuity    584,514  375,756 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    154,073  225,527 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:       Purchases           Sales 
         
  Real Estate Securities Division:       
     Premier Variable    $ 108,303  $ 102,817 
     Principal Freedom 2 Variable Annuity    59,479  83,569 
     The Principal Variable Annuity    6,210,185  9,321,432 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    2,836,749  5,910,314 
   Principal Investment Plus Variable Annuity    3,257,466  2,405,250 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    934,545  1,043,328 
         
  SAM Balanced Portfolio Division:       
     Principal Freedom 2 Variable Annuity    851,617  296,753 
     The Principal Variable Annuity    16,579,025  5,133,250 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    4,959,666  3,600,723 
     Principal Investment Plus Variable Annuity    274,407,412  31,807,492 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    28,314,627  4,477,206 
       
  SAM Conservative Balanced Portfolio Division:       
     Principal Freedom 2 Variable Annuity    231,521  131,064 
     The Principal Variable Annuity    9,572,020  2,555,071 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    3,547,395  3,569,140 
   Principal Investment Plus Variable Annuity    59,188,786  11,384,405 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    11,405,647  4,258,825 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  SAM Conservative Growth Portfolio Division:       
     Principal Freedom 2 Variable Annuity    $ 383,000  $ 108,760 
   The Principal Variable Annuity    4,937,314  968,190 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    3,146,456  2,383,106 
     Principal Investment Plus Variable Annuity    10,964,676  3,267,951 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    3,049,003  1,479,690 
       
  SAM Flexible Income Portfolio Division:       
     Principal Freedom 2 Variable Annuity    64,231  598 
     The Principal Variable Annuity    11,028,965  8,205,591 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    4,910,043  4,808,682 
   Principal Investment Plus Variable Annuity    55,141,037  12,848,892 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    14,026,394  9,803,558 
       
  SAM Strategic Growth Portfolio Division:       
     Principal Freedom 2 Variable Annuity    367,863  30,740 
   The Principal Variable Annuity    3,668,187  1,795,647 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    1,549,437  763,801 
     Principal Investment Plus Variable Annuity    5,831,123  1,842,475 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    2,754,854  1,113,129 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
       
  Short-Term Bond Division:       
   Principal Freedom Variable Annuity    $ 391,211  $ 645,746 
   Principal Freedom 2 Variable Annuity    10,635  27,762 
     The Principal Variable Annuity    6,605,496  7,639,343 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    2,263,911  3,503,986 
   Principal Investment Plus Variable Annuity    23,813,367  15,276,474 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    6,678,706  4,879,189 
         
  Short-Term Income Division:       
   Principal Freedom Variable Annuity    101,174  6,746 
   Principal Freedom 2 Variable Annuity    51,823  376 
   The Principal Variable Annuity    6,988,447  1,562,974 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    3,041,384  1,265,801 
   Principal Investment Plus Variable Annuity    16,152,866  1,997,279 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    2,452,356  673,876 
         
  SmallCap Blend Division:       
     Premier Variable    61,486  28,303 
   Principal Freedom Variable Annuity    210,259  492,835 
     Principal Freedom 2 Variable Annuity    61,215  76,074 
   The Principal Variable Annuity    3,262,792  5,016,803 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    513,154  2,846,073 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases           Sales 
         
  SmallCap Growth II Division:       
     Premier Variable    $ 207,974  $ 163,045 
   Principal Freedom Variable Annuity    44,598  109,326 
   Principal Freedom 2 Variable Annuity    772  6,608 
   The Principal Variable Annuity    1,929,681  3,336,963 
     The Principal Variable Annuity with Purchase Payment       
             Credit Rider    437,213  1,668,412 
   Principal Investment Plus Variable Annuity    1,015,385  696,495 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    338,058  253,990 
       
  SmallCap Value I Division:       
     Premier Variable    218,342  180,952 
   Principal Freedom 2 Variable Annuity    6,067  34,997 
   The Principal Variable Annuity    4,622,641  6,767,432 
     The Principal Variable Annuity with Purchase Payment       
               Credit Rider    884,289  3,452,896 
     Principal Investment Plus Variable Annuity    8,303,658  7,250,001 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    1,650,278  1,940,697 
         
  T. Rowe Price Blue Chip Growth II Division:       
   Principal Investment Plus Variable Annuity    3,695,153  1,165,474 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider    348,789  120,250 
       
  T. Rowe Price Health Sciences II Division:       
   Principal Investment Plus Variable Annuity    1,426,706  1,530,893 
     Principal Investment Plus Variable Annuity with Purchase       
               Rider    336,338  261,654 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

4. Purchases and Sales of Investments (continued)       
 
  Division:    Purchases  Sales 
       
  Templeton Growth Securities Class 2 Division:       
   Principal Freedom Variable Annuity    $ 101,649  $ 217,309 
       
  Van Eck Worldwide Hard Assets Service Class Division:       
   Principal Investment Plus Variable Annuity                 808,022  54,698 
     Principal Investment Plus Variable Annuity with Purchase       
             Rider                 397,706  115,130 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding 
Transactions in units were as follows for each of the periods ended December 31: 

  2009 2008
Division:  Purchased  Redeemed  Purchased Redeemed  
 
AIM V.I. Basic Value Series I Division:         
   Principal Investment Plus Variable Annuity  365,552  146,427  47,666  25,805 
   Principal Investment Plus Variable Annuity With         
       Purchase Rider  43,256  9,914  14,829  14,446 
 
AIM V.I. Capital Appreciation Series I Division:         
   The Principal Variable Annuity  132,141  204,722  78,498  339,899 
   The Principal Variable Annuity With Purchase         
       Payment Credit Rider  5,736  89,398  27,441  68,753 
 
AIM V.I. Core Equity Series I Division:         
   The Principal Variable Annuity  404,222  745,983  165,835  994,243 
   The Principal Variable Annuity With Purchase         
       Payment Credit Rider  35,511  394,899  46,099  385,285 
 
AIM V.I. Dynamics Series I Division:         
   The Principal Variable Annuity  36,222  38,413  38,045  104,788 
   The Principal Variable Annuity With Purchase         
       Payment Credit Rider  24,873  29,835  19,334  31,821 
 
AIM V.I. Global Health Care Series I Division:         
   The Principal Variable Annuity  112,275  176,220  115,332  206,495 
   The Principal Variable Annuity With Purchase         
       Payment Credit Rider  22,988  143,083  34,120  111,312 
 
AIM V.I. International Growth Series I Division:         
   Principal Investment Plus Variable Annuity  417,031  72,911  19,471  5,076 
   Principal Investment Plus Variable Annuity With         
       Purchase Rider  41,640  4,163  5,418  1,424 
 
AIM V.I. Small Cap Equity Series I Division:         
   The Principal Variable Annuity  45,900  61,881  41,722  62,673 
   The Principal Variable Annuity With Purchase         
       Payment Credit Rider  7,577  30,851  10,024  23,879 
   Principal Investment Plus Variable Annuity  132,229  26,381  51,940  19,656 
   Principal Investment Plus Variable Annuity With         
       Purchase Rider  14,226  15,367  9,604  9,596 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   AIM V.I. Technology Series I Division:         
         The Principal Variable Annuity  499,585  351,364  169,550  314,151 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  145,337  100,178  38,219  120,809 
 
   Alliance Bernstein Small Cap Growth Class A         
             Division:         
         Principal Investment Plus Variable Annuity  55,641  42,447  52,705  21,891 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  11,007  6,855  5,599  9,250 
 
   American Century VP Income & Growth Class I         
             Division:         
         Principal Freedom Variable Annuity  14,243  73,516  26,293  144,628 
         Principal Freedom 2 Variable Annuity  60  4,990  2,225  2,442 
         The Principal Variable Annuity  175,242  281,099  95,020  400,991 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  41,712  247,627  41,744  155,994 
 
   American Century VP Inflation Protection Class II         
             Division:         
         Principal Investment Plus Variable Annuity  2,186,229  1,587,697  2,241,768  2,615,115 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  437,848  385,596  595,555  887,093 
 
   American Century VP Ultra Class I Division:         
         The Principal Variable Annuity  81,832  123,790  107,207  219,609 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  55,296  99,562  42,556  121,529 
 
   American Century VP Ultra Class II Division:         
         Principal Investment Plus Variable Annuity  519,671  1,121,101  2,239,417  886,780 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  84,109  356,216  734,091  350,009 
 
   American Century VP Value Class II Division:         
         The Principal Variable Annuity  163,935  381,966  171,028  590,577 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  73,185  267,985  112,626  314,339 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   American Century VP Vista Class I Division:         
         Principal Investment Plus Variable Annuity  32,558  35,007  59,224  20,623 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  5,375  8,630  26,563  25,188 
 
   Asset Allocation Division:         
         Premier Variable  69,592  58,686  104,078  34,870 
         The Principal Variable Annuity  152,397  386,578  128,531  675,630 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  17,393  156,032  48,964  194,298 
         Principal Investment Plus Variable Annuity  173,611  86,245  154,237  112,059 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  25,146  20,748  45,337  39,868 
 
   Balanced Division:         
         Personal Variable  57,264  84,810  49,179  180,818 
         Premier Variable  252,260  361,205  186,636  528,453 
         The Principal Variable Annuity  139,000  527,132  107,730  868,149 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  26,159  188,085  46,997  174,047 
 
   Bond & Mortgage Securities Division:         
         Personal Variable  41,115  22,468  24,342  68,309 
         Premier Variable  317,685  230,967  607,083  724,008 
         Principal Freedom Variable Annuity  37,888  172,908  50,341  323,353 
         Principal Freedom 2 Variable Annuity  15,455  35,423  36,784  20,275 
         The Principal Variable Annuity  768,546  1,715,864  630,453  2,767,094 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  347,151  961,114  440,145  1,230,982 
         Principal Investment Plus Variable Annuity  941,287  1,005,552  1,548,537  1,723,891 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  231,579  299,659  367,434  564,834 
 
   Capital Appreciation Division:         
         Principal Freedom 2 Variable Annuity  18  46  7,978  3,257 
         Principal Investment Plus Variable Annuity  251,542  69,296  137,341  27,386 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  78,501  30,163  78,621  25,704 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   Diversified International Division:         
         Personal Variable  61,074  90,337  41,916  127,577 
         Premier Variable  341,345  425,703  317,042  658,647 
         Principal Freedom Variable Annuity  50,601  99,687  49,713  162,138 
         Principal Freedom 2 Variable Annuity  16,143  20,737  33,468  52,947 
         The Principal Variable Annuity  672,532  1,230,330  621,481  1,788,934 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  205,222  629,131  314,724  550,292 
         Principal Investment Plus Variable Annuity  594,116  362,187  590,586  401,009 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  100,095  83,972  147,235  110,581 
 
   Dreyfus IP Technology Growth Service Shares         
             Division:         
         Principal Investment Plus Variable Annuity  157,092  63,886  41,281  19,594 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  25,622  11,268  7,718  14,489 
 
   Equity Income Division:         
         Premier Variable  21,602  33,890  4,174  31,367 
         The Principal Variable Annuity  592,175  858,128  428,662  1,415,153 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  121,933  488,474  183,547  520,612 
         Principal Investment Plus Variable Annuity  2,691,074  2,658,326  5,244,203  3,265,725 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  385,891  610,168  1,287,392  977,754 
 
   Fidelity VIP Equity – Income Service Class 2         
             Division:         
         The Principal Variable Annuity  369,927  587,377  356,539  847,264 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  175,048  378,876  201,305  453,675 
         Principal Investment Plus Variable Annuity  154,896  170,557  155,311  269,210 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  25,785  33,733  48,225  50,909 
 
   Fidelity VIP Growth Service Class Division:         
         The Principal Variable Annuity  291,841  515,089  275,835  767,582 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  56,462  301,356  145,467  232,830 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased Redeemed  
 
   Fidelity VIP Growth Service Class 2 Division:         
         Principal Investment Plus Variable Annuity  77,754  86,992  168,868  109,533 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  18,078  26,508  53,983  45,157 
 
   Fidelity VIP Overseas Service Class 2 Division:         
         Principal Investment Plus Variable Annuity  708,435  672,618  1,098,741  488,101 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  156,327  219,744  373,688  207,903 
 
   Fidelity VIP II Contrafund Service Class Division:         
         The Principal Variable Annuity  669,805  1,116,432  600,005  1,707,976 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  210,962  641,001  279,758  609,423 
 
   Fidelity VIP II Contrafund Service Class 2 Division:         
         Principal Investment Plus Variable Annuity  1,197,898  973,294  1,184,175  805,595 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  152,197  141,617  239,871  131,794 
 
   Fidelity VIP III Mid Cap Service Class 2 Division:         
         Principal Investment Plus Variable Annuity  181,357  141,950  127,009  91,328 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  36,517  44,730  65,904  37,552 
 
   Goldman Sachs VIT Mid Cap Value Service Class I         
             Division:         
         Principal Investment Plus Variable Annuity  104,746  174,565  263,805  207,963 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  46,009  63,986  88,837  101,533 
 
   Goldman Sachs VIT Structured Small Cap Equity         
             Service Class I Division:         
         Principal Investment Plus Variable Annuity  114,420  76,095  94,149  59,040 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  15,655  27,196  29,865  23,226 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   Government & High Quality Bond Division:         
         Pension Builder Plus  –  5,177  2,543  284 
         Pension Builder Plus – Rollover IRA  –  52  –  6,106 
         Personal Variable  29,333  36,240  66,387  122,194 
         Premier Variable  503,614  400,318  529,981  598,945 
         Principal Freedom Variable Annuity  38,270  126,738  94,029  276,892 
         Principal Freedom 2 Variable Annuity  6,805  10,277  22,703  12,256 
         The Principal Variable Annuity  1,059,620  2,302,532  1,680,452  3,070,222 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  265,292  1,140,449  795,295  1,253,295 
         Principal Investment Plus Variable Annuity  1,021,351  851,679  1,221,199  1,022,389 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  189,424  167,856  374,915  353,738 
 
   International Emerging Markets Division:         
         Premier Variable  132,252  112,723  80,132  57,968 
         The Principal Variable Annuity  515,924  510,836  366,560  896,473 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  145,132  298,066  170,142  348,114 
         Principal Investment Plus Variable Annuity  346,347  224,871  359,748  261,392 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  81,980  94,628  153,007  113,100 
 
   International SmallCap Division:         
         Premier Variable  29,597  6,250  5,564  38,497 
         The Principal Variable Annuity  290,389  469,097  228,700  792,826 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  70,234  255,200  93,556  233,942 
         Principal Investment Plus Variable Annuity  126,838  149,578  189,888  172,596 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  39,944  49,212  73,794  53,511 
 
   Janus Aspen Enterprise Service Shares Division:         
         The Principal Variable Annuity  439,368  389,732  253,040  590,093 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  62,706  367,149  58,967  208,802 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   LargeCap Blend II Division:         
         The Principal Variable Annuity  431,804  1,021,961  353,620  1,521,804 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  174,371  607,464  217,669  751,791 
         Principal Investment Plus Variable Annuity  998,697  1,412,870  2,544,338  1,444,602 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  156,683  423,159  737,439  510,239 
 
   LargeCap Growth Division:         
         Personal Variable  261,267  387,290  317,302  415,241 
         Premier Variable  381,871  622,068  401,193  908,028 
         The Principal Variable Annuity  270,082  569,800  226,302  917,826 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  78,281  201,633  122,696  195,750 
         Principal Investment Plus Variable Annuity  336,767  121,951  199,630  74,475 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  59,500  36,463  63,841  54,073 
 
   LargeCap Growth I Division:         
         Premier Variable  784,793  406,700  26,518  27,178 
         Principal Freedom Variable Annuity  28,198  40,572  16,902  81,269 
         Principal Freedom 2 Variable Annuity  142  949  6,161  2,778 
         The Principal Variable Annuity  366,116  792,951  183,974  1,044,842 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  85,964  307,404  93,597  242,525 
         Principal Investment Plus Variable Annuity  114,310  72,908  86,282  48,302 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  31,619  27,770  23,550  19,744 
 
   LargeCap S&P 500 Index Division:         
         Premier Variable  172,130  283,611  700,191  581,212 
         Principal Freedom Variable Annuity  63,527  263,228  59,972  446,840 
         Principal Freedom 2 Variable Annuity  41,240  43,978  55,792  41,924 
         The Principal Variable Annuity  968,609  1,498,753  679,443  2,151,942 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  336,539  920,812  297,169  927,381 
         Principal Investment Plus Variable Annuity  1,294,878  766,267  908,689  476,279 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  166,235  130,815  163,389  122,848 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009                    2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   LargeCap Value Division:         
         Bankers Flexible Annuity  –  10,373  –  4,723 
         Pension Builder Plus  2  18,122  179  66,669 
         Pension Builder Plus – Rollover IRA  8,800  17,733  25,914  34,699 
         Personal Variable  41,215  139,054  74,620  192,255 
         Premier Variable  420,756  765,646  336,982  1,206,870 
         Principal Freedom Variable Annuity  23,431  73,419  28,536  186,040 
         Principal Freedom 2 Variable Annuity  614  5,514  17,745  5,288 
         The Principal Variable Annuity  266,421  660,646  154,978  1,172,225 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  34,007  204,438  57,555  243,117 
         Principal Investment Plus Variable Annuity  193,897  128,784  194,692  222,979 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  52,495  50,461  45,133  54,617 
 
   LargeCap Value III Division:         
         The Principal Variable Annuity  441,149  924,480  495,405  1,437,263 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  157,092  468,477  283,738  643,817 
         Principal Investment Plus Variable Annuity  1,434,778  1,248,879  2,360,718  1,153,580 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  420,165  370,842  691,981  395,043 
 
   MFS VIT Utilities Service Class Division:         
         Principal Investment Plus Variable Annuity  31,084  621  –  – 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  15,229  76  –  – 
 
   MFS VIT Value Service Class Division:         
         Principal Investment Plus Variable Annuity  31,848  93  –  – 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  6,756  17  –  – 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
MidCap Blend Division:         
         Personal Variable  41,150  104,630  60,836  170,800 
         Premier Variable  229,464  377,033  202,969  482,249 
         Principal Freedom Variable Annuity  18,989  41,480  14,364  81,956 
         Principal Freedom 2 Variable Annuity  4,943  5,253  16,710  7,769 
         The Principal Variable Annuity  388,886  967,953  277,903  1,491,038 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  79,997  394,153  127,678  386,712 
         Principal Investment Plus Variable Annuity  330,271  325,185  549,704  376,318 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  53,872  100,015  148,019  117,199 
 
   MidCap Growth I Division:         
         Premier Variable  148,659  137,722  3,722  15,250 
         Principal Freedom Variable Annuity  9,646  15,774  6,960  36,258 
         Principal Freedom 2 Variable Annuity  255  918  4,008  3,529 
         The Principal Variable Annuity  289,755  511,395  192,995  736,469 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  82,350  267,739  78,626  306,553 
         Principal Investment Plus Variable Annuity  137,537  93,991  163,311  104,251 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  53,579  52,493  60,170  42,822 
 
   MidCap Value II Division:         
         Premier Variable  164,378  156,493  9,806  19,246 
         Principal Freedom Variable Annuity  12,109  59,077  19,377  103,822 
         Principal Freedom 2 Variable Annuity  23,714  29,468  26,764  24,866 
         The Principal Variable Annuity  315,576  568,610  260,635  842,118 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  114,704  361,118  158,173  414,730 
         Principal Investment Plus Variable Annuity  815,626  950,195  1,139,956  610,996 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  159,071  281,463  329,530  178,340 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009                    2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   Money Market Division:         
         Pension Builder Plus  –  3,206  551  3,128 
         Pension Builder Plus – Rollover IRA  –  16  –  16 
         Personal Variable  330,846  384,119  448,478  412,778 
         Premier Variable  1,765,593  2,013,513  2,297,761  2,036,913 
         Principal Freedom Variable Annuity  119,853  334,460  410,122  323,114 
         Principal Freedom 2 Variable Annuity  68,767  77,198  167,287  56,895 
         The Principal Variable Annuity  3,649,065  6,605,042  9,195,993  5,389,053 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  1,323,797  2,888,997  2,938,041  1,773,282 
         Principal Investment Plus Variable Annuity  3,532,919  3,978,080  4,968,099  2,908,092 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  912,682  1,196,262  1,501,062  963,694 
 
   Mortgage Securities Division:         
         Principal Freedom Variable Annuity  21,985  10,390  –  – 
         Principal Freedom 2 Variable Annuity  1,280  561  –  – 
         The Principal Variable Annuity  404,254  128,362  13,483  – 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  153,802  68,287  –  – 
         Principal Investment Plus Variable Annuity  804,901  122,767  12,112  4 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  124,151  25,847  314  195 
 
   Neuberger Berman AMT Partners I Class Division:         
         Principal Investment Plus Variable Annuity  160,465  172,874  97,584  68,857 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  22,485  33,065  36,566  25,793 
 
   Neuberger Berman AMT Small-Cap Growth S         
             Class Division:         
         Principal Investment Plus Variable Annuity  80,003  37,747  51,312  35,280 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  24,952  17,992  22,548  23,080 
 
   Neuberger Berman AMT Socially Responsive I         
           Class Division:         
         Principal Investment Plus Variable Annuity  169,363  122,798  128,230  55,331 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  46,922  29,253  21,715  7,130 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009                    2008 
Division:  Purchased  Redeemed  Purchased Redeemed  
 
   PIMCO All Asset Administrative Class Division:         
         Principal Investment Plus Variable Annuity  37,500  2,087  –  – 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  9,849  93  –  – 
                                                                                                                                
   PIMCO Total Return Administrative Class Division:         
         Principal Investment Plus Variable Annuity  362,358  9,471  –  – 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  50,069  2,181  –  – 
 
   Principal LifeTime Strategic Income Division:         
         Principal Freedom 2 Variable Annuity  10,805  19,942  9,734  53,557 
         The Principal Variable Annuity  47,227  72,811  124,292  64,018 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  42,548  9,653  29,727  21,068 
         Principal Investment Plus Variable Annuity  568,383  338,734  462,214  381,626 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  64,601  97,649  53,580  73,354 
 
   Principal LifeTime 2010 Division:         
         Principal Freedom 2 Variable Annuity  –  65,777  150,152  71,885 
         The Principal Variable Annuity  42,114  42,497  132,207  41,983 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  9,045  18,758  47,893  26,107 
         Principal Investment Plus Variable Annuity  559,036  426,510  695,190  728,316 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  71,024  80,179  40,974  117,547 
 
   Principal LifeTime 2020 Division:         
         Principal Freedom 2 Variable Annuity  17,322  73,074  189,997  156,752 
         The Principal Variable Annuity  133,990  22,747  86,678  30,979 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  48,285  12,835  49,755  23,763 
         Principal Investment Plus Variable Annuity  2,170,141  1,336,807  2,559,662  1,767,709 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  337,381  357,460  589,082  703,032 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   Principal LifeTime 2030 Division:         
         Principal Freedom 2 Variable Annuity  18,613  91,834  182,170  55,776 
         The Principal Variable Annuity  53,212  22,194  48,509  5,378 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  5,045  2,254  4,064  440 
         Principal Investment Plus Variable Annuity  2,304,264  267,889  529,697  335,260 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  631,822  139,772  210,076  124,408 
 
   Principal LifeTime 2040 Division:         
         Principal Freedom 2 Variable Annuity  10  10,629  17,230  20,982 
         The Principal Variable Annuity  347  4,377  5,223  1,728 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  1,206  2,898  3,635  211 
         Principal Investment Plus Variable Annuity  61,228  95,545  143,397  107,286 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  21,997  58,906  37,003  36,539 
 
   Principal LifeTime 2050 Division:         
         Principal Freedom 2 Variable Annuity  –  5,795  –  – 
         The Principal Variable Annuity  1,378  3,137  10,278  1,539 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  19,732  10,541  3,420  3,420 
         Principal Investment Plus Variable Annuity  55,534  41,275  87,805  53,901 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  14,638  24,773  29,358  40,207 
 
   Real Estate Securities Division:         
         Premier Variable  50,222  52,753  37,057  42,336 
         Principal Freedom 2 Variable Annuity  9,014  13,037  11,899  8,342 
         The Principal Variable Annuity  287,038  502,930  262,781  741,241 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  131,116  318,886  144,380  366,522 
         Principal Investment Plus Variable Annuity  159,238  122,341  146,177  143,200 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  45,685  53,068  84,092  76,518 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008 
Division:  Purchased  Redeemed  Purchased Redeemed  
 
   SAM Balanced Portfolio Division:         
         Principal Freedom 2 Variable Annuity  96,258  37,861  147,608  9,676 
         The Principal Variable Annuity  1,960,167  637,041  2,027,435  456,241 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  586,391  446,853  1,127,490  225,792 
         Principal Investment Plus Variable Annuity  31,601,567  3,524,872  22,941,122  1,421,680 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  3,260,796  496,159  3,396,230  404,009 
 
   SAM Conservative Balanced Portfolio Division:         
         Principal Freedom 2 Variable Annuity  25,862  16,702  46,079  2,694 
         The Principal Variable Annuity  1,076,882  299,127  1,125,674  362,311 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  399,093  417,847  533,878  197,494 
         Principal Investment Plus Variable Annuity  6,520,200  1,259,636  5,094,901  827,327 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  1,256,439  471,221  1,186,622  94,595 
 
   SAM Conservative Growth Portfolio Division:         
         Principal Freedom 2 Variable Annuity  42,850  13,020  94,394  5,951 
         The Principal Variable Annuity  614,175  134,095  627,625  66,607 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  391,402  330,062  408,126  42,487 
         Principal Investment Plus Variable Annuity  1,296,712  413,304  1,264,941  240,913 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  360,583  187,139  684,476  80,580 
 
   SAM Flexible Income Portfolio Division:         
         Principal Freedom 2 Variable Annuity  6,797  –  –  – 
         The Principal Variable Annuity  1,120,624  896,320  2,249,073  635,097 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  498,896  525,267  1,066,548  321,879 
         Principal Investment Plus Variable Annuity  5,631,313  1,359,905  4,536,153  636,603 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  1,432,454  1,037,592  1,379,849  142,902 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009                    2008 
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   SAM Strategic Growth Portfolio Division:         
         Principal Freedom 2 Variable Annuity  50,381  3,461  29,274  1,879 
         The Principal Variable Annuity  540,802  272,116  642,221  115,397 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  228,434  115,749  140,142  16,842 
         Principal Investment Plus Variable Annuity  813,782  261,462  1,174,204  346,747 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  384,464  157,962  458,779  50,769 
 
   Short-Term Bond Division:         
         Principal Freedom Variable Annuity  22,017  63,477  30,264  178,245 
         Principal Freedom 2 Variable Annuity  607  2,856  1,630  1,798 
         The Principal Variable Annuity  544,788  785,072  605,528  1,541,653 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  186,716  360,095  265,067  735,036 
         Principal Investment Plus Variable Annuity  2,054,323  1,539,107  2,873,201  3,134,346 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  576,156  491,579  711,922  978,904 
 
   Short-Term Income Division:         
         Principal Freedom Variable Annuity  9,311  607  –  – 
         Principal Freedom 2 Variable Annuity  4,749  –  –  – 
         The Principal Variable Annuity  648,474  145,251  5,929  402 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  282,217  117,634  –  – 
         Principal Investment Plus Variable Annuity  1,492,632  189,874  19,172  29 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  226,614  64,063  2,975  1 
 
   SmallCap Blend Division:         
         Premier Variable  62,611  34,318  80,443  44,855 
         Principal Freedom Variable Annuity  17,803  45,402  15,874  100,286 
         Principal Freedom 2 Variable Annuity  9,006  11,283  7,472  7,188 
         The Principal Variable Annuity  367,028  594,924  221,285  902,692 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  57,724  337,505  112,927  313,176 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

5. Changes in Units Outstanding (continued)         
 
  2009 2008
Division:  Purchased  Redeemed  Purchased   Redeemed 
 
   SmallCap Growth II Division:         
         Premier Variable  339,591  272,832  2,579  6,422 
         Principal Freedom Variable Annuity  7,600  18,526  5,152  29,184 
         Principal Freedom 2 Variable Annuity  115  917  6,258  11,614 
         The Principal Variable Annuity  285,723  485,373  200,569  750,598 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  64,737  242,677  88,848  186,354 
         Principal Investment Plus Variable Annuity  150,826  97,162  196,094  116,052 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  50,215  35,433  52,314  36,833 
 
   SmallCap Value I Division:         
         Premier Variable  158,948  136,017  45,544  28,339 
         Principal Freedom 2 Variable Annuity  147  5,285  10,024  11,484 
         The Principal Variable Annuity  268,036  446,076  178,269  678,392 
         The Principal Variable Annuity With Purchase         
             Payment Credit Rider  51,274  227,598  90,285  269,325 
         Principal Investment Plus Variable Annuity  541,262  454,240  676,808  547,123 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  107,571  121,592  183,563  171,493 
 
   T. Rowe Price Blue Chip Growth II Division:         
         Principal Investment Plus Variable Annuity  388,099  119,494  62,910  35,304 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  36,633  12,329  12,264  11,886 
 
   T. Rowe Price Health Sciences II Division:         
         Principal Investment Plus Variable Annuity  118,200  122,885  159,930  79,583 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  27,866  21,003  32,128  17,998 
 
   Templeton Growth Securities Class 2 Division:         
         Principal Freedom Variable Annuity  5,875  19,173  9,259  42,403 
 
   Van Eck Worldwide Hard Assets Service Class         
           Division:         
         Principal Investment Plus Variable Annuity  63,824  4,206  –  – 
         Principal Investment Plus Variable Annuity With         
             Purchase Rider  31,414  8,853  –  – 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights 
 
Principal Life sells a number of variable annuity products, which have unique 
combinations of features and fees that are charged against the contract owner’s account 
balance. Differences in the fee structures result in a variety of unit values, expense ratios, 
and total returns. 
 
Separate Account B has presented the following disclosures for 2009, 2008, 2007, 2006, 
and 2005 in accordance with AICPA Audit and Accounting Guide for Investment 
Companies. Information for years prior to 2005 is not required to be presented. The 
following table was developed by determining which products issued by Principal Life 
have the lowest and highest total return. Only product designs within each division that 
had units outstanding during the respective periods were considered when determining 
the lowest and highest total return. The summary may not reflect the minimum and 
maximum contract charges offered by Principal Life as contract owners may not have 
selected all available and applicable contract options as discussed in Note 2. 

        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
                       Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
AIM V.I. Basic Value Series I           
 Division:             
                       2009  388  $9.16 to $8.87  $3,530  2.35%  1.25% to 1.85%  46.09% to 45.41% 
                       2008  136  6.27 to 6.10  842  1.04  1.25 to 1.85  (52.32) to (52.68) 
                       2007  113  13.15 to 12.89  1,479  0.55  1.25 to 1.85  0.28 to (0.33) 
                       2006  82  13.12 to 12.93  1,073  0.64  1.25 to 1.85  11.80 to 11.13 
                       2005 (5)  13  11.73 to 11.64  154  0.19  1.25 to 1.85  3.76 to 3.25 
 
AIM V.I. Capital Appreciation           
 Series I Division:             
                       2009  836  7.42 to 7.26  6,191  0.63  1.25 to 1.85  19.68 to 19.02 
                       2008  992  6.20 to 6.10  6,141  -  1.25 to 1.85  (43.22) to (43.62) 
                       2007  1,295  10.92 to 10.82  14,126  -  1.25 to 1.85  10.61 to 9.95 
                       2006 (6)  1,579  9.88 to 9.84  15,582  0.07  1.25 to 1.85  (1.12) to (1.52) 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
  December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
AIM V.I. Core Equity Series I           
 Division:             
                       2009  3,316  $9.60 to $9.09  $31,520  1.80%  1.25% to 1.85%  26.82% to 26.07% 
                       2008  4,018  7.57 to 7.21  30,085  1.97  1.25 to 1.85  (31.06) to (31.46) 
                       2007  5,185  10.98 to 10.52  56,331  1.05  1.25 to 1.85  6.77 to 6.12 
                       2006  6,064  10.28 to 9.91  61,828  0.61  1.25 to 1.85  15.26 to 14.57 
                       2005  3,755  8.92 to 8.65  33,287  1.45  1.25 to 1.85  3.96 to 3.35 
 
AIM V.I. Dynamics Series I             
 Division:             
                       2009  309  8.20 to 7.79  2,468  -  1.25 to 1.85  40.65 to 39.86 
                       2008  316  5.83 to 5.57  1,800  -  1.25 to 1.85  (48.72) to (48.99) 
                       2007  395  11.37 to 10.92  4,416  -  1.25 to 1.85  10.79 to 10.12 
                       2006  303  10.26 to 9.92  3,068  -  1.25 to 1.85  14.68 to 13.99 
                       2005  289  8.95 to 8.70  2,558  -  1.25 to 1.85  9.41 to 8.61 
 
AIM V.I. Global Health Care           
 Series I Division:             
                       2009  818  10.77 to 10.23  8,655  0.34  1.25 to 1.85  25.96 to 25.37 
                       2008  1,002  8.55 to 8.16  8,405  -  1.25 to 1.85  (29.46) to (29.96) 
                       2007  1,170  12.12 to 11.65  13,957  –  1.25 to 1.85  10.46 to 9.79 
                       2006  1,279  10.98 to 10.61  13,857  –  1.25 to 1.85  3.93 to 3.31 
                       2005  1,366  10.56 to 10.27  14,276  -  1.25 to 1.85  6.77 to 6.20 
 
AIM V.I. International Growth           
 Series I Division:             
                       2009  400  8.12 to 8.04  3,243  2.96  1.25 to 1.85  33.55 to 32.89 
                       2008 (9)  18  6.08 to 6.05  112  1.65  1.25 to 1.85  (39.14) to (39.44) 
 
AIM V.I. Small Cap Equity Series           
 I Division:             
                       2009  476  11.99 to 11.61  5,662  0.20  1.25 to 1.85  19.78 to 19.08 
                       2008  410  10.01 to 9.75  4,072  -  1.25 to 1.85  (32.18) to (32.62) 
                       2007  413  14.76 to 14.47  6,049  0.05  1.25 to 1.85  (1.03) to 3.25 
                       2006  55  14.21 to 14.01  775  –  1.25 to 1.85  15.98 to 15.29 
                       2005 (5)  13  12.25 to 12.15  160  -  1.25 to 1.85  6.61 to 6.04 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
  December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
AIM V.I. Technology Series I           
 Division:             
                       2009  1,000  $5.49 to $5.21  $5,388  -%  1.25% to 1.85%  55.52% to 54.60% 
                       2008  807  3.53 to 3.37  2,798  -  1.25 to 1.85  (45.19) to (45.56) 
                       2007  1,034  6.44 to 6.19  6,561  –  1.25 to 1.85  6.36 to 5.72 
                       2006  1,028  6.06 to 5.86  6,148  –  1.25 to 1.85  9.11 to 8.46 
                       2005  1,137  5.55 to 5.40  6,245  -  1.25 to 1.85  0.91 to 0.37 
 
Alliance Bernstein VP Series           
 Small Cap Growth Class A           
 Division:             
                       2009  164  11.69 to 11.32  1,902  -  1.25 to 1.85  40.00 to 39.24 
                       2008  147  8.35 to 8.13  1,217  –  1.25 to 1.85  (46.23) to (46.58) 
                       2007  120  15.53 to 15.22  1,843  –  1.25 to 1.85  12.65 to 11.97 
                       2006  72  13.78 to 13.59  994  –  1.25 to 1.85  9.31 to 8.66 
                       2005 (5)  22  12.61 to 12.51  271  –  1.25 to 1.85  6.34 to 5.81 
 
American Century VP Income &           
 Growth Class I Division:             
                       2009  1,954  9.32 to 8.58  17,506  4.89  0.85 to 1.85  17.09 to 15.95 
                       2008  2,330  7.96 to 7.40  17,876  2.11  0.85 to 1.85  (35.13) to (35.82) 
                       2007  2,869  12.27 to 11.53  34,147  1.87  0.85 to 1.85  (0.92) to (1.91) 
                       2006  3,173  12.38 to 11.76  38,341  1.80  0.85 to 1.85  16.10 to 14.95 
                       2005  3,373  10.66 to 10.23  35,269  1.94  0.85 to 1.85  3.70 to 2.71 
 
American Century VP Inflation           
 Protection Class II Division:           
                       2009  6,976  11.73 to 11.36  81,192  1.75  1.25 to 1.85  8.91 to 8.29 
                       2008  6,325  10.77 to 10.49  67,684  4.86  1.25 to 1.85  (2.89) to (3.50) 
                       2007  6,990  11.09 to 10.87  77,061  4.39  1.25 to 1.85  8.17 to 7.52 
                       2006  4,767  10.25 to 10.11  48,661  3.17  1.25 to 1.85  0.33 to (0.27) 
                       2005 (5)  1,787  10.22 to 10.13  18,214  4.75  1.25 to 1.85  0.88 to 0.37 
 
American Century VP Ultra             
 Class I Division:             
                       2009  629  8.30 to 7.88  5,126  0.29  1.25 to 1.85  32.80 to 31.99 
                       2008  715  6.25 to 5.97  4,393  -  1.25 to 1.85  (42.18) to (42.54) 
                       2007  907  10.81 to 10.39  9,654  -  1.25 to 1.85  19.51 to 18.79 
                       2006  1,057  9.04 to 8.74  9,446  –  1.25 to 1.85  (4.47) to (5.04) 
                       2005  1,132  9.47 to 9.21  10,612  -  1.25 to 1.85  0.96 to 0.33 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
American Century VP Ultra             
 Class II Division:             
                       2009  5,741  $9.85 to $9.53  $56,071  0.18%  1.25% to 1.85%  32.93% to 31.99% 
                       2008  6,614  7.41 to 7.22  48,692  –  1.25 to 1.85  (42.38) to (42.74) 
                       2007  4,877  12.86 to 12.61  62,389  –  1.25 to 1.85  19.33 to 18.62 
                       2006  3,842  10.78 to 10.63  41,243  –  1.25 to 1.85  (4.59) to (5.16) 
                       2005 (5)  1,379  11.30 to 11.20  15,536  –  1.25 to 1.85  3.06 to 2.54 
 
American Century VP Value           
 Class II Division:             
                       2009  2,252  11.68 to 11.15  25,912  5.58  1.25 to 1.85  18.22 to 17.49 
                       2008  2,665  9.88 to 9.49  25,960  2.38  1.25 to 1.85  (27.67) to (28.16) 
                       2007  3,286  13.66 to 13.21  44,384  1.46  1.25 to 1.85  (6.49) to (7.05) 
                       2006  3,494  14.61 to 14.21  50,565  1.17  1.25 to 1.85  17.00 to 16.30 
                       2005  3,366  12.49 to 12.22  41,722  0.65  1.25 to 1.85  3.57 to 2.95 
 
American Century VP Vista             
 Class I Division:             
                       2009  197  11.38 to 11.02  2,219  -  1.25 to 1.85  20.94 to 20.17 
                       2008  203  9.41 to 9.17  1,892  -  1.25 to 1.85  (49.27) to (49.56) 
                       2007  163  18.55 to 18.18  2,996  -  1.25 to 1.85  38.03 to 37.20 
                       2006  52  13.44 to 13.25  694  –  1.25 to 1.85  7.66 to 7.01 
                       2005 (5)  25  12.48 to 12.38  313  -  1.25 to 1.85  4.22 to 3.70 
 
Asset Allocation Division:             
                       2009  2,430  1.32 to 21.97  52,865  2.97  0.44 to 1.85  18.28 to 16.61 
                       2008  2,701  1.11 to 18.84  50,513  3.02  0.51 to 1.85  (25.15) to (26.20) 
                       2007  3,276  1.49 to 25.53  85,057  1.39  0.42 to 1.85  11.31 to 9.72 
                       2006  3,514  1.34 to 23.27  84,221  0.77  0.42 to 1.85  12.29 to 10.71 
                       2005  4,008  1.19 to 21.02  84,245  1.65  0.42 to 1.85  5.31 to 3.85 
 
Balanced Division:             
                       2009  3,884  1.94 to 16.55  44,052  4.94  0.41 to 1.85  20.65 to 18.98 
                       2008  4,571  1.61 to 13.91  44,975  3.67  0.41 to 1.85  (31.21) to (32.21) 
                       2007  5,932  2.34 to 20.52  85,957  2.60  0.42 to 1.85  4.93 to 3.43 
                       2006  6,432  2.17 to 19.84  92,320  2.49  0.42 to 1.85  10.73 to 9.40 
                       2005  7,824  2.01 to 18.13  98,501  2.59  0.42 to 1.85  6.35 to 4.80 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to     Net  Investment  Ratio (2)   
  Units  Lowest to Highest   Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)  Expense Ratio   (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Bond & Mortgage Securities           
 Division:             
                       2009  15,157  $2.16 to $17.89  $251,405  11.41%  0.40% to 1.85%  20.41% to 18.71% 
                       2008  16,901  1.79 to 15.07  238,616  6.18  0.44 to 1.85  (17.41) to (18.58) 
                       2007  20,618  2.17 to 18.51  358,686  4.24  0.42 to 1.85  2.97 to 1.50 
                       2006  18,814  2.11 to 18.24  319,793  3.87  0.42 to 1.85  4.21 to 2.73 
                       2005  17,587  2.02 to 17.75  280,484  4.32  0.42 to 1.85  2.02 to 0.63 
 
Capital Appreciation Division:           
                       2009 (13)  537  8.81 to 8.60  4,670  1.68  0.95 to 1.85  28.61 to 27.41 
                       2008  306  6.85 to 6.75  2,080  1.08  0.95 to 1.85  (34.01) to (34.59) 
                       2007 (8)  139  10.38 to 10.32  1,433  0.08  0.95 to 1.85  3.48 to 2.86 
 
Diversified International Division:           
                       2009 (4)  10,543  2.36 to 19.86  176,753  5.22  0.40 to 1.85  27.22 to 26.50 
                       2008  11,444  1.85 to 15.70  151,539  1.79  0.41 to 1.85  (46.44) to (47.19) 
                       2007  13,180  3.46 to 29.73  325,698  0.91  0.42 to 1.85  15.60 to 13.95 
                       2006  13,309  2.99 to 26.09  290,731  1.18  0.42 to 1.85  27.43 to 25.63 
                       2005  13,536  2.35 to 20.77  228,177  1.03  0.42 to 1.85  23.04 to 21.53 
 
Dreyfus IP Technology Growth           
Service Shares Division:             
                       2009  197  12.39 to 11.99  2,425  0.12  1.25 to 1.85  55.26 to 54.11 
                       2008  90  7.98 to 7.78  710  -  1.25 to 1.85  (42.01) to (42.33) 
                       2007  75  13.76 to 13.49  1,018  -  1.25 to 1.85  13.01 to 12.33 
                       2006  37  12.18 to 12.00  452  –  1.25 to 1.85  2.75 to 2.13 
                       2005 (5)  13  11.85 to 11.75  159  -  1.25 to 1.85  8.18 to 7.64 
 
Equity Income Division:             
                       2009  20,376  1.01 to 7.88  162,644  5.86  0.55 to 1.85  19.23 to 17.79 
                       2008  21,213  0.85 to 6.69  142,949  2.55  0.48 to 1.85  (34.22) to (35.17) 
                       2007 (7)  20,275  1.29 to 10.32  209,477  0.94  0.42 to 1.85  5.73 to 3.46 
 
Fidelity VIP Equity-Income             
Service Class 2 Division:             
                       2009  4,491  10.11 to 9.65  44,737  2.08  1.25 to 1.85  28.30 to 27.48 
                       2008  4,936  7.88 to 7.57  38,384  2.15  1.25 to 1.85  (43.51) to (43.88) 
                       2007  5,796  13.95 to 13.49  79,977  1.62  1.25 to 1.85  0.01 to (0.59) 
                       2006  5,585  13.95 to 13.57  77,174  2.96  1.25 to 1.85  18.44 to 17.74 
                       2005  5,125  11.78 to 11.53  59,908  1.31  1.25 to 1.85  3.57 to 3.64 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to   Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Fidelity VIP Growth Service           
 Class Division:             
                       2009  2,477  $7.24 to $6.85  $17,734  0.33%  1.25% to 1.85%  26.57% to 25.69% 
                       2008  2,945  5.72 to 5.45  16,640  0.68  1.25 to 1.85  (47.91) to (48.19) 
                       2007  3,524  10.98 to 10.52  38,299  0.62  1.25 to 1.85  25.29 to 24.53 
                       2006  3,889  8.76 to 8.45  33,789  0.30  1.25 to 1.85  5.41 to 4.78 
                       2005  4,630  8.31 to 8.06  38,238  0.40  1.25 to 1.85  4.40 to 3.73 
 
Fidelity VIP Growth Service           
 Class 2 Division:             
                       2009  657  9.91 to 9.60  6,438  0.21  1.25 to 1.85  26.40 to 25.65 
                       2008  675  7.84 to 7.64  5,242  0.61  1.25 to 1.85  (47.98) to (48.27) 
                       2007  607  15.07 to 14.77  9,071  0.30  1.25 to 1.85  25.08 to 24.33 
                       2006  364  12.05 to 11.88  4,365  0.09  1.25 to 1.85  5.25 to 4.62 
                       2005 (5)  115  11.45 to 11.35  1,309  -  1.25 to 1.85  5.90 to 5.37 
 
Fidelity VIP Overseas Service           
 Class 2 Division:             
                       2009  3,652  $12.76 to $12.36  $46,197  1.96%  1.25% to 1.85%  24.61% to 23.97% 
                       2008  3,679  10.24 to 9.97  37,380  2.74  1.25 to 1.85  (44.65) to (45.01) 
                       2007  2,903  18.50 to 18.13  53,358  2.91  1.25 to 1.85  15.59 to 14.90 
                       2006  2,197  16.00 to 15.78  35,000  0.42  1.25 to 1.85  16.31 to 15.62 
                       2005 (5)  882  13.76 to 13.65  12,096  -  1.25 to 1.85  15.13 to 14.56 
 
Fidelity VIP II Contrafund             
 Service Class Division:             
                       2009  5,121  13.03 to 12.34  66,028  1.28  1.25 to 1.85  33.92 to 33.26 
                       2008  5,998  9.73 to 9.26  57,669  0.83  1.25 to 1.85  (43.30) to (43.71) 
                       2007  7,435  17.16 to 16.45  126,342  0.83  1.25 to 1.85  16.04 to 15.34 
                       2006  8,076  14.79 to 14.26  118,478  1.10  1.25 to 1.85  10.21 to 9.55 
                       2005  7,983  13.42 to 13.02  106,462  0.19  1.25 to 1.85  15.39 to 14.71 
 
Fidelity VIP II Contrafund             
 Service Class 2 Division:             
                       2009  3,293  12.64 to 12.24  41,367  1.25  1.25 to 1.85  33.76 to 32.90 
                       2008  3,058  9.45 to 9.21  28,737  0.84  1.25 to 1.85  (43.41) to (43.70) 
                       2007  2,571  16.70 to 16.36  42,751  0.90  1.25 to 1.85  15.84 to 15.14 
                       2006  1,620  14.41 to 14.21  23,281  1.10  1.25 to 1.85  10.05 to 9.39 
                       2005 (5)  528  13.10 to 12.99  6,902  -  1.25 to 1.85  13.29 to 12.72 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Fidelity VIP III Mid Cap Service           
 Class 2 Division:             
                       2009  522  14.63 to 14.16  7,571  0.48  1.25 to 1.85  38.02 to 37.21 
                       2008  490  10.60 to 10.32  5,161  0.24  1.25 to 1.85  (40.35) to (40.72) 
                       2007  426  17.77 to 17.41  7,539  0.49  1.25 to 1.85  13.90 to 13.21 
                       2006  283  15.60 to 15.38  4,393  0.09  1.25 to 1.85  11.01 to 10.35 
                       2005 (5)  71  14.05 to 13.94  997  -  1.25 to 1.85  12.50 to 11.94 
 
Goldman Sachs VIT Mid Cap           
 Value Service Class I Division:           
                       2009  1,297  12.38 to 11.99  15,906  1.88  1.25 to 1.85  31.42 to 30.75 
                       2008  1,385  9.42 to 9.17  12,939  1.07  1.25 to 1.85  (37.82) to (38.25) 
                       2007  1,341  15.15 to 14.85  20,193  0.93  1.25 to 1.85  1.91 to 1.30 
                       2006  853  14.86 to 14.65  12,621  1.43  1.25 to 1.85  14.72 to 14.04 
                       2005 (5)  253  12.96 to 12.85  3,272  1.31  1.25 to 1.85  8.95 to 8.41 
 
Goldman Sachs VIT Structured           
 Small Cap Equity             
 Service Class I Division:             
                       2009  487  9.13 to 8.84  4,414  1.30  1.25 to 1.85  26.10 to 25.21 
                       2008  460  7.24 to 7.06  3,310  0.71  1.25 to 1.85  (34.89) to (35.23) 
                       2007  419  11.12 to 10.90  4,626  0.42  1.25 to 1.85  (17.53) to (18.02) 
                       2006  298  13.48 to 13.29  4,001  0.94  1.25 to 1.85  10.88 to 10.22 
                       2005 (5)  94  12.16 to 12.06  1,146  0.60  1.25 to 1.85  5.70 to 5.18 
 
Government & High Quality           
 Bond Division:             
                       2009  12,665  2.33 to 18.24  209,264  6.22  0.37 to 1.85  4.85 to 3.34 
                       2008  14,592  2.23 to 17.65  237,197  4.95  0.42 to 1.85  (2.05) to (3.45) 
                       2007  16,521  2.27 to 18.28  277,392  4.61  0.42 to 1.85  4.46 to 2.97 
                       2006  16,900  2.18 to 17.75  276,598  4.15  0.42 to 1.85  3.79 to 2.32 
                       2005  18,392  2.10 to 17.35  286,799  4.41  0.42 to 1.85  1.45 to 0.15 
 
International Emerging Markets           
Division:             
                       2009 (4)  3,554  3.40 to 29.42  103,506  2.08  0.42 to 1.85  68.27 to 66.50 
                       2008  3,574  2.02 to 17.67  62,435  1.14  0.43 to 1.85  (55.05) to (55.69) 
                       2007  4,121  4.49 to 39.88  163,677  0.91  0.42 to 1.85  41.51 to 39.49 
                       2006  3,632  3.17 to 28.59  104,347  -  0.42 to 1.85  37.74 to 35.79 
                       2005  3,018  2.30 to 21.06  62,694  1.34  0.42 to 1.85  33.72 to 21.62 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)  Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
International SmallCap Division:           
                       2009 (4)  3,065  $1.78 to $20.59  $64,314  3.05%  0.42% to 1.85%  33.45% to 32.41% 
                       2008  3,437  1.33 to 15.55  54,645  2.09  0.40 to 1.85  (50.49) to (51.21) 
                       2007  4,137  2.70 to 31.87  133,593  1.47  0.42 to 1.85  8.75 to 7.21 
                       2006  4,226  2.48 to 29.72  127,551  0.52  0.42 to 1.85  29.83 to 28.00 
                       2005  4,454  1.91 to 23.22  102,214  0.53  0.42 to 1.85  28.19 to 19.76 
 
Janus Aspen Enterprise             
Service Shares Division:             
                       2009 (12)  1,712  7.36 to 6.97  12,455  -  1.25 to 1.85  42.64 to 41.67 
                       2008  1,967  5.16 to 4.92  9,984  0.06  1.25 to 1.85  (44.58) to (44.84) 
                       2007  2,454  9.31 to 8.92  22,519  0.07  1.25 to 1.85  20.22 to 19.50 
                       2006  2,530  7.74 to 7.47  19,323  -  1.25 to 1.85  11.90 to 11.23 
                       2005  2,681  6.92 to 6.71  18,346  -  1.25 to 1.85  10.54 to 10.00 
 
LargeCap Blend II Division:             
                       2009  14,829  10.86 to 10.38  159,053  1.87  1.25 to 1.85  28.07 to 27.36 
                       2008  16,533  8.48 to 8.15  138,623  1.40  1.25 to 1.85  (37.23) to (37.60) 
                       2007  16,908  13.51 to 13.06  226,044  0.67  1.25 to 1.85  3.81 to 3.19 
                       2006  14,897  13.01 to 12.65  192,106  0.62  1.25 to 1.85  14.38 to 13.70 
                       2005  11,345  11.37 to 11.13  128,134  0.01  1.25 to 1.85  3.44 to 3.17 
 
LargeCap Growth Division:             
                       2009  6,145  1.72 to 14.97  58,964  0.76  0.40 to 1.85  26.48 to 24.65 
                       2008  6,697  1.36 to 12.01  49,772  0.52  0.41 to 1.85  (43.40) to (44.19) 
                       2007  7,931  2.40 to 21.52  104,201  0.17  0.42 to 1.85  22.68 to 20.93 
                       2006  8,539  1.95 to 17.80  96,085  0.27  0.42 to 1.85  9.46 to 7.91 
                       2005  10,265  1.79 to 16.49  101,200  0.73  0.42 to 1.85  11.88 to 10.05 
 
LargeCap Growth I Division:           
                       2009  4,745  1.03 to 26.96  118,873  0.05  0.49 to 1.85  52.05 to 49.86 
                       2008  4,983  0.68 to 17.99  89,910  0.17  0.49 to 1.85  (40.85) to (41.69) 
                       2007  6,013  1.14 to 30.85  185,017  0.53  0.42 to 1.85  8.14 to 6.52 
                       2006  6,016  1.06 to 28.96  179,750  –  0.42 to 1.85  5.71 to 4.27 
                       2005  6,904  1.00 to 27.78  195,218  –  0.42 to 1.85  7.53 to 5.59 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)  Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
LargeCap S&P 500 Index             
 Division:             
                       2009  11,964  $1.01 to $8.05  $96,031  4.51%  0.37% to 1.85%  25.78% to 23.85% 
                       2008  12,828  0.80 to 6.50  82,148  2.42  0.43 to 1.85  (37.36) to (38.21) 
                       2007  14,712  1.28 to 10.52  154,077  1.39  0.42 to 1.85  4.70 to 3.21 
                       2006  15,070  1.22 to 10.19  152,650  1.33  0.42 to 1.85  15.09 to 13.46 
                       2005  15,133  1.06 to 8.98  134,689  0.03  0.42 to 1.85  3.92 to 2.56 
 
LargeCap Value Division:             
                       2009  7,449  31.55 to 20.18  99,153  5.02  0.35 to 1.85  15.90 to 14.14 
                       2008  8,481  2.34 to 17.68  97,288  2.36  0.41 to 1.85  (35.44) to (36.36) 
                       2007  10,935  3.63 to 27.78  193,783  1.66  0.42 to 1.85  (0.52) to (1.94) 
                       2006  11,695  3.65 to 28.33  213,650  1.57  0.42 to 1.85  19.45 to 17.76 
                       2005  13,018  3.05 to 24.06  198,490  0.01  0.42 to 1.85  6.27 to 4.85 
 
LargeCap Value III Division:           
                       2009  13,417  9.67 to 9.24  128,180  3.72  1.25 to 1.85  18.36 to 17.71 
                       2008  13,977  8.17 to 7.85  113,001  2.34  1.25 to 1.85  (41.56) to (41.89) 
                       2007  13,775  13.98 to 13.51  190,694  1.26  1.25 to 1.85  (4.92) to (5.49) 
                       2006  11,912  14.70 to 14.30  173,683  0.94  1.25 to 1.85  20.04 to 19.33 
                       2005  9,023  12.24 to 11.98  109,779  0.01  1.25 to 1.85  2.59 to 3.51 
 
MFS VIT Utilities Service Class           
 Division:             
                       2009 (11)  46  13.03 to 12.98  594  –  1.25 to 1.85  27.62 to 27.13 
 
MFS VIT Value Service Class           
 Division:             
                       2009 (11)  38  12.15 to 12.10  467  –  1.25 to 1.85  18.31 to 17.82 
 
MidCap Blend Division:             
                       2009  8,467  3.98 to 33.89  245,427  0.86  0.40 to 1.85  33.20 to 31.31 
                       2008  9,635  2.99 to 25.81  211,731  0.63  0.44 to 1.85  (34.20) to (35.15) 
                       2007  11,351  4.54 to 39.80  380,164  0.61  0.42 to 1.85  8.99 to 7.43 
                       2006  11,881  4.17 to 37.04  367,161  1.03  0.42 to 1.85  13.75 to 12.14 
                       2005  13,033  3.66 to 33.03  339,324  0.09  0.42 to 1.85  8.61 to 7.21 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)  Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
MidCap Growth I Division:             
                       2009  3,348  $11.86 to $1.14  $34,962  0.16%  0.85% to 2.73%  34.01% to 34.22% 
                       2008  3,706  0.85 to 7.58  29,096  0.09  0.27 to 1.85  (41.39) to (42.23) 
                       2007  4,441  1.45 to 13.12  59,984  0.11  0.42 to 1.85  10.31 to 8.74 
                       2006  4,666  1.31 to 12.06  57,787  -  0.42 to 1.85  9.20 to 7.64 
                       2005  4,764  1.20 to 11.21  53,923  -  0.42 to 1.85  13.21 to 10.74 
 
MidCap Value II Division:             
                       2009  6,523  1.34 to 11.56  78,304  1.93  0.42 to 1.85  33.53 to 31.66 
                       2008  7,324  1.00 to 8.78  66,670  0.89  0.66 to 1.85  (44.15) to (44.95) 
                       2007  7,574  1.80 to 15.95  125,209  0.64  0.42 to 1.85  (1.45) to (2.86) 
                       2006  6,981  1.83 to 16.42  119,378  0.24  0.42 to 1.85  12.80 to 11.20 
                       2005  6,389  1.62 to 14.76  94,905  -  0.42 to 1.85  10.20 to 6.72 
 
Money Market Division:             
                       2009  14,990  1.71 to 13.56  164,649  0.32  0.43 to 1.85  (0.20) to (1.60) 
                       2008  20,768  1.71 to 13.78  244,388  2.44  0.40 to 1.85  2.15 to 0.73 
                       2007  12,707  1.68 to 13.68  131,679  4.73  0.42 to 1.85  4.55 to 2.96 
                       2006  9,838  1.60 to 13.29  94,506  4.53  0.42 to 1.85  4.32 to 2.71 
                       2005  9,888  1.54 to 12.94  82,162  2.64  0.42 to 1.85  2.67 to 0.78 
 
Mortgage Securities Division:           
                       2009  1,180  10.66 to 10.54  12,511  8.98  0.85 to 1.85  5.54 to 103.87 
                       2008 (10)  26  10.10 to 5.17  259  -  0.85 to 1.85  1.20 to (48.20) 
 
Neuberger Berman AMT Partners           
 I Class Division:             
                       2009  456  11.85 to 11.48  5,364  2.65  1.25 to 1.85  54.10 to 53.27 
                       2008  479  7.69 to 7.49  3,660  0.54  1.25 to 1.85  (53.00) to (53.28) 
                       2007  440  16.36 to 16.03  7,154  0.70  1.25 to 1.85  7.97 to 7.32 
                       2006  310  15.15 to 14.94  4,672  0.96  1.25 to 1.85  10.85 to 10.19 
                       2005 (5)  65  13.67 to 13.55  884  1.51  1.25 to 1.85  11.12 to 10.57 
 
Neuberger Berman AMT Small           
Cap Growth S Class Division:           
                       2009  338  8.33 to 8.06  2,780  -  1.25 to 1.85  21.25 to 20.48 
                       2008  288  6.87 to 6.69  1,961  -  1.25 to 1.85  (40.21) to (40.59) 
                       2007  273  11.49 to 11.26  3,111  -  1.25 to 1.85  (0.74) to (1.34) 
                       2006  174  11.58 to 11.42  2,008  -  1.25 to 1.85  3.95 to 3.33 
                       2005 (5)  58  11.14 to 11.05  640  -  1.25 to 1.85  4.32 to 3.80 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Neuberger Berman AMT Socially           
 Responsive I Class Division:           
                       2009  477  $11.23 to $10.88  $5,324  2.33%  1.25% to 1.85%  29.83% to 29.06% 
                       2008  413  8.65 to 8.43  3,555  2.30  1.25 to 1.85  (40.22) to (40.55) 
                       2007  325  14.47 to 14.18  4,689  0.10  1.25 to 1.85  6.27 to 5.63 
                       2006  186  13.62 to 13.43  2,519  0.14  1.25 to 1.85  12.29 to 11.62 
                       2005 (5)  64  12.13 to 12.03  773  -  1.25 to 1.85  5.57 to 5.22 
 
PIMCO All Asset             
 Administrative Class Division:           
                       2009 (11)  45  11.49 to 11.45  519  15.41  1.25 to 1.85  14.21 to 13.82 
 
PIMCO Total Return             
 Administrative Class Division:           
                       2009 (11)  401  10.67 to 10.63  4,273  3.19  1.25 to 1.85  6.70 to 6.30 
 
Principal LifeTime Strategic           
 Income Division:             
                       2009  2,006  9.62 to 10.44  21,415  5.09  0.95 to 1.85  17.75 to 16.78 
                       2008  1,811  8.17 to 8.94  16,446  3.91  0.95 to 1.85  (24.63) to (25.25) 
                       2007  1,725  10.84 to 11.97  20,783  1.19  0.95 to 1.85  1.15 to (0.06) 
                       2006  1,035  10.71 to 11.93  12,491  0.13  0.95 to 1.85  1.69 to 8.24 
                       2005 (5)  490  11.11 to 11.02  5,446  -  1.25 to 1.85  4.35 to 3.83 
 
Principal LifeTime 2010 Division:           
                       2009  3,536  9.46 to 10.54  37,830  4.27  0.95 to 1.85  23.98 to 22.84 
                       2008  3,489  7.63 to 8.58  30,145  4.31  0.95 to 1.85  (31.57) to (32.17) 
                       2007  3,408  11.15 to 12.66  43,289  1.12  0.95 to 1.85  2.75 to 0.95 
                       2006  2,089  10.85 to 12.43  26,166  0.04  0.95 to 1.85  2.75 to 10.24 
                       2005 (5)  1,126  11.36 to 11.27  12,780  -  1.25 to 1.85  4.67 to 4.15 
 
Principal LifeTime 2020 Division:           
                       2009  14,515  9.45 to 10.85  160,531  3.46  0.95 to 1.85  26.34 to 25.14 
                       2008  13,611  7.48 to 8.67  119,536  4.33  0.95 to 1.85  (34.79) to (35.35) 
                       2007  12,818  11.47 to 13.42  173,292  0.49  0.95 to 1.85  3.87 to 1.54 
                       2006  7,291  11.04 to 13.03  95,945  -  0.95 to 1.85  3.41 to 13.06 
                       2005 (5)  2,259  11.62 to 11.52  26,189  -  1.25 to 1.85  5.41 to 4.89 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
                       Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Principal LifeTime 2030 Division:           
                       2009  4,758  $9.24 to $10.61  $51,252  1.78%  0.95% to 1.85%  26.92% to 25.86% 
                       2008  2,269  7.28 to 8.43  18,995  4.09  0.95 to 1.85  (36.97) to (37.60) 
                       2007  1,816  11.55 to 13.52  24,342  0.35  0.95 to 1.85  4.96 to 1.97 
                       2006  914  11.01 to 12.99  11,982  0.01  0.95 to 1.85  3.90 to 12.73 
                       2005 (5)  280  11.61 to 11.52  3,241  -  1.25 to 1.85  5.21 to 4.68 
 
Principal LifeTime 2040 Division:           
                       2009  751  9.13 to 10.67  8,167  2.73  0.95 to 1.85  28.23 to 27.18 
                       2008  839  7.12 to 8.39  7,122  3.94  0.95 to 1.85  (38.73) to (39.33) 
                       2007  799  11.62 to 13.84  11,107  0.29  0.95 to 1.85  5.52 to 2.13 
                       2006  390  11.01 to 13.22  5,191  0.02  0.95 to 1.85  4.22 to 13.03 
                       2005 (5)  123  11.79 to 11.70  1,449  -  1.25 to 1.85  5.48 to 4.95 
 
Principal LifeTime 2050 Division:           
                       2009  464  9.05 to 10.63  5,018  2.41  0.95 to 1.85  28.73 to 27.76 
                       2008  458  7.03 to 8.32  3,856  4.05  0.95 to 1.85  (39.60) to (40.19) 
                       2007  426  11.64 to 13.92  5,960  0.21  0.95 to 1.85  5.61 to 2.26 
                       2006  260  11.02 to 13.29  3,485  0.01  1.25 to 1.85  4.59 to 13.38 
                       2005 (5)  66  11.82 to 11.73  774  -  1.25 to 1.85  5.46 to 4.94 
 
Real Estate Securities Division:           
                       2009  3,012  2.24 to 23.63  72,274  4.21  0.37 to 1.85  28.33 to 26.50 
                       2008  3,393  1.74 to 18.68  64,057  2.39  0.47 to 1.85  (33.14) to (34.09) 
                       2007  4,085  2.61 to 28.34  116,915  0.83  0.42 to 1.85  (18.04) to (19.21) 
                       2006  5,236  3.18 to 35.07  181,645  1.59  0.42 to 1.85  35.90 to 34.11 
                       2005  5,253  2.34 to 26.15  133,793  0.02  0.42 to 1.85  15.27 to 13.74 
 
SAM Balanced Portfolio             
 Division:             
                       2009  62,913  9.27 to 9.05  577,353  3.66  0.95 to 1.85  22.62 to 21.64 
                       2008  30,551  7.56 to 7.44  229,327  3.52  0.95 to 1.85  (26.82) to (27.56) 
                       2007 (8)  3,428  10.33 to 10.28  35,315  0.06  0.95 to 1.85  3.35 to 2.20 
 
SAM Conservative Balanced           
 Portfolio Division:             
                       2009  14,160  9.90 to 9.66  138,649  3.08  0.95 to 1.85  20.00 to 18.97 
                       2008  7,346  8.25 to 8.12  60,144  3.11  0.95 to 1.85  (19.98) to (20.70) 
                       2007 (8)  843  10.31 to 10.25  8,661  0.29  0.95 to 1.85  3.07 to 1.64 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
         December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
Division  (000’s)  Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
SAM Conservative Growth             
 Portfolio Division:             
                       2009  4,941  $8.53 to $8.32  $41,606  4.97%  0.95% to 1.85%  24.53% to 23.44% 
                       2008  3,313  6.85 to 6.74  22,494  3.79  0.95 to 1.85  (33.75) to (34.37) 
                       2007 (8)  670  10.34 to 10.28  6,902  0.54  0.95 to 1.85  3.30 to 2.62 
 
SAM Flexible Income Portfolio           
 Division:             
                       2009  12,515  10.40 to 10.15  128,680  4.54  0.95 to 1.85  18.86 to 17.75 
                       2008  7,644  8.75 to 8.62  66,370  4.86  0.95 to 1.85  (14.55) to (15.32) 
                       2007 (8)  149  10.24 to 10.19  1,519  0.49  0.95 to 1.85  2.43 to 1.12 
 
SAM Strategic Growth Portfolio           
 Division:             
                       2009  3,779  8.08 to 7.89  30,169  3.70  0.95 to 1.85  26.25 to 25.04 
                       2008  2,572  6.40 to 6.31  16,339  3.61  0.95 to 1.85  (38.04) to (38.56) 
                       2007 (8)  659  10.33 to 10.27  6,786  0.18  0.95 to 1.85  3.16 to 2.87 
 
Short-Term Bond Division:             
                       2009  12,702  10.25 to 9.59  125,715  6.32  0.85 to 1.85  9.28 to 8.12 
                       2008  12,560  9.38 to 8.87  114,329  4.85  0.85 to 1.85  (12.42) to (13.29) 
                       2007  14,642  10.71 to 10.23  152,978  3.29  0.85 to 1.85  2.19 to 1.17 
                       2006  11,441  10.48 to 10.11  117,594  2.22  0.85 to 1.85  3.56 to 2.53 
                       2005  8,171  10.12 to 9.86  81,529  1.51  0.85 to 1.85  0.94 to 0.46 
 
Short-Term Income Division:           
                       2009  2,174  10.89 to 10.77  23,551  7.36  0.85 to 1.85  9.01 to 110.35 
                       2008 (10)  28  9.99 to 5.12  261  -  0.85 to 1.85  0.30 to (48.59) 
 
SmallCap Blend Division:             
                       2009  3,419  1.02 to 9.60  33,829  0.73  0.33 to 1.85  21.60 to 19.85 
                       2008  3,928  0.84 to 8.01  32,501  0.45  0.43 to 1.85  (37.00) to (37.86) 
                       2007  4,859  1.33 to 12.89  65,212  0.31  0.42 to 1.85  1.22 to (0.23) 
                       2006  5,338  1.31 to 12.92  71,752  0.16  0.42 to 1.85  12.23 to 10.64 
                       2005  5,934  1.17 to 11.68  70,854  0.02  0.42 to 1.85  6.36 to 5.13 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to   Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to  Total Return (3) 
                       Division  (000’s)   Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
SmallCap Growth II Division:           
                       2009  3,540  $0.64 to $7.98  $28,675  -%  0.72% to 1.85%  31.00% to 29.34% 
                       2008  3,794  0.49 to 6.17  24,055  -  0.43 to 1.85  (41.39) to (42.28) 
                       2007  4,379  0.83 to 10.69  47,856  -  0.42 to 1.85  4.48 to 3.06 
                       2006  4,608  0.80 to 10.37  48,773  -  0.42 to 1.85  8.52 to 6.98 
                       2005  4,861  0.73 to 9.69  46,695  -  0.42 to 1.85  5.80 to 4.72 
 
SmallCap Value I Division:             
                       2009  4,686  1.42 to 16.99  80,632  2.30  0.46 to 1.85  15.68 to 14.10 
                       2008  4,949  1.23 to 14.89  74,626  0.98  0.41 to 1.85  (32.10) to (33.08) 
                       2007  5,471  1.81 to 22.25  123,310  0.36  0.42 to 1.85  (9.90) to (11.18) 
                       2006  4,998  2.01 to 25.05  126,060  0.29  0.42 to 1.85  18.24 to 16.47 
                       2005  4,563  1.70 to 21.51  95,378  0.04  0.42 to 1.85  5.59 to 4.28 
 
T. Rowe Price Blue Chip Growth           
 II Division:             
                       2009  457  11.01 to 10.66  5,001  -  1.25 to 1.85  40.08 to 39.16 
                       2008  164  7.86 to 7.66  1,278  0.11  1.25 to 1.85  (43.37) to (43.68) 
                       2007  136  13.88 to 13.60  1,872  0.11  1.25 to 1.85  11.08 to 10.42 
                       2006  83  12.49 to 12.32  1,028  0.24  1.25 to 1.85  7.97 to 7.33 
                       2005 (5)  56  11.57 to 11.48  644  0.28  1.25 to 1.85  7.40 to 6.86 
 
T. Rowe Price Health Sciences II           
 Division:             
                       2009  342  14.37 to 13.91  4,869  –  1.25 to 1.85  29.69 to 28.92 
                       2008  339  11.08 to 10.79  3,736  –  1.25 to 1.85  (30.05) to (30.48) 
                       2007  245  15.84 to 15.52  3,858  –  1.25 to 1.85  16.24 to 15.54 
                       2006  162  13.62 to 13.43  2,197  –  1.25 to 1.85  7.09 to 6.45 
                       2005 (5)  43  12.72 to 12.62  551  –  1.25 to 1.85  19.54 to 18.94 
 
Templeton Growth Securities           
 Class 2 Division:             
                       2009  92  14.31  1,315  3.15  0.85  29.97 
                       2008  105  11.01  1,158  1.81  0.85  (42.81) 
                       2007  138  19.25  2,663  1.33  0.85  1.48 
                       2006  160  18.97  3,029  1.28  0.85  20.78 
                       2005  146  15.70  2,287  1.07  0.85  7.90 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)         
        For the Year Ended December 31, 
    December 31 Except as Noted 
    Unit Fair Value      Expense   
    Corresponding to  Net  Investment  Ratio (2)   
  Units  Lowest to Highest  Assets  Income  Lowest to   Total Return (3) 
                       Division  (000’s)  Expense Ratio  (000’s)  Ratio (1)  Highest  Lowest to Highest 
 
Van Eck Worldwide Hard Assets           
 Service Class Division:             
                       2009 (11)           82  $13.17 to $13.12   $1,081  –  1.25% to 1.85%  26.63% to 26.28% 

(1)  These amounts represent the dividends, excluding distributions of capital gains, received by the division from the 
  underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These 
  ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. 
  The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the 
  underlying fund in which the subaccounts invest. 
(2)  These ratios represent the annualized contract expenses of Separate Account B, consisting primarily of mortality and 
  expense charges, for each period indicated. The ratios include only those expenses that result in adirect reduction to unit 
  values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying 
  fund are excluded. 
(3)  These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, 
  and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed 
  through the redemption of units; inclusion of these expenses in the calculation would result in areduction in the total 
  return presented. Investment options with adate notation indicate the effective date of that investment option in the 
  variable account. The total return is calculated for the period indicated or from the effective date through the end of the 
  reporting period. These percentages represent the range of total returns available as of the report date and correspond 
  with the expense ratio lowest to highest. 
(4)  These divisions received payment from an affiliate as compensation for foreign income tax credits. The total returns for 
  these divisions would have been lower without the inclusion of the Payment from Affiliate. 
(5)  Commencement of operations, January 4, 2005. 
(6)  Commencement of operations, April 28, 2006. 
(7)  Commencement of operations, January 5, 2007. 
(8)  Commencement of operations, May 1, 2007. 
(9)  Commenced operations May 19, 2008. 
(10)   Commenced operations November 24, 2008. 
(11)   Commenced operations May 18, 2009. 
(12)   Represented the operations of Janus Aspen Mid Cap Growth Service Shares Division until May 18, 2009 name change. 
(13)   Represented the operations of West Coast Equity Division until November 23, 2009 name change. 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued) 
 
There are divisions that have total return outside of the ranges indicated above. The following is 
a list of the divisions and corresponding lowest total return and highest total return. 

                                                                   Division  2009 Unit Value  2009 Total Return 
 
American Century VP Income & Growth Class I Division  $8.44  –% 
Asset Allocation Division  23.21  – 
Balanced Division  1.88 and 17.48  – 
Bond & Mortgage Securities Division  2.09 and 18.89  – 
Diversified International Division  2.28 and 20.97  – 
Equity Income Division  8.02  – 
Government & High Quality Bond Division  2.25 and 19.27  – 
International Emerging Markets Division  31.08  – 
International Small Cap Division  21.74  – 
LargeCap Growth Division  1.66 and 15.81  – 
LargeCap Growth I Division  28.48  – 
LargeCap S&P 500 Index Division  8.51, 8.88 and 9.00  – 
  2.61, 2.71, 5.27,   
LargeCap Value Division  6.16, 8.27 and 8.99  – 
MidCap Blend Division  3.85 and 35.80  – 
    32.72, 33.42 and 
MidCap Growth I Division  10.62 and 11.86  33.94 
MidCap Value II Division  12.17 and 18.45  – 
Money Market Division  1.64 and 14.32  – 
Mortgage Securities Division  –  5.15 and 5.45 
Principal LifeTime Strategic Income Division  10.78  – 
Principal LifeTime 2010 Division  10.88  – 
Principal LifeTime 2020 Division  11.20  – 
Principal LifeTime 2030 Division  10.96  – 
Principal LifeTime 2040 Division  11.02  – 
Principal LifeTime 2050 Division  10.97  – 
Real Estate Securities Division  24.96  – 
Short-Term Income Division  –  8.51 and 8.91 
SmallCap Blend Division  10.14 and 12.95  – 
SmallCap Growth II Division  8.43  – 
SmallCap Value I Division  17.94  – 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)     
 
                                                                   Division  2008 Unit Value  2008 Total Return 
 
American Century VP Income & Growth Class I Division  $7.22                     –% 
Asset Allocation Division  19.78  – 
Balanced Division  1.56 and 14.61  – 
Bond & Mortgage Securities Division  1.74 and 15.82  – 
Diversified International Division  1.80 and 16.48  – 
Equity Income Division  6.77  – 
Government & High Quality Bond Division  2.15 and 18.53  – 
International Emerging Markets Division  18.55  – 
International SmallCap Division  16.33  – 
LargeCap Growth Division  1.32 and 12.61  – 
LargeCap Growth I Division  18.88  – 
LargeCap S&P 500 Index Division  6.82, 7.09 and 7.19  – 
LargeCap Value Division  2.26, 18.56 and 27.22  – 
MidCap Blend Division  2.90 and 27.10  – 
MidCap Growth I Division  7.96 and 8.85  – 
MidCap Value II Division  9.19 and 13.88  – 
Money Market Division  1.65 and 14.47  – 
Principal LifeTime Strategic Income Division  9.17  (25.31) 
Principal LifeTime 2010 Division  8.81  (32.23) 
Principal LifeTime 2020 Division  8.90  (35.39) 
Principal LifeTime 2030 Division  8.65  (37.65) 
Principal LifeTime 2040 Division  8.61  (39.38) 
Principal LifeTime 2050 Division  8.54  (40.23) 
Real Estate Securities Division  19.61  – 
SAM Balanced Portfolio Division  –  (27.63) 
SAM Conservative Balanced Portfolio Division  –  (20.78) 
SAM Conservative Growth Portfolio Division  –  (34.44) 
SAM Flexible Income Portfolio Division  –  (15.41) 
SmallCap Blend Division  8.40 and 10.69  – 
SmallCap Growth II Division  6.48  – 
SmallCap Value I Division  15.63  – 

                                                                   Division  2007 Unit Value  2007 Total Return 
 
AIM V.I. SmallCap Equity Series I Division  $ –  (1.43)% and 3.87% 
American Century VP Income and Growth Class I Division  11.14                         – 
Asset Allocation Division  26.65                         – 
Balanced Division  2.27 and 21.41                         – 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)     
 
                                                                   Division  2007 Unit Value  2007 Total Return 
 
Bond Division  $2.11 and $19.32  –% 
Capital Value Division  3.51, 28.99 and 42.27  – 
Diversified International Division  3.36 and 31.03  – 
Equity Growth Division  32.19  2.66 and 2.73 
Equity Income I Division  10.38  – 
Government & High Quality Bond Division  2.20 and 19.07  – 
Growth Division  2.33 and 22.46  – 
International Emerging Markets Division  41.62  – 
International SmallCap Division  33.26  – 
  10.98, 11.37 and   
LargeCap Stock Index Division  11.55  – 
MidCap Division  4.41 and 41.53  – 
MidCap Growth Division  13.69 and 15.16  – 
MidCap Value Division  16.60 and 24.95  – 
Money Market Division  1.62 and 14.28  – 
Principal LifeTime Strategic Income Division  12.20  – 
Principal LifeTime 2010 Division  12.91  – 
Principal LifeTime 2020 Division  13.68  – 
Principal LifeTime 2030 Division  13.78  – 
Principal LifeTime 2040 Division  14.11  – 
Principal LifeTime 2050 Division  14.20  – 
Real Estate Securities Division  29.57  – 
SAM Balanced Portfolio Division  10.27  – 
SAM Conservative Balanced Portfolio Division  10.24  – 
SAM Conservative Growth Portfolio Division  10.27  – 
SAM Flexible Income Portfolio Division  10.18  – 
SAM Strategic Growth Portfolio Division  –  2.54 
SmallCap Division  13.45 and 17.04  – 
SmallCap Growth Division  11.15  – 
SmallCap Value Division  23.22  – 
 
 
                                                                   Division  2006 Unit Value  2006 Total Return 
 
American Century VP Income & Growth Class I Division  $11.25  4.83% 
Asset Allocation Division  24.14  – 
Balanced Division  2.17 and 20.58  – 
Bond Division  2.05 and 18.92  0.35 
Capital Value Division  3.53, 29.38 and 42.51  4.47 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)     
 
 
Division  2006 Unit Value  2006 Total Return 
 
Diversified International Division  $2.91 and $27.07  6.56% 
Equity Growth Division  30.04  – 
Government & High Quality Bond Division  2.11 and 18.41  0.29 
Growth Division  1.90 and 18.46  – 
International Emerging Markets Division  29.66  – 
International SmallCap Division  30.83  – 
  10.57, 10.90 and   
LargeCap Stock Index Division  11.09  3.93 
MidCap Division  4.05 and 38.42  4.32 
MidCap Growth Division  12.51 and 13.80  3.76 
MidCap Value Division  16.98 and 25.43  4.92 
Money Market Division  1.55 and 13.79  0.60 
Principal LifeTime Strategic Income Division  12.10  8.89 
Principal LifeTime 2010 Division  12.60  10.91 
Principal LifeTime 2020 Division  13.21  13.73 
Principal LifeTime 2030 Division  13.17  13.40 
Principal LifeTime 2040 Division  13.41  13.70 
Principal LifeTime 2050 Division  13.48  14.06 
Real Estate Securities Division  36.38  3.71 
Short-Term Bond Division  –  0.44 
SmallCap Division  13.40 and 16.90  4.60 
SmallCap Growth Division  10.76  3.49 
SmallCap Value Division  25.99  4.97 

Division  2005 Unit Value  2005 Total Return 
 
Asset Allocation Division  $21.67                       –% 
Balanced Division  1.96 and 18.70  – 
Bond Division  1.97 and 18.30  2.60 
Capital Value Division  2.96, 24.80 and 35.61  3.17 and 2.66 
Diversified International Division  2.29 and 21.42  17.96 and 17.37 
Equity Growth Division  28.64  11.77 and 12.33 
Fidelity VIP Equity – Income Service Class 2 Division  –  4.26 and 3.06 
Government & High Quality Bond Division  2.04 and 17.89  1.49 
Growth Division  1.74 and 17.01  – 
International Emerging Markets Division  21.71  – 
International SmallCap Division  23.95  – 


Principal Life Insurance Company 
Separate Account B
 
Notes to Financial Statements (continued) 

6. Financial Highlights (continued)     
 
 
                                                                   Division  2005 Unit Value  2005 Total Return 
 
LargeCap Blend Division  $–  3.69% and 2.82% 
LargeCap Stock Index Division  9.26 and 9.51  – 
LargeCap Value Division  –  2.08 and 4.13 
MidCap Division  3.57 and 34.06  8.84 
MidCap Growth Division  11.56 and 12.69  – 
MidCap Value Division  15.18 and 22.64  – 
Money Market Division  1.49 and 13.34  – 
Real Estate Securities Division  26.97  19.86 and 20.46 
Short-Term Bond Division  –  (0.06) and 0.96 
SmallCap Division  12.04 and 15.13  – 
SmallCap Growth Division  10.00  6.53 and 7.06 
SmallCap Value Division  22.18  5.94 


Report of Independent Registered Public Accounting Firm 

The Board of Directors and Stockholder 
Principal Life Insurance Company 

                   We have audited the accompanying consolidated statements of financial position of Principal Life Insurance Company 
(“the Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholder’s equity 
and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the 
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on 
our audits. 
 
                   We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board 
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 
financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal 
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for 
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit 
also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 
assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial 
statement presentation. We believe that our audits provide a reasonable basis for our opinion. 
 
                   In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated 
financial position of Principal Life Insurance Company at December 31, 2009 and 2008, and the consolidated results of its 
operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. 
generally accepted accounting principles. 
 
                   As discussed in Note 1 to the consolidated financial statements, in response to new accounting standards, the Company 
changed its methods of accounting for other-than-temporary impairments on debt securities and for the treatment of 
noncontrolling interests effective January 1, 2009, and for the accounting for its pension and other postretirement benefits 
effective January 1, 2008. 

/s/ Ernst & Young LLP 

Des Moines, Iowa 
March 15, 2010 


Principal Life Insurance Company
Consolidated Statements of Financial Position
 
  December 31, 
  2009  2008 
        (in millions) 
Assets     
Fixed maturities, available-for-sale  $ 43,518.4  $ 38,064.0 
Fixed maturities, trading  484.8  752.1 
Equity securities, available-for-sale  211.7  234.2 
Equity securities, trading  177.2  125.7 
Mortgage loans  11,250.5  12,633.8 
Real estate  1,022.2  915.2 
Policy loans  881.3  881.4 
Other investments  1,398.5  2,081.8 
   Total investments  58,944.6  55,688.2 
Cash and cash equivalents  2,044.5  2,536.7 
Accrued investment income  681.7  744.0 
Premiums due and other receivables  1,011.2  938.2 
Deferred policy acquisition costs  3,454.8  3,970.1 
Property and equipment  466.0  494.0 
Goodwill  258.2  258.2 
Other intangibles  145.7  187.7 
Separate account assets  57,380.8  51,069.2 
Other assets  1,311.3  3,237.3 
   Total assets  $ 125,698.8  $ 119,123.6 
 
Liabilities     
Contractholder funds  $ 39,764.7  $ 43,046.4 
Future policy benefits and claims  15,944.4  15,974.2 
Other policyholder funds  539.7  518.5 
Short-term debt  312.1  291.1 
Long-term debt  120.8  121.2 
Income taxes currently payable  1.9  4.1 
Deferred income taxes  4.9  4.2 
Separate account liabilities  57,380.8  51,069.2 
Other liabilities  5,162.6  5,952.9 
   Total liabilities  119,231.9  116,981.8 
Stockholder’s equity     
Common stock, par value $1 per share — 5.0 million shares authorized, 2.5 million shares     
   issued and outstanding (wholly owned indirectly by Principal Financial Group, Inc.)  2.5  2.5 
Additional paid-in capital  6,408.9  5,626.6 
Retained earnings  1,024.3  1,158.5 
Accumulated other comprehensive loss  (1,086.8)  (4,737.6) 
   Total stockholder’s equity attributable to Principal Life Insurance Company  6,348.9  2,050.0 
Noncontrolling interest  118.0  91.8 
   Total stockholder’s equity  6,466.9  2,141.8 
   Total liabilities and stockholder’s equity  $ 125,698.8  $ 119,123.6 
 
See accompanying notes.     


Principal Life Insurance Company
Consolidated Statements of Operations
 
  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Revenues       
Premiums and other considerations  $ 3,511.5  $ 4,005.1  $ 4,387.7 
Fees and other revenues  1,619.0  1,849.5  1,996.8 
Net investment income  3,188.2  3,472.0  3,552.5 
Net realized capital gains (losses), excluding impairment losses on available-for-sale       
   securities  6.2  (144.9)  (34.3) 
Total other-than-temporary impairment losses on available-for-sale securities  (712.4)  (477.7)  (314.1) 
Portion of impairment losses on fixed maturities, available-for-sale recognized in other       
   comprehensive income  260.9  —  — 
Net impairment losses on available-for-sale securities  (451.5)  (477.7)  (314.1) 
Net realized capital losses  (445.3)  (622.6)  (348.4) 
   Total revenues  7,873.4  8,704.0  9,588.6 
Expenses       
Benefits, claims and settlement expenses  5,005.9  5,634.0  5,908.6 
Dividends to policyholders  242.2  267.3  293.8 
Operating expenses  1,975.1  2,345.7  2,441.1 
   Total expenses  7,223.2  8,247.0  8,643.5 
Income from continuing operations before income taxes  650.2  457.0  945.1 
Income taxes  124.8  44.3  201.2 
Income from continuing operations, net of related income taxes  525.4  412.7  743.9 
Income from discontinued operations, net of related income taxes  —  —  20.2 
Net income  525.4  412.7  764.1 
Net income attributable to noncontrolling interest  23.0  9.6  23.0 
Net income attributable to Principal Life Insurance Company  $ 502.4  $ 403.1  $ 741.1 
 
See accompanying notes.       


                                                                                                     Principal Life Insurance Company       
                                                                                   Consolidated Statements of Stockholder’s Equity     
        Accumulated     
    Additional    other    Total 
  Common  paid-in  Retained  comprehensive   Noncontrolling  stockholder’s 
  stock  capital  earnings  income (loss)  interest  equity 
  (in millions)
Balances at January 1, 2007  $ 2.5  $ 5,515.3  $ 670.9  $ 612.6  $ 52.6  $ 6,853.9 
Contributions from parent  —             13.9  —  —             —  13.9 
Capital transactions of equity method investee, net of related income taxes  —  1.1  —  —             —  1.1 
Stock-based compensation and additional related tax benefits  —             65.6           (1.2)  —             —  64.4 
Dividends to parent  —             —  (650.0)  —             —  (650.0) 
Distributions to noncontrolling interest  —             —  —  —             (13.1)  (13.1) 
Contributions from noncontrolling interest  —             —  —  —             27.4  27.4 
Comprehensive income:             
   Net income  —             —  741.1  —             23.0  764.1 
   Net unrealized losses, net  —             —  —  (550.8)             —  (550.8) 
   Foreign currency translation adjustment, net of related income taxes  —             —  —  3.0             —  3.0 
   Unrecognized postretirement benefit obligation, net of related income taxes  —             —  —                     52.7             —  52.7 
Comprehensive income            269.0 
Balances at December 31, 2007  2.5  5,595.9  760.8  117.5             89.9  6,566.6 
Return of capital to parent  —             (5.2)  —  —             —  (5.2) 
Capital transactions of equity method investee, net of related income taxes  —  0.6  —  —             —  0.6 
Stock-based compensation and additional related tax benefits  —             35.3           (0.8)  —             —  34.5 
Dividends to parent  —             —           (5.5)  —             —  (5.5) 
Distributions to noncontrolling interest  —             —  —  —             (14.7)  (14.7) 
Contributions from noncontrolling interest  —             —  —  —  7.0  7.0 
Effects of changing postretirement benefit plan measurement date, net of related             
   income taxes  —             —             0.9                     (2.0)             —  (1.1) 
Comprehensive loss:             
   Net income  —             —  403.1  —  9.6  412.7 
   Net unrealized losses, net  —             —  —  (4,205.1)             —  (4,205.1) 
   Foreign currency translation adjustment, net of related income taxes  —             —  —  (15.5)             —  (15.5) 
   Unrecognized postretirement benefit obligation, net of related income taxes  —             —  —  (632.5)             —  (632.5) 
Comprehensive loss            (4,440.4) 
Balances at December 31, 2008  2.5  5,626.6  1,158.5  (4,737.6)             91.8  2,141.8 
Contributions from parent  —  795.9  —  —             —  795.9 
Stock-based compensation and additional related tax benefits  —             32.3           (1.5)  —             —  30.8 
Dividends to parent  —             —  (645.0)  —             —  (645.0) 
Distributions to noncontrolling interest  —             —  —  —             (7.1)  (7.1) 
Contributions from noncontrolling interest  —             —  —  —             10.1  10.1 
Purchase of subsidiary shares from noncontrolling interest  —  (45.9)  —  —               0.2  (45.7) 
Effects of reclassifying noncredit component of previously recognized             
   impairment losses on fixed maturities, available-for-sale, net  —             —             9.9                     (9.9)             —  — 
Comprehensive income:             
   Net income  —             —  502.4  —             23.0  525.4 
   Net unrealized gains, net  —             —  —  3,620.9             —  3,620.9 
   Noncredit component of impairment losses on fixed maturities, available-for-             
sale, net  —             —  —  (152.9)             —  (152.9) 
   Foreign currency translation adjustment, net of related income taxes  —             —  —                     21.6             —  21.6 
   Unrecognized postretirement benefit obligation, net of related income taxes  —             —  —  171.1             —  171.1 
Comprehensive income            4,186.1 
Balances at December 31, 2009  $ 2.5  $ 6,408.9  $ 1,024.3  $ (1,086.8)  $ 118.0  $ 6,466.9 
 
 
See accompanying notes.             


Principal Life Insurance Company
Consolidated Statements of Cash Flows
 
             For the year ended December 31, 
    2009  2008  2007 
    (in millions)
Operating activities         
Net income  $ 525.4  $ 412.7  $ 764.1 
Adjustments to reconcile net income to net cash provided by operating         
   activities:         
   Income from discontinued operations, net of related income taxes           —  —  (20.2) 
   Amortization of deferred policy acquisition costs    93.9  375.0  351.4 
   Additions to deferred policy acquisition costs    (454.3)  (637.9)  (568.8) 
   Accrued investment income    62.3  22.3  (52.6) 
   Net cash flows for trading securities    299.9  (457.9)  (180.7) 
   Premiums due and other receivables    (124.6)  (74.9)  (136.6) 
   Contractholder and policyholder liabilities and dividends    1,422.3  2,010.4  1,912.4 
   Current and deferred income taxes (benefits)    35.4  (194.3)  (105.8) 
   Net realized capital losses    445.3  622.6  348.4 
   Depreciation and amortization expense    98.4  91.4  88.8 
   Mortgage loans held for sale, acquired or originated    (3.0)  (36.8)  (27.2) 
   Mortgage loans held for sale, sold or repaid, net of gain    17.5  18.1  104.2 
   Real estate acquired through operating activities    (19.8)  (77.5)  (48.2) 
   Real estate sold through operating activities    5.2  24.5  43.7 
   Stock-based compensation    30.0  23.2  59.7 
   Other    152.4  (58.9)  (108.9) 
Net adjustments    2,060.9  1,649.3  1,659.6 
Net cash provided by operating activities    2,586.3  2,062.0  2,423.7 
Investing activities         
Available-for-sale securities:         
   Purchases    (7,046.2)  (6,179.9)  (10,223.8) 
   Sales    3,115.5  1,087.1  2,858.5 
   Maturities    4,128.8  3,039.4  4,278.2 
Mortgage loans acquired or originated    (514.8)  (3,395.7)  (3,043.8) 
Mortgage loans sold or repaid    1,615.4  2,791.1  1,996.5 
Real estate acquired    (62.2)  (33.3)  (115.2) 
Real estate sold    25.3  68.7  50.8 
Net purchases of property and equipment    (17.9)  (104.1)  (74.5) 
Purchases of interest in subsidiaries, net of cash acquired    (45.7)  (18.0)  (7.0) 
Net change in other investments    (8.7)  (31.5)  16.3 
Net cash provided by (used in) investing activities  $ 1,189.5  $ (2,776.2)  $ (4,264.0) 


Principal Life Insurance Company
Consolidated Statements of Cash Flows — (continued)
 
           For the year ended December 31, 
    2009  2008  2007 
    (in millions)
Financing activities         
Proceeds from financing element derivatives    $ 122.0  $ 142.2  $ 128.7 
Payments for financing element derivatives    (67.4)  (114.6)  (137.2) 
Excess tax benefits from share-based payment arrangements    0.2  2.7  9.6 
Dividends to parent    (645.0)  (5.5)  (650.0) 
Capital contributions from (to) parent    795.9  (5.2)  13.9 
Issuance of long-term debt    —  0.1  0.2 
Principal repayments of long-term debt    (0.4)  (65.8)  (69.4) 
Net proceeds (repayments) of short-term borrowings    21.0  (53.3)  (67.7) 
Investment contract deposits    4,220.2  11,349.0  9,958.9 
Investment contract withdrawals    (8,752.7)  (9,813.7)  (8,209.9) 
Net increase in banking operation deposits    43.9  373.1  417.1 
Other    (5.7)  (5.4)  (5.3) 
Net cash provided by (used in) financing activities    (4,268.0)  1,803.6  1,388.9 
Discontinued operations         
Net cash provided by operating activities    —  —  2.5 
Net cash used in investing activities    —  —  (1.3) 
Net cash used in financing activities    —  —  (0.5) 
Net cash provided by discontinued operations    —  —  0.7 
Net increase (decrease) in cash and cash equivalents    (492.2)  1,089.4  (450.7) 
Cash and cash equivalents at beginning of year    2,536.7  1,447.3  1,898.0 
Cash and cash equivalents at end of year    $ 2,044.5  $ 2,536.7  $ 1,447.3 
 
Cash and cash equivalents of discontinued operations included above         
At beginning of year     $ — $ —  $ (0.7) 
At end of year     $ — $ —  $ — 
 
Supplemental Information:         
Cash paid for interest  $ 14.7  $ 15.2  $ 20.7 
Cash paid for income taxes  $ 107.1  $ 227.5  $ 246.4 
 
See accompanying notes.         


Principal Life Insurance Company 
Notes to Consolidated Financial Statements 
December 31, 2009

1. Nature of Operations and Significant Accounting Policies 
Description of Business 

                   Principal Life Insurance Company along with its consolidated subsidiaries is a diversified financial services 
organization engaged in promoting retirement savings and investment and insurance products and services in the U.S. We are a 
direct wholly owned subsidiary of Principal Financial Services, Inc. (“PFSI”), which in turn is a direct wholly owned subsidiary 
of Principal Financial Group, Inc. (“PFG”). 
 
Basis of Presentation 
 
                   The accompanying consolidated financial statements, which include our majority-owned subsidiaries and consolidated 
variable interest entities (“VIEs”), have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. 
GAAP”). Less than majority-owned entities in which we have at least a 20% interest and limited liability companies (“LLCs”), 
partnerships and real estate joint ventures in which we have at least a 5% interest, are reported on the equity basis in the 
consolidated statements of financial position as other investments. Investments in LLCs, partnerships and real estate joint 
ventures in which we have an ownership percentage of 3% to 5% are accounted for under the equity or cost method depending 
upon the specific facts and circumstances of our ownership and involvement. All significant intercompany accounts and 
transactions have been eliminated. Information included in the notes to the financial statements excludes information applicable 
to less than majority-owned entities reported on the equity and cost methods, unless otherwise noted. 
 
                   We have evaluated subsequent events through March 15, 2010, which was the date our consolidated financial 
statements were issued. 
 
                   Reclassifications have been made to prior period financial statements to conform to the December 31, 2009, 
presentation. See Recent Accounting Pronouncements for impact of new accounting guidance on prior period financial 
statements. 
 
Closed Block 
 
                   We operate a closed block (“Closed Block”) for the benefit of individual participating dividend-paying policies in force 
at the time of the 1998 mutual insurance holding company (“MIHC”) formation. See Note 8, Closed Block, for further details. 
 
Recent Accounting Pronouncements 
 
                   In January 2010, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that requires new 
disclosures related to fair value measurements and clarifies existing disclosure requirements about the level of disaggregation, 
inputs and valuation techniques. Specifically, reporting entities now must disclose separately the amounts of significant transfers 
in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition, in the 
reconciliation for Level 3 fair value measurements, a reporting entity should present separately information about purchases, 
sales, issuances and settlements. The guidance clarifies that a reporting entity needs to use judgment in determining the 
appropriate classes of assets and liabilities for disclosure of fair value measurement, considering the level of disaggregated 
information required by other applicable U.S. GAAP guidance and should also provide disclosures about the valuation 
techniques and inputs used to measure fair value for each class of assets and liabilities. This guidance will be effective for us on 
January 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the reconciliation for Level 3 fair 
value measurements, which will be effective for us on January 1, 2011. This guidance will not have a material impact on our 
consolidated financial statements. 
 
                   In September 2009, FASB issued authoritative guidance for measuring the fair value of certain alternative investments 
and to offer investors a practical means for measuring the fair value of investments in certain entities that calculate net asset 
value per share. This guidance was effective for us on October 1, 2009, and did not have a material impact on our consolidated 
financial statements. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   In August 2009, the FASB issued authoritative guidance to provide additional guidance on measuring the fair value of 
liabilities. This guidance clarifies that the quoted price for the identical liability, when traded as an asset in an active market, is 
also a Level 1 measurement for that liability when no adjustment to the quoted price is required. In the absence of a quoted price 
in an active market, an entity must use one or more of the following valuation techniques to estimate fair value: (1) a valuation 
technique that uses a quoted price (a) of an identical liability when traded as an asset or (b) of a similar liability when traded as 
an asset; or (2) another valuation technique such as (a) a present value technique or (b) a technique based on the amount an 
entity would pay to transfer the identical liability or would receive to enter into an identical liability. This guidance was effective 
for us on October 1, 2009, and did not have a material impact on our consolidated financial statements. 
 
                   In June 2009, the FASB issued authoritative guidance for the establishment of the FASB Accounting Standards 
CodificationTM (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by 
nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive 
releases of the United States Securities and Exchange Commission (“SEC”) under federal securities laws are also sources of 
authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. 
This guidance was effective for us on July 1, 2009, and did not have a material impact on our consolidated financial statements. 
 
                   In June 2009, the FASB issued authoritative guidance to improve the relevance, representational faithfulness, and 
comparability of the information that a reporting entity provides in its financial reports about a transfer of financial assets; the 
effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement 
in transferred financial assets. The most significant change is the elimination of the concept of a qualifying special-purpose 
entity. Therefore, formerly qualifying special-purpose entities (as defined under previous accounting standards) should be 
evaluated for consolidation by reporting entities on and after the effective date in accordance with the applicable 
consolidation guidance. This guidance will be effective for us on January 1, 2010, and is not expected to have a material 
impact on our consolidated financial statements. 
 
                   Also in June 2009, the FASB issued authoritative guidance related to the accounting for VIEs, which amends prior 
guidance and requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests 
give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that 
has (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) 
the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from 
the entity that could potentially be significant to the VIE. In addition, this guidance requires ongoing reassessments of 
whether an enterprise is the primary beneficiary of a VIE. Furthermore, we are required to enhance disclosures that will 
provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE. The 
enhanced disclosures are required for any enterprise that holds a variable interest in a VIE. This guidance will be effective for 
us on January 1, 2010, and will result in the consolidation of additional entities in our consolidated financial statements and 
additional required disclosures. We do not anticipate these changes will have a material impact on our consolidated financial 
statements. On February 25, 2010, the FASB issued an amendment to this guidance. The amendment indefinitely defers the 
consolidation requirements for reporting enterprises’ interests in entities that have the characteristics of investment 
companies and regulated money market funds. The amendment will be effective for us on January 1, 2010. 
 
                   In April 2009, the FASB issued authoritative guidance which relates to the recognition and presentation of an other- 
than-temporary impairment (“OTTI”) of securities and requires additional disclosures. The recognition provisions apply only 
to debt securities classified as available-for-sale and held-to-maturity, while the presentation and disclosure requirements 
apply to both debt and equity securities. An impaired debt security will be considered other-than-temporarily impaired if a 
holder has the intent to sell, or it more likely than not will be required to sell prior to recovery of the amortized cost. If a 
holder of a debt security does not expect recovery of the entire cost basis, even if there is no intention to sell the security, it 
will be considered an OTTI as well. This guidance also changes how an entity recognizes an OTTI for a debt security by 
separating the loss between the amount representing the credit loss and the amount relating to other factors, if a holder does 
not have the intent to sell or it more likely than not will not be required to sell prior to recovery of the amortized cost less any 
current period credit loss. Credit losses will be recognized in net income and losses relating to other factors will be 
recognized in other comprehensive income (“OCI”). If the holder has the intent to sell or it more likely than not will be 
required to sell before its recovery of amortized cost less any current period credit loss, the entire OTTI will continue to be 
recognized in net income. Furthermore, this guidance requires a cumulative effect adjustment to the opening balance of 
retained earnings in the period of adoption with a corresponding adjustment to accumulated OCI. We adopted this guidance 
effective January 1, 2009. The cumulative change in accounting principle from adopting this guidance resulted in a net $9.9 
million increase to retained earnings and a corresponding decrease to accumulated OCI. The required disclosures have been 
included in our consolidated financial statements. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   Also in April 2009, the FASB issued authoritative guidance which provides additional information on estimating fair 
value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market 
activity for the asset or liability and clarifies that the use of multiple valuation techniques may be appropriate. It also provides 
additional guidance on circumstances that may indicate a transaction is not orderly. Further, it requires additional disclosures 
about fair value measurements in annual and interim reporting periods. We adopted this guidance effective January 1, 2009, and 
it did not have a material impact on our consolidated financial statements. See Note 16, Fair Value of Financial Instruments, for 
further details. 
 
                   In January 2009, the FASB issued authoritative guidance related to the assessment of the OTTI of certain beneficial 
interests in securitized financial assets, which eliminated the requirement that a financial instrument holder’s best estimate of 
cash flows be based upon those that a market participant would use. Instead, this guidance requires the use of management’s 
judgment in the determination of whether it is probable there has been an adverse change in estimated cash flow. This guidance 
was effective for us on October 1, 2008, and did not have a material impact on our consolidated financial statements. 
 
                   In December 2008, the FASB issued authoritative guidance requiring additional disclosures by public entities with 
continuing involvement in transfers of financial assets to special purpose entities and with variable interests in VIEs. This 
guidance was effective for us on October 1, 2008. We have included the required disclosures in our consolidated financial 
statements. See Note 5, Variable Interest Entities for further details. 
 
                   In September 2008, the FASB issued authoritative guidance (1) requiring disclosures by sellers of credit derivatives, 
including credit derivatives embedded in a hybrid instrument and (2) requiring an additional disclosure about the current 
status of the payment/performance risk of a guarantee. This guidance was effective for us on October 1, 2008. We have 
included the required disclosures in our consolidated financial statements. See Note 7, Derivative Financial Instruments, for 
further details relating to our credit derivatives. 
 
                   In March 2008, the FASB issued authoritative guidance requiring (1) qualitative disclosures about objectives and 
strategies for using derivatives, (2) quantitative disclosures about fair value amounts of gains and losses on derivative 
instruments and related hedged items and (3) disclosures about credit-risk-related contingent features in derivative instruments. 
The disclosures are intended to provide users of financial statements with an enhanced understanding of how and why derivative 
instruments are used, how they are accounted for and the financial statement impacts. We adopted these changes on January 1, 
2009. See Note 7, Derivative Financial Instruments, for further details. 
 
                   In December 2007, the FASB issued authoritative guidance requiring that the acquiring entity in a business 
combination establish the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, 
including any noncontrolling interests, and requires the acquirer to disclose additional information needed to more 
comprehensively evaluate and understand the nature and financial effect of the business combination. In addition, direct 
acquisition costs are to be expensed. We adopted this guidance on January 1, 2009, and all requirements are applied 
prospectively. 
 
                   Also in December 2007, the FASB issued authoritative guidance mandating the following changes to noncontrolling 
interests:   
 
                   (1)  Noncontrolling interests are to be treated as a separate component of equity, rather than as a liability or other item 
  outside of equity. 
                   (2)  Net income includes the total income of all consolidated subsidiaries, with separate disclosures on the face of the 
  statement of operations of the income attributable to controlling and noncontrolling interests. Previously, net 
  income attributable to the noncontrolling interest was reported as an operating expense in arriving at consolidated 
  net income. 
                   (3)  This guidance revises the accounting requirements for changes in a parent’s ownership interest when the parent 
  retains control and for changes in a parent’s ownership interest that results in deconsolidation. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   We adopted this guidance on January 1, 2009. Presentation and disclosure requirements have been applied 
retrospectively for all periods presented. All other requirements have been applied prospectively. Certain separate account 
arrangements involve ownership of mutual funds to support the investment objective of the separate account. It is possible that, 
through a separate account arrangement, greater than 50% of the mutual fund shares could be owned. The accounting guidance 
for this circumstance is not well defined, but we, like many other insurers, do not consolidate the mutual fund as we believe the 
arrangement qualifies for the exemption afforded investment companies. In September 2009, the FASB issued proposed 
guidance addressing an insurer’s accounting for majority-owned investments through a separate account. The comment period 
for this proposed guidance ended on October 26, 2009, and while the final outcome is still uncertain, the guidance as exposed 
supports our position. 
 
                   In February 2007, the FASB issued authoritative guidance permitting entities to choose, at specified election dates, to 
measure eligible financial instruments and certain other items at fair value that are not currently required to be reported at fair 
value. Unrealized gains and losses on items for which the fair value option is elected shall be reported in net income. The 
decision about whether to elect the fair value option (1) is applied instrument by instrument, with certain exceptions (2) is 
irrevocable and (3) is applied to an entire instrument and not only to specified risks, specific cash flows, or portions of that 
instrument. This guidance also requires additional disclosures that are intended to facilitate comparisons between entities that 
choose different measurement attributes for similar assets and liabilities and between assets and liabilities in the financial 
statements of an entity that selects different measurement attributes for similar assets and liabilities. At the effective date, the fair 
value option may be elected for eligible items that exist at that date and the effect of the first remeasurement to fair value for 
those items should be reported as a cumulative effect adjustment to retained earnings. We adopted this guidance on January 1, 
2008, and the resulting cumulative effect of the change in accounting principle was immaterial. Therefore, the pre-tax 
cumulative effect of the change in accounting principle is reflected in net realized capital gains (losses). Election of this option 
upon acquisition or assumption of eligible items could introduce period to period volatility in net income. 
 
                   In September 2006, the FASB issued authoritative guidance related to defined benefit pension plans and other 
postretirement benefit plans, which eliminated the ability to choose a measurement date by requiring that plan assets and benefit 
obligations be measured as of the annual balance sheet date. This guidance was effective for us on December 31, 2008. For 
2007, we used a measurement date of October 1 for the measurement of plan assets and benefit obligations. Two transition 
methods were available when implementing the change in measurement date for 2008. We chose the alternative that allowed us 
to use the October 1, 2007, measurement date as a basis for determining the 2008 expense and transition adjustment. The effect 
of changing the measurement date resulted in a $0.9 million increase to retained earnings and a $2.0 million decrease to 
accumulated OCI in the first quarter of 2008. 
 
                   In September 2006, the FASB issued authoritative guidance for using fair value to measure assets and liabilities, which 
applies whenever other standards require or permit assets or liabilities to be measured at fair value, but does not expand the use 
of fair value measurement. This guidance establishes a fair value hierarchy that gives the highest priority to quoted prices in 
active markets and the lowest priority to unobservable data, and requires fair value measurements to be separately disclosed by 
level within the hierarchy. In February 2008, the FASB deferred the effective date of this guidance for one year for nonfinancial 
assets and nonfinancial liabilities that are recognized or disclosed at fair value on a nonrecurring basis. In February 2008, the 
FASB issued authoritative guidance excluding instruments covered by lease accounting and its related interpretive guidance 
from the scope of its fair value measurement guidance. In October 2008, the FASB issued authoritative guidance which clarifies 
the application of its fair value measurement guidance in an inactive market and provides an illustrative example to demonstrate 
how the fair value of a financial asset is determined when the market for that financial asset is inactive. Our adoption of the 
FASB’s fair value measurement guidance on January 1, 2008, for assets and liabilities measured at fair value on a recurring 
basis and financial assets and liabilities measured at fair value on a nonrecurring basis did not have a material impact on our 
consolidated financial statements. We deferred the adoption for nonfinancial assets and liabilities measured at fair value on a 
nonrecurring basis until January 1, 2009, which also did not have a material impact on our consolidated financial statements. See 
Note 16, Fair Value of Financial Instruments, for further details. 
 
                   In July 2006, the FASB issued authoritative guidance prescribing a recognition threshold and measurement attribute 
for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. This 
guidance requires the affirmative evaluation that it is more likely than not, based on the technical merits of a tax position, that 
an enterprise is entitled to economic benefits resulting from positions taken in income tax returns. If a tax position does not 
meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. 
In addition, this guidance requires companies to disclose additional quantitative and qualitative information in their financial 
statements about uncertain tax positions. We adopted this guidance on January 1, 2007, which did not have a material impact 
on our consolidated financial statements. See Note 12, Income Taxes, for further details. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
  In March 2006, the FASB issued authoritative guidance which (1) requires an entity to recognize a servicing asset or 
liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in specified 
situations, (2) requires all separately recognized servicing assets and liabilities to be initially measured at fair value, (3) for 
subsequent measurement of each class of separately recognized servicing assets and liabilities, an entity can elect either the 
amortization or fair value measurement method, (4) permits a one-time reclassification of available-for-sale securities to trading 
securities by an entity with recognized servicing rights, without calling into question the treatment of other available-for-sale 
securities, provided the available-for-sale securities are identified in some manner as offsetting the entity's exposure to changes 
in fair value of servicing assets or liabilities that a servicer elects to subsequently measure at fair value, and (5) requires separate 
presentation of servicing assets and liabilities measured at fair value in the statement of financial position and also requires 
additional disclosures. For us, the initial measurement requirements of this statement should be applied prospectively to all 
transactions entered into after January 1, 2007. The election related to the subsequent measurement of servicing assets and 
liabilities was also effective for us on January 1, 2007. We did not elect to subsequently measure any of our servicing rights at 
fair value or reclassify any available-for-sale securities to trading. 
 
  In February 2006, the FASB issued authoritative guidance which (1) permits fair value remeasurement for any hybrid 
financial instrument that contains an embedded derivative that otherwise would require bifurcation, (2) clarifies which interest- 
only and principal-only strips are not subject to the requirements of derivative accounting guidance (3) establishes a requirement 
to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid 
financial instruments that contain an embedded derivative requiring bifurcation, (4) clarifies that concentrations of credit risk in 
the form of subordination are not embedded derivatives and (5) eliminates the prohibition on a qualifying special-purpose entity 
from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial 
instrument. For us, this guidance was effective for all financial instruments acquired or issued after January 1, 2007. At adoption, 
the fair value election could also be applied to hybrid financial instruments that had been bifurcated under derivative accounting 
guidance prior to adoption of this guidance. We adopted this guidance on January 1, 2007, and did not apply the fair value 
election to any existing hybrid financial instruments that had been bifurcated. 
 
  In September 2005, the AICPA issued authoritative guidance relating to accounting for deferred policy acquisition 
costs (“DPAC”) when insurance or investment contracts are modified or exchanged. An internal replacement of an insurance or 
investment contract is defined as a modification in product benefits, features, rights, or coverages that occurs by the exchange of 
a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage 
within a contract. An internal replacement that is determined to result in a replacement contract that is substantially unchanged 
from the replaced contract should be accounted for as a continuation of the replaced contract. Contract modifications resulting in 
a replacement contract that is substantially changed from the replaced contract should be accounted for as an extinguishment of 
the replaced contract and any unamortized DPAC, unearned revenue liabilities, and deferred sales inducement costs from the 
replaced contract should be written off and acquisition costs on the new contracts deferred as appropriate. This guidance was 
effective for internal replacements occurring prospectively beginning in 2007. Adoption of this guidance did not have a material 
impact on our consolidated financial statements. 
 
Use of Estimates in the Preparation of Financial Statements 
 
  The preparation of our consolidated financial statements and accompanying notes requires management to make 
estimates and assumptions that affect the amounts reported and disclosed. These estimates and assumptions could change in the 
future as more information becomes known, which could impact the amounts reported and disclosed in the consolidated 
financial statements and accompanying notes. The most critical estimates include those used in determining: 
 
         •  the fair value of investments in the absence of quoted market values; 
         •  investment impairments; 
         •  the fair value of and accounting for derivatives; 
         •  the DPAC and other actuarial balances where the amortization is based on estimated gross profits; 
         •  the measurement of goodwill, indefinite lived intangible assets, finite lived intangible assets and related 
  impairments, if any; 
         •  the liability for future policy benefits and claims; 
         •  the value of our pension and other postretirement benefit obligations and 
         •  accounting for income taxes and the valuation of deferred tax assets. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   A description of such critical estimates is incorporated within the discussion of the related accounting policies which 
follow. In applying these policies, management makes subjective and complex judgments that frequently require estimates 
about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the 
insurance and financial services industries; others are specific to our businesses and operations. Actual results could differ 
from these estimates. 
 
Cash and Cash Equivalents 
 
                   Cash and cash equivalents include cash on hand, money market instruments and other debt issues with a maturity date 
of three months or less when purchased. 
Investments 
 
                   Fixed maturity securities include bonds, mortgage-backed securities, redeemable preferred stock and certain 
nonredeemable preferred stock. Equity securities include mutual funds, common stock and nonredeemable preferred stock. We 
classify fixed maturity securities and equity securities as either available-for-sale or trading at the time of the purchase and, 
accordingly, carry them at fair value. See Note 16, Fair Value of Financial Instruments, for policies related to the determination 
of fair value. Unrealized gains and losses related to available-for-sale securities, excluding those in fair value hedging 
relationships, are reflected in stockholder’s equity, net of adjustments related to DPAC, sales inducements, unearned revenue 
reserves, derivatives in cash flow hedge relationships and applicable income taxes. Unrealized gains and losses related to 
available-for-sale securities in fair value hedging relationships and mark-to-market adjustments on certain trading securities are 
reflected in net realized capital gains (losses). We also have trading securities portfolios that support investment strategies that 
involve the active and frequent purchase and sale of fixed maturity securities. Mark-to-market adjustments related to these 
trading securities are reflected in net investment income. 
 
                   The cost of fixed maturity securities is adjusted for amortization of premiums and accrual of discounts, both computed 
using the interest method. The cost of fixed maturity securities and equity securities is adjusted for declines in value that are 
other than temporary. Impairments in value deemed to be other than temporary are primarily reported in net income as a 
component of net realized capital gains (losses), with noncredit impairment losses for certain fixed maturity securities reported 
in OCI. See further discussion in Note 6, Investments. For loan-backed and structured securities, we recognize income using a 
constant effective yield based on currently anticipated cash flows. 
 
                   Real estate investments are reported at cost less accumulated depreciation. The initial cost bases of properties acquired 
through loan foreclosures are the lower of the fair market values of the properties at the time of foreclosure or the outstanding 
loan balance. Buildings and land improvements are generally depreciated on the straight-line method over the estimated useful 
life of improvements, and tenant improvement costs are depreciated on the straight-line method over the term of the related 
lease. We recognize impairment losses for properties when indicators of impairment are present and a property's expected 
undiscounted cash flows are not sufficient to recover the property's carrying value. In such cases, the cost bases of the properties 
are reduced to fair value. Real estate expected to be disposed is carried at the lower of cost or fair value, less cost to sell, with 
valuation allowances established accordingly and depreciation no longer recognized. The carrying amount of real estate held for 
sale was $23.8 million and $135.4 million as of December 31, 2009 and 2008, respectively. Any impairment losses and any 
changes in valuation allowances are reported in net income. 
 
                   Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and 
accrual of discounts, computed using the interest method, net of valuation allowances. Any changes in the valuation allowances 
are reported in net income as net realized capital gains (losses). We measure impairment based upon the difference between 
carrying value and estimated value. Estimated value is based on either the present value of expected cash flows discounted at the 
loan's effective interest rate, the loan's observable market price or the fair value of the collateral. If foreclosure is probable, the 
measurement of any valuation allowance is based upon the fair value of the collateral. We had commercial mortgage loans held 
for sale in the amount of $3.4 million and $12.9 million at December 31, 2009 and 2008, respectively, which are carried at the 
lower of cost or fair value and reported as mortgage loans in the consolidated statements of financial position. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In 
general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not 
designated as hedges, we report gains and losses related to the following in net realized capital gains (losses): other than 
temporary impairments of securities, mark-to-market adjustments on certain trading securities, mark-to-market adjustments on 
certain seed money investments, fair value hedge ineffectiveness, mark-to-market adjustments on derivatives not designated as 
hedges, changes in the mortgage loan valuation allowance and impairments of real estate held for investment. Investment gains 
and losses on sales of certain real estate held for sale, which do not meet the criteria for classification as a discontinued operation 
and mark-to-market adjustments on certain trading securities are reported as net investment income and are excluded from net 
realized capital gains (losses). 
 
                   Policy loans and other investments, excluding investments in unconsolidated entities, are primarily reported at cost. 
Derivatives   
                   Overview. Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, 
financial indices or the values of securities. Derivatives generally used by us include interest rate swaps, swaptions, futures, 
currency swaps, currency forwards, credit default swaps, commodity swaps and options. Derivatives may be exchange traded or 
contracted in the over-the-counter market. Derivative positions are either assets or liabilities in the consolidated statements of 
financial position and are measured at fair value, generally by obtaining quoted market prices or through the use of pricing 
models. See Note 16, Fair Value of Financial Instruments, for policies related to the determination of fair value. Fair values can 
be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities, credit spreads, and market 
volatility and liquidity. 
                   Accounting and Financial Statement Presentation. We designate derivatives as either: 
                   (a)  a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm 
  commitment, including those denominated in a foreign currency (“fair value hedge”); 
                   (b)  a hedge of a forecasted transaction or the exposure to variability of cash flows to be received or paid related to 
  a recognized asset or liability, including those denominated in a foreign currency (“cash flow hedge”) or 
                   (c)  a derivative not designated as a hedging instrument. 
 
                   Our accounting for the ongoing changes in fair value of a derivative depends on the intended use of the derivative and 
the designation, as described above, and is determined when the derivative contract is entered into or at the time of 
redesignation. Hedge accounting is used for derivatives that are specifically designated in advance as hedges and that reduce our 
exposure to an indicated risk by having a high correlation between changes in the value of the derivatives and the items being 
hedged at both the inception of the hedge and throughout the hedge period. 
 
                   Fair Value Hedges. When a derivative is designated as a fair value hedge and is determined to be highly effective, 
changes in its fair value, along with changes in the fair value of the hedged asset, liability or firm commitment attributable to the 
hedged risk, are reported in net realized capital gains (losses). Any difference between the net change in fair value of the 
derivative and the hedged item represents hedge ineffectiveness. 
 
                   Cash Flow Hedges. When a derivative is designated as a cash flow hedge and is determined to be highly effective, 
changes in its fair value are recorded as a component of OCI. Any hedge ineffectiveness is recorded immediately in net income. 
At the time the variability of cash flows being hedged impacts net income, the related portion of deferred gains or losses on the 
derivative instrument is reclassified and reported in net income. 
 
                   Non-Hedge Derivatives. If a derivative does not qualify or is not designated for hedge accounting, all changes in fair 
value are reported in net income without considering the changes in the fair value of the economically associated assets or 
liabilities.   


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   Hedge Documentation and Effectiveness Testing. At inception, we formally document all relationships between 
hedging instruments and hedged items, as well as our risk management objective and strategy for undertaking various hedge 
transactions. This process includes associating all derivatives designated as fair value or cash flow hedges with specific assets or 
liabilities on the statement of financial position or with specific firm commitments or forecasted transactions. Effectiveness of 
the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative is highly 
effective and qualifies for hedge accounting treatment, the hedge might have some ineffectiveness. 
                   We use qualitative and quantitative methods to assess hedge effectiveness. Qualitative methods may include 
monitoring changes to terms and conditions and counterparty credit ratings. Quantitative methods may include statistical tests 
including regression analysis and minimum variance and dollar offset techniques. 
 
                   Termination of Hedge Accounting. We prospectively discontinue hedge accounting when (1) the criteria to qualify for 
hedge accounting is no longer met, e.g., a derivative is determined to no longer be highly effective in offsetting the change in fair 
value or cash flows of a hedged item; (2) the derivative expires, is sold, terminated or exercised; or (3) we remove the 
designation of the derivative being the hedging instrument for a fair value or cash flow hedge. 
 
                   If it is determined that a derivative no longer qualifies as an effective hedge, the derivative will continue to be carried 
on the consolidated statements of financial position at its fair value, with changes in fair value recognized prospectively in net 
realized capital gains (losses). The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value 
pursuant to hedging rules and the existing basis adjustment is amortized to the consolidated statements of operations line 
associated with the asset or liability. The component of OCI related to discontinued cash flow hedges that are no longer highly 
effective is amortized to the consolidated statements of operations consistent with the net income impacts of the original hedged 
cash flows. If a cash flow hedge is discontinued because a hedged forecasted transaction is no longer probable, the deferred gain 
or loss is immediately reclassified from OCI into net income. 
 
                   Embedded Derivatives. We purchase and issue certain financial instruments and products that contain a derivative that 
is embedded in the financial instrument or product. We assess whether this embedded derivative is clearly and closely related to 
the asset or liability that serves as its host contract. If we deem that the embedded derivative's terms are not clearly and closely 
related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the 
derivative is bifurcated from that contract and held at fair value on the consolidated statements of financial position, with 
changes in fair value reported in net income. 
 
Contractholder and Policyholder Liabilities 
 
                   Contractholder and policyholder liabilities (contractholder funds, future policy benefits and claims and other 
policyholder funds) include reserves for investment contracts and reserves for universal life, term life insurance, participating 
traditional individual life insurance, group life insurance, accident and health insurance and disability income policies, as well as 
a provision for dividends on participating policies. 
 
                   Investment contracts are contractholders' funds on deposit with us and generally include reserves for pension and 
annuity contracts. Reserves on investment contracts are equal to the cumulative deposits less any applicable charges and 
withdrawals plus credited interest. Reserves for universal life insurance contracts are equal to cumulative deposits less charges 
plus credited interest, which represents the account balances that accrue to the benefit of the policyholders. 
 
                   We hold additional reserves on certain long duration contracts where benefit features result in gains in early years 
followed by losses in later years, universal life/variable universal life contracts that contain no lapse guarantee features, or 
annuities with guaranteed minimum death benefits. 
 
                   Reserves for nonparticipating term life insurance and disability income contracts are computed on a basis of assumed 
investment yield, mortality, morbidity and expenses, including a provision for adverse deviation, which generally varies by plan, 
year of issue and policy duration. Investment yield is based on our experience. Mortality, morbidity and withdrawal rate 
assumptions are based on our experience and are periodically reviewed against both industry standards and experience. 
 
                   Reserves for participating life insurance contracts are based on the net level premium reserve for death and endowment 
policy benefits. This net level premium reserve is calculated based on dividend fund interest rates and mortality rates guaranteed 
in calculating the cash surrender values described in the contract. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
                   Participating business represented approximately 17%, 17% and 18% of our life insurance in force and 55%, 57% and 
59% of the number of life insurance policies in force at December 31, 2009, 2008 and 2007, respectively. Participating business 
represented approximately 68% of life insurance premiums for the years ended December 31, 2009, 2008 and 2007, 
respectively. The amount of dividends to policyholders is declared annually by our Board of Directors. The amount of dividends 
to be paid to policyholders is determined after consideration of several factors including interest, mortality, morbidity and other 
expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by us. At the end of 
the reporting period, we establish a dividend liability for the pro rata portion of the dividends expected to be paid on or before 
the next policy anniversary date. 
 
                   Some of our policies and contracts require payment of fees or other policyholder assessments in advance for services 
that will be rendered over the estimated lives of the policies and contracts. These payments are established as unearned revenue 
liabilities upon receipt and included in other policyholder funds in the consolidated statements of financial position. These 
unearned revenue reserves are amortized to operations over the estimated lives of these policies and contracts in relation to the 
emergence of estimated gross profit margins. 
 
                   The liability for unpaid accident and health claims is an estimate of the ultimate net cost of reported and unreported 
losses not yet settled. This liability is estimated using actuarial analyses and case basis evaluations. Although considerable 
variability is inherent in such estimates, we believe that the liability for unpaid claims is adequate. These estimates are 
continually reviewed and, as adjustments to this liability become necessary, such adjustments are reflected in net income. 
 
Recognition of Premiums and Other Considerations, Fees and Other Revenues and Benefits 
 
                   Traditional individual life insurance products include those products with fixed and guaranteed premiums and benefits 
and consist principally of whole life and term life insurance policies. Premiums from these products are recognized as premium 
revenue when due. Related policy benefits and expenses for individual life products are associated with earned premiums and 
result in the recognition of profits over the expected term of the policies and contracts. 
 
                   Immediate annuities with life contingencies include products with fixed and guaranteed annuity considerations and 
benefits and consist principally of group and individual single premium annuities with life contingencies. Annuity considerations 
from these products are recognized as revenue. However, the collection of these annuity considerations does not represent the 
completion of the earnings process, as we establish annuity reserves, using estimates for mortality and investment assumptions, 
which include a provision for adverse deviation as required by U.S. GAAP. We anticipate profits to emerge over the life of the 
annuity products as we earn investment income, pay benefits and release reserves. 
 
                   Group life and health insurance premiums are generally recorded as premium revenue over the term of the coverage. 
Certain group contracts contain experience premium refund provisions based on a pre-defined formula that reflects their claim 
experience. Experience premium refunds reduce revenue over the term of the coverage and are adjusted to reflect current 
experience. Related policy benefits and expenses for group life and health insurance products are associated with earned 
premiums and result in the recognition of profits over the term of the policies and contracts. Fees for contracts providing claim 
processing or other administrative services are recorded as revenue over the period the service is provided. 
 
                   Universal life-type policies are insurance contracts with terms that are not fixed. Amounts received as payments for 
such contracts are not reported as premium revenues. Revenues for universal life-type insurance contracts consist of policy 
charges for the cost of insurance, policy initiation and administration, surrender charges and other fees that have been assessed 
against policy account values and investment income. Policy benefits and claims that are charged to expense include interest 
credited to contracts and benefit claims incurred in the period in excess of related policy account balances. 
 
                   Investment contracts do not subject us to significant risks arising from policyholder mortality or morbidity and consist 
primarily of Guaranteed Investment Contracts (“GICs”), funding agreements and certain deferred annuities. Amounts received 
as payments for investment contracts are established as investment contract liability balances and are not reported as premium 
revenues. Revenues for investment contracts consist of investment income and policy administration charges. Investment 
contract benefits that are charged to expense include benefit claims incurred in the period in excess of related investment 
contract liability balances and interest credited to investment contract liability balances. 
 
                   Fees and other revenues are earned for asset management services provided to retail and institutional clients based 
largely upon contractual rates applied to the market value of the client's portfolio. Additionally, fees and other revenues are 
earned for administrative services performed including recordkeeping and reporting services for retirement savings plans. Fees 
and other revenues received for performance of asset management and administrative services are recognized as revenue when 
earned, typically when the service is performed. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
Deferred Policy Acquisition Costs 
 
                   Commissions and other costs (underwriting, issuance and field expenses) that vary with and are primarily related to the 
acquisition of new and renewal insurance policies and investment contract business are capitalized to the extent recoverable. 
Maintenance costs and acquisition costs that are not deferrable are charged to operations as incurred. 
 
                   DPAC for universal life-type insurance contracts, participating life insurance policies and certain investment contracts 
are being amortized over the lives of the policies and contracts in relation to the emergence of estimated gross profit margins. 
This amortization is adjusted in the current period when estimated gross profits are revised. For individual variable life 
insurance, individual variable annuities and group annuities which have separate account equity investment options, we utilize a 
mean reversion method (reversion to the mean assumption), a common industry practice, to determine the future domestic equity 
market growth assumption used for the amortization of DPAC. The DPAC of nonparticipating term life insurance and individual 
disability policies are being amortized over the premium-paying period of the related policies using assumptions consistent with 
those used in computing policyholder liabilities. 
 
                   DPAC are subject to recoverability testing at the time of policy issue and loss recognition testing on an annual basis, or 
when an event occurs that may warrant loss recognition. If loss recognition is necessary, DPAC would be written off to the 
extent that it is determined that future policy premiums and investment income or gross profits are not adequate to cover related 
losses and expenses. 
 
Deferred Policy Acquisition Costs on Internal Replacements 
 
                   All insurance and investment contract modifications and replacements are reviewed to determine if the internal 
replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue 
associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing 
DPAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal 
replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue 
associated with the new contract are immediately recognized in the period incurred. In addition, the existing DPAC, sales 
inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over 
to the new contract. 
 
Long-Term Debt 
 
                   Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one 
year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our statement of financial 
position. 
 
Reinsurance 
 
                   We enter into reinsurance agreements with other companies in the normal course of business. We may assume 
reinsurance from or cede reinsurance to other companies. Assets and liabilities related to reinsurance ceded are reported on a 
gross basis. Premiums and expenses are reported net of reinsurance ceded. The cost of reinsurance related to long-duration 
contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to 
account for the underlying policies. We are contingently liable with respect to reinsurance ceded to other companies in the event 
the reinsurer is unable to meet the obligations it has assumed. At December 31, 2009 and 2008, our largest exposures to a single 
third-party reinsurer in our individual life insurance business was $22.0 billion and $18.5 billion of life insurance in force, 
representing 14% and 11% of total net individual life insurance in force, respectively. The financial statement exposure is 
limited to the reinsurance recoverable related to this single third party reinsurer, which was $26.8 million and $18.1 million at 
December 31, 2009 and 2008, respectively. 


Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
1. Nature of Operations and Significant Accounting Policies — (continued) 
                   The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows: 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Premiums and other considerations:       
   Direct  $ 3,807.9  $ 4,290.5 $  4,504.4 
   Assumed  5.2                   9.7  160.0 
   Ceded  (301.6)  (295.1)  (276.7) 
Net premiums and other considerations  $ 3,511.5  $ 4,005.1 $  4,387.7 
Benefits, claims and settlement expenses:       
   Direct  $ 5,234.0  $ 5,853.7 $  5,963.0 
   Assumed  38.9  43.5  190.4 
   Ceded  (267.0)  (263.2)  (244.8) 
Net benefits, claims and settlement expenses  $ 5,005.9  $ 5,634.0 $  5,908.6 

Separate Accounts 
 
                   The separate account assets presented in the consolidated financial statements represent the fair market value of funds 
that are separately administered by us for contracts with equity, real estate and fixed income investments. The separate account 
contract owner, rather than us, bears the investment risk of these funds. The separate account assets are legally segregated and 
are not subject to claims that arise out of any of our other business. We receive fees for mortality, withdrawal, and expense risks, 
as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of 
operations. Net deposits, net investment income and realized and unrealized capital gains and losses on the separate accounts are 
not reflected in the consolidated statements of operations. 
 
                   At December 31, 2009 and 2008, the separate accounts include a separate account valued at $191.5 million and 
$207.4 million, respectively, which primarily includes shares of PFG stock that were allocated and issued to eligible participants 
of qualified employee benefit plans administered by us as part of the policy credits issued under Principal Mutual Holding 
Company’s 2001 demutualization. The separate account shares are recorded at fair value and are reported as separate account 
assets with a corresponding separate account liability to eligible participants of the qualified plan. Changes in fair value of the 
separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our 
results of operations. 
 
Income Taxes 
 
                   Our ultimate parent, PFG, files a U.S. consolidated income tax return that includes all of our qualifying subsidiaries. In 
addition, we file income tax returns in all states in which we conduct business. PFG allocates income tax expenses and benefits 
to companies in the group generally based upon pro rata contribution of taxable income or operating losses. We are taxed at 
corporate rates on taxable income based on existing tax laws. Current income taxes are charged or credited to net income based 
upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income taxes 
are provided for the tax effect of temporary differences in the financial reporting and income tax bases of assets and liabilities 
and net operating losses using enacted income tax rates and laws. The effect on deferred income tax assets and deferred income 
tax liabilities of a change in tax rates is recognized in operations in the period in which the change is enacted. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

1. Nature of Operations and Significant Accounting Policies — (continued) 
 
Goodwill and Other Intangibles 
 
                   Goodwill and other intangibles include the cost of acquired subsidiaries in excess of the fair value of the net tangible 
assets recorded in connection with acquisitions. Goodwill and indefinite-lived intangible assets are not amortized. Rather, they 
are tested for impairment during the fourth quarter each year, or more frequently if events or changes in circumstances indicate 
that the asset might be impaired. Goodwill is tested at the reporting unit level to which it was assigned. A reporting unit is an 
operating segment or a business one level below that operating segment, if financial information is prepared and regularly 
reviewed by management at that level. Once goodwill has been assigned to a reporting unit, it is no longer associated with a 
particular acquisition; therefore all of the activities within a reporting unit, whether acquired or organically grown, are available 
to support the goodwill value. Impairment testing for indefinite-lived intangible assets consists of a comparison of the fair value 
of the intangible asset with its carrying value. 
 
                   Intangible assets with a finite useful life are amortized as related benefits emerge and are reviewed periodically for 
indicators of impairment in value. If facts and circumstances suggest possible impairment, the sum of the estimated 
undiscounted future cash flows expected to result from the use of the asset is compared to the current carrying value of the asset. 
If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized for the excess of the 
carrying amount of assets over their fair value. 
 
2. Related Party Transaction 
 
                   We have entered into various related party transactions with our ultimate parent and its other affiliates. During the 
years ended December 31, 2009, 2008 and 2007, we received $196.1 million, $199.2 million and $187.1 million, 
respectively, of expense reimbursements from affiliated entities. 
 
                   We and our direct parent, PFSI, are parties to a cash advance agreement, which allows us, collectively, to pool our 
available cash in order to more efficiently and effectively invest our cash. The cash advance agreement allows (i) us to 
advance cash to PFSI in aggregate principal amounts not to exceed $1.0 billion, with such advanced amounts earning interest 
at the daily 30-day LIBOR rate (the “Internal Crediting Rate”); and (ii) PFSI to advance cash to us in aggregate principal 
amounts not to exceed $1.0 billion, with such advance amounts paying interest at the Internal Crediting Rate plus 10 basis 
points to reimburse PFSI for the costs incurred in maintaining short-term investing and borrowing programs. Under this cash 
advance agreement, we had a receivable from PFSI of $458.7 million and $325.4 million at December 31, 2009 and 2008, 
respectively, and earned interest of $1.3 million, $10.9 million and $28.2 million during 2009, 2008 and 2007, respectively. 
 
                   We receive commission fees, distribution and services fees from Principal Funds for distributing proprietary 
products on our behalf. Furthermore, we receive management and administrative fees from Principal Funds for investments 
our products hold in the Principal Mutual Funds and Principal Variable Contracts. Fees and other revenue was $172.7 
million, $101.9 million and $102.9 million for the years ended December 31, 2009, 2008 and 2007, respectively. In addition, 
we pay commission expense to affiliated registered representatives to sell proprietary products. Commission expense was 
$57.8 million, $145.2 million and $132.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. 
 
                   Pursuant to certain regulatory requirements or otherwise in the ordinary course of business, we guarantee certain 
payments of our subsidiaries and have agreements with affiliates to provide and/or receive management, administrative and 
other services, all of which, individually and in the aggregate, are immaterial to our business, financial condition and net 
income. 
 
3. Discontinued Operations 
 
Real Estate Investments 
 
                   In 2007, we sold a real estate property previously held for investment purposes. This property qualifies for discontinued 
operations treatment. Therefore, the income from the discontinued operation has been removed from our results of continuing 
operations for all periods presented. The gain on disposal, which is reported in our Corporate segment, is excluded from segment 
operating earnings for all periods presented. We have separately disclosed the operating, investing and financing portions of the 
cash flows attributable to the discontinued operation in our consolidated statements of cash flows. Additionally, the information 
included in the notes to the financial statements excludes information applicable to this property, unless otherwise noted. 
 
                   The property was sold to take advantage of positive real estate market conditions in a specific geographic location and 
to further diversify our real estate portfolio. 


Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
3. Discontinued Operations — (continued) 
           Selected financial information for the discontinued operation is as follows: 

  For the year ended
  December 31,
  2009  2008  2007 
    (in millions) 
Total revenues  $ —  $ —  $ 0.3 
Income from discontinued operation attributable to Principal Life Insurance     
   Company:     
   Income before income taxes  $ —  $ —  $ 0.3 
   Income taxes  —  —  0.1 
   Gain on disposal of discontinued operation  —  —  32.8 
   Income taxes on disposal  —  —  12.8 
Net income  $ —  $ —  $ 20.2 

4. Goodwill and Other Intangible Assets 
Goodwill 
                   The changes in the carrying amount of goodwill reported in our segments for 2008 and 2009 were as follows: 

      Life and   
  U.S. Asset  Global Asset  Health   
  Accumulation  Management  Insurance  Consolidated 
  (in millions)
Balances at January 1, 2008  $ 16.6  $ 140.4  $ 87.0  $ 244.0 
Goodwill from acquisitions  2.1  12.1  —  14.2 
Balances at December 31, 2008  $ 18.7  $ 152.5  $ 87.0  $ 258.2 
 
Balances at December 31, 2009  $ 18.7  $ 152.5  $ 87.0  $ 258.2 

Finite Lived Intangibles 
 
                   Finite lived intangible assets that continue to be subject to amortization over a weighted average remaining expected 
life of 18 years were as follows: 

  December 31,
    2009      2008   
  Gross    Net  Gross    Net 
  carrying  Accumulated  carrying  carrying  Accumulated  carrying 
  amount  amortization  amount  amount  amortization  amount 
  (in millions)
Finite lived intangibles  $ 84.1  $ 32.9  $ 51.2  $ 133.0  $ 39.8  $ 93.2 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

4. Goodwill and Other Intangible Assets — (continued) 
 
                   We recorded no significant impairments in 2009, 2008 and 2007. The amortization expense for intangible assets with 
finite useful lives was $6.0 million, $8.3 million and $9.9 million for 2009, 2008 and 2007, respectively. At December 31, 2009, 
the estimated amortization expense for the next five years is as follows (in millions): 

Year ending December 31:   
       2010  $ 4.2 
       2011    4.1 
       2012    3.9 
       2013    3.5 
       2014    3.5 

Indefinite Lived Intangible Assets 
 
                   The net carrying amount of unamortized indefinite lived intangible assets was $94.5 million as of both December 31, 
2009 and 2008. This represents our share of the purchase price from our parent’s December 31, 2006, acquisition of WM 
Advisors, Inc. related to investment management contracts that are not subject to amortization. We were allocated $99.9 million 
of the purchase price based on the fact that we will benefit from our parent’s acquisition, which also included $3.2 million 
related to goodwill and $2.2 million related to amortizable finite lived intangible assets that were subject to a three-year 
amortization period. 
 
5. Variable Interest Entities 
                   We have relationships with various types of special purpose entities and other entities where we have a variable 
interest. The following serves as a discussion of investments in entities that meet the definition of a VIE. 
Consolidated Variable Interest Entities 
                   Synthetic Collateralized Debt Obligation. On May 26, 2005, we invested $130.0 million in a secured credit-linked 
note issued by a grantor trust. The trust entered into a credit default swap providing credit protection on the first 45% of loss of 
seven mezzanine tranches totaling $288.9 million of seven synthetic reference portfolios. Subordination for the seven mezzanine 
tranches ranged from 1.29% to 4.79%. Therefore, defaults in an underlying reference portfolio only affected the credit-linked 
note if cumulative losses exceeded the subordination of a synthetic reference portfolio. As of December 31, 2008, the credit 
default swap entered into by the trust had an outstanding notional amount of $130.0 million. The credit default swap 
counterparties of the grantor trusts had no recourse to our assets. In October 2009, the grantor trust was terminated and we 
received $122.2 million in cash. 
 
                   We determined that this grantor trust was a VIE and that we were the primary beneficiary of the trust as we were the sole 
investor in the trust and the manager of the synthetic reference portfolios. Upon consolidation of the trust, as of December 31, 
2008, our consolidated statements of financial position included $93.5 million of available-for-sale fixed maturity securities, 
which represented the collateral held by the trust. The assets of the trust were held by a trustee and could only be liquidated to 
settle obligations of the trust. These obligations included losses on the synthetic reference portfolio and the return of investments 
due to maturity or termination of the trust. As of December 31, 2008, our consolidated statements of financial position included 
$53.4 million of other liabilities representing derivative market values of the trust. 
 
                   During the year December 31, 2008 and 2007, the credit default swaps had a change in fair value that resulted in a 
$54.5 million pre-tax loss and $3.2 million pre-tax loss, respectively. During the year ended December 31, 2009, we recognized 
a pre-tax gain of $49.8 million related to the change in fair value and termination of the credit default swaps. 
 
                   Grantor Trusts. We contributed undated subordinated floating rate notes to three grantor trusts. The trusts separated 
the cash flows of the underlying $425.9 million par value notes by issuing an interest-only certificate and a residual certificate 
related to each note contributed. Each interest-only certificate entitles the holder to interest on the stated note for a specified term 
while the residual certificate entitles the holder to interest payments subsequent to the term of the interest-only certificate and to 
all principal payments. We retained the interest-only certificate and the residual certificates were subsequently sold to a third 
party. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

5. Variable Interest Entities — (continued) 
 
                   We have determined that these grantor trusts are VIEs as our interest-only certificates are exposed to the majority of the 
risk of loss due to interest rate risk. The restricted interest periods end between 2016 and 2020 and, at that time, the residual 
certificate holders’ certificates are redeemed by the trust in return for the notes. We have determined that it will be necessary for 
us to consolidate these entities until the expiration of the interest-only period. As of December 31, 2009 and 2008, our 
consolidated statements of financial position include $226.6 million and $212.2 million, respectively, of undated subordinated 
floating rate notes of the grantor trusts, which are classified as available-for-sale fixed maturity securities and represent the 
collateral held by the trust. The obligation to deliver the underlying securities to the residual certificate holders of $89.1 million 
and $103.8 million as of December 31, 2009 and 2008, respectively, is classified as an other liability and contains an embedded 
derivative of the forecasted transaction to deliver the underlying securities. The creditors of the grantor trusts have no recourse to 
our assets. 
 
                   Other. In addition to the entities above, we have a number of relationships with a disparate group of entities, which 
meet the criteria for VIEs. Due to the nature of our direct investment in the equity and/or debt of these VIEs, we are the primary 
beneficiary of such entities, which requires us to consolidate them. These entities include five private investment vehicles and 
several hedge funds. The consolidation of these VIEs did not have a material effect on either our consolidated statements of 
financial position as of December 31, 2009 or 2008, or results of operations for the years ended December 31, 2009, 2008 and 
2007. For these entities, the creditors have no recourse to our assets. 
 
                   The carrying amount and classification of other consolidated VIE assets that are pledged as collateral that the VIEs 
have designated for their other obligations and the debt of the VIEs are as follows: 

  December 31, 
  2009  2008 
  (in millions) 
Fixed maturity securities, available-for-sale  $ 59.2  $ 103.8 
Fixed maturity securities, trading  19.8  17.2 
Equity securities, trading  90.9  30.7 
Cash and other assets  119.8  140.8 
    Total assets pledged as collateral  $ 289.7  $ 292.5 
Long-term debt and other obligations  $ 178.9  $ 248.6 

                   The assets of the trusts are held by a trustee and can only be liquidated to settle obligations of the trusts. These 
obligations primarily include unrealized losses on derivatives, the synthetic reference portfolios or financial guarantees and the 
return of investments due to maturity or termination of the trusts. As of December 31, 2009 and 2008, these entities had long- 
term debt of $81.2 million and $142.6 million, respectively, all of which was issued to our affiliates and, therefore, eliminated 
upon consolidation. 
 
Significant Unconsolidated Variable Interest Entities 
 
                   We hold a significant variable interest in a number of VIEs where we are not the primary beneficiary. These entities 
include private investment vehicles that have issued trust certificates that are recorded as available-for-sale fixed maturity 
securities in the consolidated statements of financial position. 
 
                   On September 21, 2001, we entered into a transaction where a third party transferred funds to a trust. The trust 
purchased shares of a specific money market fund and then separated the cash flows of the money market shares into share 
receipts and dividend receipts. The dividend receipts entitle the holder to dividends paid for a specified term while the share 
receipts, purchased at a discount, entitle the holder to dividend payments subsequent to the term of the dividend receipts and the 
rights to the underlying shares. We purchased $150.0 million par value of the share receipts at a significant discount. After the 
restricted dividend period ends on December 21, 2021, we, as the share receipt holder, have the right to terminate the trust 
agreement and will receive the underlying money market fund shares. We determined the primary beneficiary is the dividend 
receipt holder, which has the majority of the risk of loss. Our maximum exposure to loss as a result of our involvement with this 
entity is our investment in the share receipts as measured by amortized cost. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

5. Variable Interest Entities — (continued) 
 
                   On June 20, 1997, we entered into a transaction in which we purchased a residual trust certificate with a par value of 
$100.0 million. The trust separated the cash flows of an underlying security into an interest-only certificate that entitles the third 
party certificate holder to the stated interest on the underlying security through May 15, 2017, and a residual certificate entitling 
the holder to interest payments subsequent to the term of the interest-only certificates and any principal payments. Subsequent to 
the restricted interest period, we, as the residual certificate holder, have the right to terminate the trust agreement and will receive 
the underlying security. We determined the primary beneficiary is the interest-only certificate holder, which has the majority of 
the risk of loss. Our maximum exposure to loss as a result of our involvement with this entity is our investment in the residual 
trust certificate as measured by amortized cost. The only assets of the trust are corporate bonds which are guaranteed by a 
foreign government. 
 
                   The classification of the asset, carrying value and maximum loss exposure for our significant unconsolidated VIEs 
as of December 31, 2009 and 2008, are as follows (in millions): 

    Asset carrying  Maximum 
         Classification of asset  value  exposure to loss 
December 31, 2009       
Fixed maturities-available-
$150.0 million Trust Share Receipts                        for-sale  $ 79.7  $ 78.0 
Fixed maturities- available-
$100.0 million Residual Trust Certificate                        for-sale  $ 83.1  $ 66.2 
December 31, 2008       
Fixed maturities-available-
$150.0 million Trust Share Receipts                        for-sale  $ 61.2  $ 73.7 
Fixed maturities- available-
$100.0 million Residual Trust Certificate                        for-sale  $ 101.9  $ 61.3 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments 
Fixed Maturities and Equity Securities 

                   The amortized cost, gross unrealized gains and losses, other-than-temporary impairments in accumulated OCI 
(“AOCI”) and fair value of fixed maturities and equity securities available-for-sale as of December 31, 2009 and 2008, are 
summarized as follows: 

        Other-than-   
    Gross  Gross  temporary   
  Amortized  unrealized  unrealized  impairments in   
  Cost  gains  losses  AOCI  Fair value 
      (in millions)     
December 31, 2009           
Fixed maturities, available-for-sale:           
   U.S. government and agencies  $ 530.4  $ 8.7  $ 0.5  $ —  $ 538.6 
   Non-U.S. governments  421.1  42.4  1.1                     —  462.4 
   States and political subdivisions  2,008.7  53.4  13.5                     —  2,048.6 
   Corporate  30,592.6  1,222.0  989.6                     58.0  30,767.0 
   Residential mortgage-backed securities  3,019.1  86.0  3.8                     —  3,101.3 
   Commercial mortgage-backed securities  4,898.0  20.9  1,211.5  107.7  3,599.7 
   Collateralized debt obligations  607.5  1.8  200.7                     39.0  369.6 
   Other debt obligations  2,900.2  34.5  229.8                     73.7  2,631.2 
Total fixed maturities, available-for-sale  $ 44,977.6  $ 1,469.7  $ 2,650.5  $ 278.4  $ 43,518.4 
Total equity securities, available-for-sale  $ 229.9  $ 16.1  $ 34.3    $ 211.7 
December 31, 2008           
Fixed maturities, available-for-sale:           
   U.S. government and agencies  $ 538.6  $ 46.4  $ 0.1    $ 584.9 
   Non-U.S. governments  462.1  31.5  15.1    478.5 
   States and political subdivisions  2,113.8  32.6  120.9    2,025.5 
   Corporate — public  20,044.3  144.4  2,963.8    17,224.9 
   Corporate — private  12,315.9  153.8  2,104.3    10,365.4 
   Mortgage-backed and other           
asset-backed securities  10,318.6  77.6  3,011.4    7,384.8 
Total fixed maturities, available-for-sale  $ 45,793.3  $ 486.3  $ 8,215.6    $ 38,064.0 
Total equity securities, available-for-sale  $ 300.2  $ 28.1  $ 94.1    $ 234.2 

                   The amortized cost and fair value of fixed maturities available-for-sale at December 31, 2009, by expected maturity, 
were as follows: 

  Amortized   
  Cost  Fair value 
  (in millions) 
Due in one year or less  $ 1,529.9  $ 1,557.6 
Due after one year through five years  13,588.8  13,987.8 
Due after five years through ten years  9,057.4  9,169.7 
Due after ten years  9,376.7  9,101.5 
  33,552.8  33,816.6 
Mortgage-backed and other asset-backed securities  11,424.8  9,701.8 
Total  $ 44,977.6  $ 43,518.4 

                   Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is 
diversified by industry, issuer and asset class. Credit concentrations are managed to established limits. 


Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
6. Investments — (continued) 
Net Investment Income 
                   Major categories of net investment income are summarized as follows: 

  For the year ended December 31, 
  2009  2008         2007 
  (in millions)
Fixed maturities, available-for-sale  $ 2,587.0  $ 2,748.3  $ 2,603.0 
Fixed maturities, trading  29.8  30.5  15.1 
Equity securities, available-for-sale  16.8  16.2  23.5 
Equity securities, trading  0.3  0.4  0.6 
Mortgage loans  675.3  743.2  755.6 
Real estate  35.8  54.0  74.5 
Policy loans  57.0  54.1  52.6 
Cash and cash equivalents  9.1  63.0  111.2 
Derivatives  (128.3)  (56.8)  36.0 
Other  15.9  (31.0)  43.7 
Total  3,298.7  3,621.9  3,715.8 
Less investment expenses  (110.5)  (149.9)  (163.3) 
Net investment income  $ 3,188.2  $ 3,472.0  $ 3,552.5 

Net Realized Capital Gains and Losses 
                   The major components of net realized capital gains (losses) on investments are summarized as follows: 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Fixed maturities, available-for-sale:       
   Gross gains  $ 109.0  $ 39.3  $ 32.4 
   Gross losses  (701.9)  (436.2)  (280.2) 
   Portion of OTTI losses recognized in OCI  260.9                 —                 — 
   Hedging, net  (229.1)  496.3  151.8 
Fixed maturities, trading  50.8  (41.1)  (4.2) 
Equity securities, available-for-sale:       
   Gross gains  26.3  12.0  6.4 
   Gross losses  (46.2)  (56.6)  (53.9) 
Equity securities, trading  37.3  (62.7)  23.5 
Mortgage loans  (153.1)  (44.3)  (7.2) 
Derivatives  230.1  (595.7)  (236.0) 
Other  (29.4)  66.4  19.0 
Net realized capital losses  $ (445.3)  $ (622.6)  $ (348.4) 

                   Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were 
$3.0 billion, $1.1 billion and $2.3 billion in 2009, 2008 and 2007, respectively. 
 
Other-Than-Temporary Impairments 
 
                   We have a process in place to identify fixed maturity and equity securities that could potentially have a credit 
impairment that is other than temporary. This process involves monitoring market events that could impact issuers’ credit 
ratings, business climate, management changes, litigation and government actions and other similar factors. This process also 
involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, 
revenue forecasts and cash flow projections as indicators of credit issues. 
 
                   During first quarter 2009, we adopted authoritative guidance that changed the recognition and presentation of other- 
than-temporary impairments. See further discussion of the adoption in Note 1, Nature of Operations and Significant Accounting 
Policies. The recognition provisions of the guidance apply only to debt securities classified as available-for-sale and held-to- 
maturity, while the presentation and disclosure requirements apply to both debt and equity securities. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
 
                   Each reporting period, all securities are reviewed to determine whether an other-than-temporary decline in value exists 
and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest 
rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent 
and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and 
access to capital of the issuer, including the current and future impact of any specific events and (4) for fixed maturity securities, 
our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its 
amortized cost which, in some cases, may extend to maturity and for equity securities, our ability and intent to hold the security 
for a period of time that allows for the recovery in value. Prior to 2009, our ability and intent to hold fixed maturity securities for 
a period of time that allowed for a recovery in value was considered rather than our intent to sell these securities. To the extent 
we determine that a security is deemed to be other than temporarily impaired, an impairment loss is recognized. 
 
                   Impairment losses on equity securities are recognized in net income and are measured as the difference between 
amortized cost and fair value. The way in which impairment losses on fixed maturity securities are now recognized in the 
financial statements is dependent on the facts and circumstances related to the specific security. If we intend to sell a security or 
it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current 
period credit loss, we recognize an other-than-temporary impairment in net income for the difference between amortized cost 
and fair value. If we do not expect to recover the amortized cost basis, we do not plan to sell the security and if it is not more 
likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period 
credit loss, the recognition of the other-than-temporary impairment is bifurcated. We recognize the credit loss portion in net 
income and the noncredit loss portion in OCI. Prior to 2009, other-than-temporary impairments on fixed maturity securities were 
recorded in net income in their entirety and the amount recognized was the difference between amortized cost and fair value. 
 
                   We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between 
amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best 
estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to 
accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows 
vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and 
circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and 
prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are 
derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and 
circumstances including timing, security interests and loss severity. 
 
                   Total other-than-temporary impairment losses, net of recoveries from the sale of previously impaired securities, were as 
follows: 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Fixed maturities, available-for-sale  $ (692.2)  $ (430.4)  $ (262.8) 
Equity securities, available-for-sale  (20.2)  (47.3)           (51.3) 
Total other-than-temporary impairment losses, net of recoveries from the sale of       
       previously impaired securities  $ (712.4)  $ (477.7)  $ (314.1) 

                   The other-than-temporary impairments on fixed maturity securities for which an amount related to credit losses was 
recognized in net realized capital gains (losses) and an amount related to noncredit losses was recognized in OCI is summarized 
as follows: 

  For the year ended 
  December 31, 2009 
  (in millions) 
Total other-than-temporary impairments on fixed maturity securities for which an amount related to   
   noncredit losses was recognized in OCI (1)  $ (448.7) 
Noncredit loss recognized in OCI  260.9 
Credit loss impairment recognized in net realized capital losses  $ (187.8) 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
 
(1) For the year ended December 31, 2009, total other-than-temporary impairment losses on available-for-sale securities 
         reported in the consolidated statements of operations also include $243.5 million of impairment losses, net of recoveries 
         from the sale of previously impaired securities, on fixed maturity securities and $20.2 million of impairment losses, net of 
         recoveries from the sale of previously impaired securities, on equity securities for which total impairment losses are 
         recognized in net income. 
 
                  The following table provides a rollforward of credit losses on fixed maturity securities recognized in net income 
(“bifurcated credit losses”) for which a portion of an other-than-temporary impairment was recognized in OCI. The purpose of 
the table is to provide detail of (1) additions to the bifurcated credit loss amounts recognized for the period and (2) decrements 
for previously recognized bifurcated credit losses where the loss is no longer bifurcated and/or there has been a positive change 
in expected cash flows or accretion of the bifurcated credit loss amount. 

  For the year ended 
  December 31, 2009 
  (in millions) 
Beginning balance  $ (18.5) 
Credit losses for which an other-than-temporary impairment was not previously recognized  (168.5) 
Credit losses for which an other-than-temporary impairment was previously recognized  (52.7) 
Reduction for credit losses previously recognized on securities now sold or intended to be sold  33.4 
Reduction for positive changes in cash flows expected to be collected and amortization (1)  1.6 
Ending balance  $ (204.7) 

(1) Amounts are recognized in net investment income. 
 
Gross Unrealized Losses for Fixed Maturities and Equity Securities 
 
                   For fixed maturities and equity securities available-for-sale with unrealized losses, including other-than-temporary 
impairment losses reported in OCI, as of December 31, 2009 and 2008, the gross unrealized losses and fair value, aggregated by 
investment category and length of time that individual securities have been in a continuous unrealized loss position are 
summarized as follows: 

  December 31, 2009
  Less than  Greater than or  Total
  twelve months  equal to twelve months   
    Gross    Gross    Gross 
  Carrying  unrealized  Carrying  unrealized  Carrying  unrealized 
  value  losses  value  losses  value  losses 
  (in millions)
Fixed maturities, available-for-sale:             
   U.S. government and agencies  $ 32.7  $ 0.4  $ 1.0  $ 0.1  $ 33.7  $ 0.5 
   Non-U.S. governments  9.6  0.4  30.2  0.7  39.8  1.1 
   States and political subdivisions  242.8  1.9  247.9  11.6  490.7  13.5 
   Corporate  2,183.3  54.1  7,474.5  993.5  9,657.8  1,047.6 
   Residential mortgage-backed securities  489.9  3.7  0.6  0.1  490.5  3.8 
   Commercial mortgage-backed securities  468.1  16.7  2,217.3  1,302.5  2,685.4  1,319.2 
   Collateralized debt obligations  —  —  366.1  239.7  366.1  239.7 
   Other debt obligations  312.9  23.3  902.3  280.2  1,215.2  303.5 
Total fixed maturities, available-for-sale  $ 3,739.3  $ 100.5  $ 11,239.9  $ 2,828.4  $ 14,979.2  $ 2,928.9 
Total equity securities, available-for-sale  $ 4.4  $ 0.1  $ 116.1  $ 34.2  $ 120.5  $ 34.3 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
 
                   Our consolidated portfolio consists of fixed maturity securities where 83% were investment grade (rated AAA through 
BBB-) with an average price of 84 (carrying value/amortized cost) at December 31, 2009. Due to the credit disruption that began 
in the last half of 2007 and continued into first quarter of 2009, which reduced liquidity and led to wider credit spreads, we saw 
an increase in unrealized losses in our securities portfolio. The unrealized losses were more pronounced in the Corporate sector 
and in structured products, such as commercial mortgage-backed securities, collateralized debt obligations and asset-backed 
securities (included in other debt obligations). During the second quarter of 2009 and continuing through the end of the year, a 
narrowing of credit spreads and improvement in liquidity resulted in a decrease in the unrealized losses in our securities portfolio 
relative to year-end 2008. 
 
                   For those securities that had been in a loss position for less than twelve months, our consolidated portfolio held 406 
securities with a carrying value of $3,739.3 million and unrealized losses of $100.5 million reflecting an average price of 97 at 
December 31, 2009. Of this portfolio, 97% was investment grade (rated AAA through BBB-) at December 31, 2009, with 
associated unrealized losses of $82.7 million. The losses on these securities can primarily be attributed to changes in market 
interest rates and changes in credit spreads since the securities were acquired. 
 
                   For those securities that had been in a continuous loss position greater than or equal to twelve months, our consolidated 
portfolio held 1,481 securities with a carrying value of $11,239.9 million and unrealized losses of $2,828.4 million. The average 
rating of this portfolio was BBB+ with an average price of 80 at December 31, 2009. Of the $2,828.4 million in unrealized 
losses, the commercial mortgage-backed securities sector accounts for $1,302.5 million in unrealized losses with an average 
price of 63 and an average credit rating of AA-. The remaining unrealized losses consist primarily of $993.5 million within the 
Corporate sector at December 31, 2009. The average price of the Corporate sector was 88 and the average credit rating was 
BBB. The losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads 
since the securities were acquired. 
 
                   Because it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not 
more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be 
maturity, we did not consider these investments to be other-than-temporarily impaired at December 31, 2009. 

  December 31, 2008
  Less than  Greater than or  Total
  twelve months  equal to twelve months   
    Gross    Gross    Gross 
  Carrying  unrealized  Carrying  unrealized  Carrying  unrealized 
  value  losses  value  losses  value  losses 
  (in millions)
Fixed maturities, available-for-sale:             
   U.S. government and agencies  $ 6.0  $ 0.1  $ —  $ —  $ 6.0  $ 0.1 
   Non-U.S. governments  122.8  12.0  17.7  3.1  140.5  15.1 
   States and political subdivisions  1,137.4  82.1  162.8  38.8  1,300.2  120.9 
   Corporate — public  9,059.1  1,274.5  4,777.0  1,689.3  13,836.1  2,963.8 
   Corporate — private  5,308.2  849.7  3,150.2  1,254.6  8,458.4  2,104.3 
   Mortgage-backed and other asset-backed             
       securities  2,854.5  819.2  2,328.0  2,192.2  5,182.5  3,011.4 
Total fixed maturities, available-for-sale  $ 18,488.0  $ 3,037.6  $10,435.7  $ 5,178.0  $ 28,923.7  $ 8,215.6 
Total equity securities, available-for-sale  $ 93.7  $ 68.5  $ 57.3  $ 25.6  $ 151.0  $ 94.1 

                   Our consolidated portfolio consists of fixed maturity securities where 94% were investment grade (rated AAA through 
BBB-) with an average price of 78 (carrying value/amortized cost) at December 31, 2008. Due to the credit disruption that began 
in the last half of 2007 and continued into 2008, which reduced liquidity and led to wider credit spreads, we saw an increase in 
unrealized losses in our securities portfolio. The unrealized losses were more pronounced in the Corporate-public and Corporate- 
private finance sectors and in structured products, such as collateralized debt obligations, asset-backed securities and commercial 
mortgage-backed securities. 
 
                   For those securities that had been in a loss position for less than twelve months, our consolidated portfolio held 2,105 
securities with a carrying value of $18,488.0 million and unrealized losses of $3,037.6 million reflecting an average price of 86 
at December 31, 2008. Of this portfolio, 95% was investment grade (rated AAA through BBB-) at December 31, 2008, with 
associated unrealized losses of $2,701.9 million. The losses on these securities can primarily be attributed to changes in market 
interest rates and changes in credit spreads since the securities were acquired. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
 
                   For those securities that had been in a continuous loss position greater than or equal to twelve months, our consolidated 
portfolio held 1,526 securities with a carrying value of $10,435.7 million and unrealized losses of $5,178.0 million. The average 
rating of this portfolio was A- with an average price of 67 at December 31, 2008. Of the $5,178.0 million in unrealized losses, 
the Corporate-public and Corporate-private sectors account for $2,943.8 million in unrealized losses with an average price of 73 
and an average credit rating of BBB+. The remaining unrealized losses consist primarily of $2,192.3 million in unrealized losses 
within the mortgage-backed and other asset-backed securities sector at December 31, 2008. The average price of the 
mortgage-backed and other asset-backed securities sector was 52 and the average credit rating was AA-. The losses on these 
securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were 
acquired. 
 
                   Because we had the ability and intent to hold the available-for-sale securities with unrealized losses until a recovery of 
fair value, which may be maturity, we did not consider these investments to be other-than-temporarily impaired at December 31, 
2008. 
 
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments 
 
                   The net unrealized gains and losses on investments in fixed maturities available-for-sale, equity securities available-for- 
sale and derivative instruments are reported as a separate component of stockholder’s equity. The cumulative amount of net 
unrealized gains and losses on available-for-sale securities and derivative instruments net of adjustments related to DPAC, sales 
inducements, unearned revenue reserves, changes in policyholder benefits and claims and applicable income taxes was as 
follows: 

                     December 31, 
  2009         2008 
  (in millions) 
Net unrealized losses on fixed maturities, available-for-sale (1)  $ (1,180.8)  $ (7,729.3) 
Noncredit component of impairment losses on fixed maturities, available-for-sale  (260.9)  — 
Net unrealized losses on equity securities, available-for-sale  (18.2)  (66.0) 
Adjustments for assumed changes in amortization patterns  211.9  1,175.2 
Net unrealized gains on derivative instruments  90.4  156.8 
Net unrealized gains on equity method subsidiaries and noncontrolling interest     
   adjustments  103.2  73.6 
Provision for deferred income taxes  370.1  2,237.4 
Cumulative effect of reclassifying noncredit component of previously recognized     
   impairment losses on fixed maturities, available-for-sale, net  (9.9)  — 
Net unrealized losses on available-for-sale securities and derivative instruments  $ (694.2)  $ (4,152.3) 

(1)  Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging 
  relationships. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
Commercial Mortgage Loans 

                   Commercial mortgage loans represent a primary area of credit risk exposure. At December 31, 2009 and 2008, the 
commercial mortgage portfolio is diversified by geographic region and specific collateral property type as follows: 

  December 31,
  2009 2008
  Carrying  Percent  Carrying  Percent 
  amount  of total  amount  of total 
  ($ in millions)
Geographic distribution         
New England  $ 446.3  4.4% $  459.4  4.1% 
Middle Atlantic  1,535.4  15.2  1,794.8  15.9 
East North Central  941.8  9.3  974.9  8.6 
West North Central  504.3  5.0  550.0  4.9 
South Atlantic  2,641.8  26.1  2,849.9  25.2 
East South Central  300.0  3.0  323.2  2.9 
West South Central  672.1  6.6  775.9  6.9 
Mountain  835.4  8.3  900.3  8.0 
Pacific  2,377.2  23.5  2,707.9  24.0 
Valuation allowance  (132.5)  (1.4)  (57.0)  (0.5) 
Total  $ 10,121.8  100.0% $  11,279.3  100.0% 
Property type distribution         
Office  $ 2,782.1  27.5% $  2,894.7  25.7% 
Retail  2,782.0  27.5  3,004.5  26.7 
Industrial  2,394.3  23.7  2,688.1  23.8 
Apartments  1,415.2  14.0  1,832.6  16.2 
Hotel  497.2  4.9  507.0  4.5 
Mixed use/other  383.5  3.8  409.4  3.6 
Valuation allowance  (132.5)  (1.4)  (57.0)  (0.5) 
Total  $ 10,121.8  100.0% $  11,279.3  100.0% 

Commercial Mortgage Loan Valuation Allowance 
 
                   Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable 
that we will be unable to collect all amounts due according to contractual terms of the loan agreement. When we determine that a 
loan is impaired, a valuation allowance is established equal to the difference between the carrying amount of the mortgage loan 
and the estimated value. Estimated value is based on either the present value of the expected future cash flows discounted at the 
loan's effective interest rate, the loan's observable market price or fair value of the collateral. The change in the valuation 
allowance is included in net realized capital gains (losses) on our consolidated statements of operations. 
 
                   The valuation allowance is maintained at a level believed adequate by management to absorb estimated probable credit 
losses. Management's periodic evaluation and assessment of the adequacy of the valuation allowance and the need for mortgage 
impairments is based on known and inherent risks in the portfolio, adverse situations that may affect a borrower's ability to 
repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions, loss 
experience and other relevant factors. The evaluation of our impaired loan component is subjective, as it requires the estimation 
of timing and amount of future cash flows expected to be received on impaired loans. Impaired mortgage loans, along with the 
related loan specific allowance for losses, were as follows: 

  December 31, 
  2009  2008 
  (in millions) 
Impaired loans  $ 116.5  $ 74.4 
Allowance for losses  43.8         13.4 
Net impaired loans  $ 72.7  $ 61.0 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
 
                   The total average investment in impaired mortgage loans throughout each respective year and the interest income 
recognized on impaired mortgage loans were as follows: 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Average investment in impaired loans  $ 85.3   $ 45.0 $       4.3 
Interest income recognized on impaired loans  2.5  9.6       1.1 

                   When it is determined that a loan is impaired, interest accruals are stopped and all interest income is recognized on the 
cash basis. 

A summary of the changes in the commercial mortgage loan valuation allowance is as follows:     
     For the year ended December 31, 
       2009  2008  2007 
  (in millions)
Balance at beginning of year  $ 57.0  $ 42.8  $ 32.2 
Provision       126.9  42.9         10.7 
Releases       (51.4)  (28.7)           (0.1) 
Balance at end of year  $ 132.5  $ 57.0  $ 42.8 

Real Estate 
 
                   Depreciation expense on invested real estate was $41.7 million, $32.0 million and $30.1 million in 2009, 2008 and 
2007, respectively. Accumulated depreciation was $290.1 million and $248.1 million as of December 31, 2009 and 2008, 
respectively. 
 
Other Investments 
 
                   Other investments include minority interests in unconsolidated entities, domestic joint ventures and partnerships and 
properties owned jointly with venture partners and operated by the partners. Such investments are generally accounted for using 
the equity method. In applying the equity method, we record our share of income or loss reported by the equity investees in net 
investment income. Summarized financial information for these unconsolidated entities is as follows: 

  December 31,   
  2009 2008 
  (in millions)
Total assets  $ 5,434.8  $ 7,604.2 
Total liabilities 2,851.2 4,606.0
Total equity  $ 2,583.6  $ 2,998.2 
 
Net investment in unconsolidated subsidiaries  $ 31.1  $ 61.9 

  For the year ended December 31, 
       2009  2008         2007 
  (in million)
Total revenues  $ 2,595.5  $ 2,202.5  $ 2,106.3 
Total expenses  2,771.2  2,415.0  1,606.7 
Net income (loss)  129.3  (30.3)  496.1 
 
Our share of net income (loss) of unconsolidated subsidiaries  2.5  (41.9)  33.2 

                   Derivative assets are carried at fair value and reported as a component of other investments. Certain seed money 
investments are also carried at fair value and reported as a component of other investments, with changes in fair value included 
in net realized capital gains (losses) on our consolidated statements of operations. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

6. Investments — (continued) 
Securities Posted as Collateral 

                   We posted $910.0 million in fixed maturities, available-for-sale securities at December 31, 2009, to satisfy collateral 
requirements primarily associated with our derivative credit support annex (collateral) agreements and a reinsurance 
arrangement. In addition, we posted $1,741.4 million in commercial mortgage loans as of December 31, 2009, to satisfy 
collateral requirements associated with our obligation under funding agreements with the Federal Home Loan Bank of Des 
Moines. Since we did not relinquish ownership rights on these securities, they are reported as fixed maturities, available-for- 
sale and commercial mortgage loans, respectively, on our consolidated statements of financial position. 
 
7. Derivative Financial Instruments 
 
                   Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be 
purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our 
asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies. We 
have not bought, sold or held these investments for trading purposes. 
Types of Derivative Instruments 
 
Interest Rate Contracts 
                   Interest rate risk is the risk that we will incur economic losses due to adverse changes in interest rates. Sources of 
interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, 
timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles 
from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to 
manage our exposure to fluctuations in interest rates. 
 
                   Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference 
between fixed rate and floating rate interest amounts based upon designated market rates or rate indices and an agreed upon 
notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by 
either party. Cash is paid or received based on the terms of the swap. These transactions are entered into pursuant to master 
agreements that provide for a single net payment to be made by one counterparty at each due date. We use interest rate swaps 
primarily to more closely match the interest rate characteristics of assets and liabilities arising from timing mismatches between 
assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of 
assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against 
changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) liability. The GMWB rider on our variable 
annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity 
and/or fixed income funds available with the product. 
 
                   A swaption is an option to enter into an interest rate swap at a future date. We have written these options and received a 
premium in order to transform our callable liabilities into fixed term liabilities. Swaptions provide us the benefit of the agreed- 
upon strike rate if the market rates for liabilities are higher, with the flexibility to enter into the current market rate swap if the 
market rates for liabilities are lower. Swaptions not only hedge against the downside risk, but also allow us to take advantage of 
any upside benefits. 
 
                   In exchange-traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of 
which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount 
equal to the difference in the daily market values of those contracts. We enter into exchange-traded futures with regulated futures 
commissions merchants who are members of a trading exchange. We have used exchange-traded futures to reduce market risks 
from changes in interest rates and to alter mismatches between the assets in a portfolio and the liabilities supported by those 
assets. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
Foreign Exchange Contracts 

                   Foreign currency risk is the risk that we will incur economic losses due to adverse fluctuations in foreign currency 
exchange rates. This risk arises from foreign currency-denominated funding agreements we issue and foreign currency- 
denominated fixed maturity securities we invest in. We may use currency swaps and currency forwards to hedge foreign 
currency risk. 
 
                   Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of 
principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is 
exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to- 
fixed rate; however, may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to 
master agreements that provide for a single net payment to be made by one counterparty for payments made in the same 
currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect 
to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. 
 
                   Currency forwards are contracts in which we agree with other parties to deliver a specified amount of an identified 
currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract 
is made at the specified future date. We have used currency forwards to reduce market risks from changes in currency exchange 
rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. 
 
Equity Contracts 
                   Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock. We use various 
derivatives to manage our exposure to equity risk, which arises from products in which the interest we credit is tied to an 
external equity index as well as products subject to minimum contractual guarantees. 
 
                   We may sell an investment-type insurance contract with attributes tied to market indices (an embedded derivative as 
noted below), in which case we write an equity call option to convert the overall contract into a fixed-rate liability, essentially 
eliminating the equity component altogether. We purchase equity call spreads to hedge the equity participation rates promised to 
contractholders in conjunction with our fixed deferred annuity products that credit interest based on changes in an external 
equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB 
liability related to the GMWB rider on our variable annuity product, as previously explained. 
 
Credit Contracts 
                   Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of 
principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable 
exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit 
exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names 
on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a 
referenced name's credit spread at the time the agreement is executed. In cases where we sell protection, at the same time we 
enter into these synthetic transactions, we buy a quality cash bond to match against the credit default swap. When selling 
protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the 
counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to 
the notional value of the credit default swap. 
 
Other Contracts 
                   Commodity Swaps. Commodity swaps are used to sell or buy protection on commodity prices in return for receiving or 
paying a quarterly premium. We purchased secured limited recourse notes from VIEs that are consolidated in our financial 
results. These VIEs use a commodity swap to enhance the return on an investment portfolio by selling protection on a static 
portfolio of commodity trigger swaps, each referencing a base or precious metal. The portfolio of commodity trigger swaps is a 
portfolio of deep out-of-the-money European puts on various base or precious metals. The VIEs provide mezzanine protection 
that the average spot rate will not fall below a certain trigger price on each commodity trigger swap in the portfolio and receive 
guaranteed quarterly premiums in return until maturity. At the same time the VIEs enter into this synthetic transaction, they buy 
a quality cash bond to match against the commodity swaps. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
 
                   Embedded Derivatives. We purchase or issue certain financial instruments or products that contain a derivative 
instrument that is embedded in the financial instrument or product. When it is determined that the embedded derivative 
possesses economic characteristics that are not clearly or closely related to the economic characteristics of the host contract and a 
separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the 
host for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated 
statements of financial position, is carried at fair value. 
 
                   We sell investment-type insurance contracts in which the return is tied to an external equity index, a leveraged inflation 
index or leveraged reference swap. We economically hedge the risk associated with these investment-type insurance contracts. 
 
                   We offer group benefit plan contracts that have guaranteed separate accounts as an investment option. 
 
                   We have structured investment relationships with trusts we have determined to be VIEs, which are consolidated in our 
financial statements. The notes issued by these trusts include obligations to deliver an underlying security to residual interest 
holders and the obligations contain an embedded derivative of the forecasted transaction to deliver the underlying security. 
 
                   We have fixed deferred annuities that credit interest based on changes in an external equity index. We also have certain 
variable annuity products with a GMWB rider, which provides that the contractholder will receive at least their principal deposit 
back through withdrawals of up to a specified annual amount, even if the account value is reduced to zero. Declines in the equity 
market may increase our exposure to benefits under contracts with the GMWB. We economically hedge the exposure in these 
annuity contracts, as previously explained. 
 
Exposure 
 
                   Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual 
amounts of these derivatives. Risk arises from changes in the fair value of the underlying instruments. We are also exposed to 
credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of 
derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial 
institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit 
enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments. 
 
                   Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. 
Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of 
exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are 
permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included 
transactions. For reporting purposes, we do not offset fair value amounts recognized for the right to reclaim cash collateral or the 
obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same 
counterparties under master netting agreements. 
 
                   We posted $273.7 million and $300.7 million in cash and securities under collateral arrangements as of December 31, 
2009, and December 31, 2008, respectively, to satisfy collateral requirements associated with our derivative credit support 
agreements. 
 
                   Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from 
each of the major credit rating agencies on our debt. If the rating on our debt were to fall below investment grade, it would be in 
violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand 
immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair 
value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a 
liability position without regard to netting under derivative credit support annex agreements as of December 31, 2009, and 
December 31, 2008, was $1,139.7 million and $2,100.0 million, respectively. With respect to these derivatives, we posted 
collateral of $273.7 million and $300.7 million as of December 31, 2009 and 2008, respectively, in the normal course of 
business, which reflects netting under derivative credit support annex agreements. If the credit-risk-related contingent features 
underlying these agreements were triggered on December 31, 2009, we would be required to post an additional $36.4 million of 
collateral to our counterparties. 
 
                   As of December 31, 2009, and December 31, 2008, we had received $341.3 million and $257.2 million, respectively, 
of cash collateral associated with our derivative credit support annex agreements. The cash collateral is included in other assets 
on the consolidated statements of financial position, with a corresponding liability reflecting our obligation to return the 
collateral recorded in other liabilities. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
 
                   Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard 
measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual 
flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the 
gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our 
derivative financial instruments by type were as follows: 

  December 31, 2009  December 31, 2008 
  (in millions)
Notional amounts of derivative instruments   
Interest rate contracts:   
   Interest rate swaps  $ 19,531.0  $ 23,683.6 
   Futures  43.3  97.3 
   Swaptions  —  94.8 
Foreign exchange contracts:   
   Foreign currency swaps  5,253.2  6,274.6 
Equity contracts:   
   Options  818.2  797.5 
   Futures  84.6  63.6 
Credit contracts:   
   Credit default swaps  1,586.4  1,948.9 
Other contracts:   
   Embedded derivative financial instruments  2,838.6  2,458.0 
   Commodity swaps  40.0  40.0 
Total notional amounts at end of period  $ 30,195.3  $ 35,458.3 
 
Credit exposure of derivative instruments   
Interest rate contracts:   
   Interest rate swaps  $ 578.9  $ 1,105.1 
Foreign exchange contracts:   
   Foreign currency swaps  578.7  558.1 
Equity contracts:   
   Options  149.8  222.1 
Credit contracts:   
   Credit default swaps  15.5  70.7 
Total gross credit exposure  1,322.9  1,956.0 
Less: collateral received  383.5  278.5 
Net credit exposure  $ 939.4  $ 1,677.5 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
                   The fair value of our derivative instruments classified as assets and liabilities was as follows: 

  Derivative assets (1) Derivative liabilities (2) 
  December 31, 2009  December 31, 2008  December 31, 2009  December 31, 2008 
  (in millions)
Derivatives designated as hedging             
   instruments             
Interest rate contracts  $ 81.5  $ 250.8  $ 309.1  $ 722.0 
Foreign exchange contracts  444.4  410.8    240.6  300.5 
Total derivatives designated as             
   hedging instruments  $ 525.9  $ 661.6  $ 549.7  $ 1,022.5 
 
Derivatives not designated as             
   hedging instruments             
Interest rate contracts  $ 433.4  $ 802.1  $ 336.8  $ 621.5 
Foreign exchange contracts  88.0    116.7    72.2  147.6 
Equity contracts  149.8    222.1           —  — 
Credit contracts  15.5    70.7    84.0  227.2 
Other contracts                           —    —    121.7  164.9 
Total derivatives not designated as             
   hedging instruments  $ 686.7  $ 1,211.6  $ 614.7  $ 1,161.2 
 
Total derivative instruments  $ 1,212.6  $ 1,873.2  $ 1,164.4  $ 2,183.7 

(1)  The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. 
(2)  The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial 
  position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of 
  $17.1 million and $39.9 million as of December 31, 2009, and December 31, 2008, respectively, are reported with 
  contractholder funds on the consolidated statements of financial position. 
 
Credit Derivatives Sold 
 
  When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity 
security instrument. The majority of our credit derivative contracts sold reference a single name or reference security (referred to 
as “single name credit default swaps”). The remainder of our credit derivatives reference either a basket or index of securities. 
These instruments are either referenced in an over-the-counter credit derivative transaction, or embedded within an investment 
structure that has been fully consolidated into our financial statements. 
 
  These credit derivative transactions are subject to events of default defined within the terms of the contract, which 
normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event 
occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the 
credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In 
certain cases, we also have purchased credit protection with identical underlyings to certain of our sold protection transactions. 
The effect of this purchased protection would reduce our total maximum future payments by $47.0 million and $60.8 million as 
of December 31, 2009, and December 31, 2008, respectively. These credit derivative transactions had a net fair value of $2.4 
million and $21.2 million as of December 31, 2009, and December 31, 2008, respectively. Our potential loss could also be 
reduced by any amount recovered in the default proceedings of the underlying credit name. 
 
  We purchased certain investment structures with embedded credit features that are fully consolidated into our financial 
statements. This consolidation results in recognition of the underlying credit derivatives and collateral within the structure, 
typically high quality fixed maturity securities that are owned by a special purpose vehicle. These credit derivatives reference a 
single name or several names in a basket structure. In the event of default, the collateral within the structure would typically be 
liquidated to pay the claims of the credit derivative counterparty. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
 
                   The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying 
asset class and external agency rating for the underlying reference security as of December 31, 2009, and December 31, 2008. 
The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, 
collateral or recourse features described above. 

  December 31, 2009
        Weighted 
      Maximum  average 
  Notional  Fair  future  expected life 
  amount  value  payments  (in years) 
  (in millions)
Single name credit default swaps         
     Corporate debt         
             AA  $ 135.0  $ (0.6)  $ 135.0  4.9 
             A  609.0  1.2  609.0  3.6 
             BBB  220.0  0.2  220.0  1.8 
             BB  10.0  —  10.0  0.8 
     Structured finance         
             AA  9.9  (6.0)  9.9  2.5 
             BBB  16.0  (15.2)  16.0  9.6 
             CCC  22.0  (20.2)  22.0  10.4 
Total single name credit default swaps  1,021.9  (40.6)  1,021.9  3.6 
 
Basket and index credit default swaps         
     Corporate debt         
             A  6.0  (0.1)  6.0  2.0 
             BBB  20.0  —  20.0  0.5 
             CCC  15.0  (11.9)  15.0  3.0 
       Government/municipalities         
             A  50.0  (9.3)  50.0  5.1 
       Structured finance         
             AA  20.0  (5.9)  20.0  5.4 
             BBB  5.0  (1.2)  5.0  15.9 
Total basket and index credit default swaps  116.0  (28.4)  116.0  4.4 
Total credit default swap protection sold  $ 1,137.9  $ (69.0)  $ 1,137.9  3.6 


Principal Life Insurance Company  
Notes to Consolidated Financial Statements — (continued)   
 
7. Derivative Financial Instruments — (continued)       
 
  December 31, 2008
        Weighted 
      Maximum  average 
  Notional  Fair  future  expected life 
  amount  value  payments  (in years) 
  (in millions)
Single name credit default swaps         
     Corporate debt         
             AAA  $ 10.0  $ (1.0)  $ 10.0  4.5 
             AA  135.0  (4.6)  135.0  5.4 
             A  554.0  (25.8)  554.0  4.8 
             BBB  305.0  (24.4)  305.0  2.7 
             BB  33.0  (1.4)  33.0  0.5 
     Structured finance         
             A  9.9  (7.9)  9.9  3.5 
             BBB  16.0  (15.0)  16.0  22.5 
             BB  22.0  (18.1)  22.0  7.1 
Total single name credit default swaps  1,084.9  (98.2)  1,084.9  4.4 
 
Basket and index credit default swaps         
     Corporate debt         
             AAA  35.0  (0.2)  35.0  1.0 
             A  20.0  (1.4)  20.0  1.6 
             BBB  35.0  (16.3)  35.0  2.6 
             BB  130.0  (53.3)  130.0  1.5 
             CCC  20.0  (20.0)  20.0  3.0 
     Government/municipalities         
             AA  50.0  (19.3)  50.0  6.2 
       Structured finance         
             AA  25.0  (15.4)  25.0  8.6 
Total basket and index credit default swaps  315.0  (125.9)  315.0  3.0 
Total credit default swap protection sold  $ 1,399.9  $ (224.1)  $ 1,399.9  4.1 

                   We also have invested in available-for-sale fixed maturity securities that contain credit default swaps that do not require 
bifurcation. These securities are subject to the credit risk of the issuer, normally a special purpose vehicle, which consists of the 
underlying credit default swaps and high quality fixed maturity securities that serve as collateral. A default event occurs if the 
cumulative losses exceed a specified attachment point, which is typically not the first loss of the portfolio. If a default event 
occurs that exceeds the specified attachment point, our investment may not be fully returned. We would have no future potential 
payments under these investments. The following tables show by the types of referenced/underlying asset class and external 
rating of the available-for-sale fixed maturity security our fixed maturity securities with nonbifurcatable embedded credit 
derivatives as of December 31, 2009, and December 31, 2008. 


                                                                                                     Principal Life Insurance Company   
                                                                         Notes to Consolidated Financial Statements — (continued)   
 
7. Derivative Financial Instruments — (continued)         
 
  December 31, 2009
        Weighted 
        average 
  Amortized    Carrying  expected life 
  cost    value  (in years) 
                             (in millions)
Corporate debt         
         AA  $ 15.0  $ 14.3  0.7 
         A  15.0    14.6  0.3 
         BBB  5.0    4.9  0.3 
         BB  35.0    29.1  5.1 
         CCC  51.4    43.8  4.5 
         C  22.7    6.5  6.6 
Total corporate debt  144.1    113.2  4.3 
Structured finance         
         AA  9.5    5.6  9.1 
         A  7.0    5.0  6.8 
         BBB  41.1    23.2  6.8 
         BB  32.6    17.4  7.3 
         B  7.4    3.1  7.3 
         CCC  16.1    5.7  19.4 
         CC  18.0    0.8  7.8 
         C  10.8    3.3  12.9 
Total structured finance  142.5    64.1  11.2 
Total fixed maturity securities with credit derivatives  $ 286.6  $ 177.3  8.3 
 
  December 31, 2008
        Weighted 
        average 
  Amortized    Carrying  expected life 
  cost    value  (in years) 
                             (in millions)
Corporate debt         
         AAA  $ 55.0  $ 25.9  4.5 
         AA  5.0    4.0  1.3 
         A  35.0    19.0  3.1 
         BB  44.9    16.5  5.9 
         B  1.4    1.4  8.7 
         C  8.8    5.7  8.0 
Total corporate debt  150.1    72.5  5.4 
Structured finance         
         AAA  32.0    17.1  5.5 
         AA  47.4    18.4  5.6 
         A  66.0    15.1  5.5 
         BBB  34.4    14.4  6.5 
         BB  54.8    7.0  8.2 
         CCC  0.4    0.4  3.0 
Total structured finance  235.0    72.4  6.1 
Total fixed maturity securities with credit derivatives  $ 385.1  $ 144.9  5.8 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
Fair Value Hedges 

                   We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets 
and liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of 
sensitivity to interest rate changes. 
 
                   We enter into currency exchange swap agreements to convert certain foreign denominated assets and liabilities into 
U.S. dollar floating-rate denominated instruments to eliminate the exposure to future currency volatility on those items. 
 
                   We also sell callable investment-type insurance contracts and use cancellable interest rate swaps and have written 
interest rate swaptions to hedge the changes in fair value of the callable feature. 
 
                   The net interest effect of interest rate swap and currency swap transactions for derivatives in fair value hedges is 
recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. 
 
                   Hedge effectiveness testing for fair value relationships is performed utilizing a regression analysis approach for both 
prospective and retrospective evaluations. This regression analysis will consider multiple data points for the assessment that the 
hedge continues to be highly effective in achieving offsetting changes in fair value. In certain periods, the comparison of the 
change in value of the derivative and the change in the value of the hedged item may not be offsetting at a specific period in time 
due to small movements in value. However, any amounts recorded as fair value hedges have shown to be highly effective in 
achieving offsetting changes in fair value both for present and future periods. 
 
                   The following table shows the effect of derivatives in fair value hedging relationships and the related hedged items on 
the consolidated statements of operations for the years ended December 31, 2009, 2008 and 2007. All gains or losses on 
derivatives were included in the assessment of hedge effectiveness. 

  Amount of gain (loss) recognized in net income    Amount of gain (loss) recognized in net 
  on derivatives for the year ended December 31,    income on related hedged item for the year 
Derivatives in fair    (1)      ended December 31, (1)
   value hedging        Hedged items in fair value       
relationships  2009  2008  2007     hedging relationships  2009  2008  2007 
    (in millions)        (in millions)   
Interest rate        Fixed maturities,       
   contracts  $ 308.6  $ (532.2)   $ (155.4)     available-for-sale  $ (264.0)  $ 510.8  $147.4 
Interest rate        Investment-type       
   contracts  (30.8)               47.8  12.7     insurance contracts  46.9  (68.1)  (16.8) 
Foreign               
   exchange        Fixed maturities,       
   contracts  4.8                 (0.1)  (9.6)     available-for-sale  (6.0)  0.6  9.8 
Foreign               
   exchange        Investment-type       
   contracts  82.4  (199.8)  26.7     insurance contracts  (86.2)  214.4  (27.5) 
Total  $ 365.0  $ (684.3)   $ (125.6)  Total  $ (309.3)  $ 657.7  $112.9 

(1)  The gain (loss) on both derivatives and hedged items in fair value relationships is reported in net realized capital gains 
  (losses) on the consolidated statements of operations. The net amount represents the ineffective portion of our fair value 
  hedges. 
 
           The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in fair 
value hedging relationships for the years ended December 31, 2009, 2008 and 2007. 

                     Amount of gain (loss) for the year ended December 31,
                                                 Hedged Item  2009  2008  2007
  (in millions)
Fixed maturities, available-for-sale (1)  $ (143.5)                         $(63.4) $23.1 
Investment-type insurance contracts (2)   106.2                           64.8  12.9 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 

(1)  Reported in net investment income on the consolidated statements of operations. 
(2)  Reported in benefits, claims and settlement expenses on the consolidated statements of operations. 
 
Cash Flow Hedges 
 
           We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial 
assets and liabilities and forecasted transactions. 
 
           We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign 
denominated assets and liabilities into U.S. dollar denominated fixed-rate instruments to eliminate the exposure to future 
currency volatility on those items. 
 
           The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is 
recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. 
 
           The maximum length of time that we are hedging our exposure to the variability in future cash flows for forecasted 
transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 10.5 years. 
At December 31, 2009, we had $45.7 million of gross unrealized gains reported in AOCI on the consolidated statements of 
financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of 
occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the 
deferred gain or loss is immediately reclassified from OCI into net income. During the year ended December 31, 2009, $40.4 
million of gross unrealized losses were reclassified from OCI into net realized capital gains (losses) as a result of the 
determination that hedged cash flows of a forecasted liability issuance were probable of not occurring. No amounts were 
reclassified from OCI into net income as a result of the determination that hedged cash flows were probable of not occurring 
during the years ended December 31, 2008 and 2007. 
 
           The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of 
operations and consolidated statements of financial position for the years ended December 31, 2009, 2008 and 2007. All gains or 
losses on derivatives were included in the assessment of hedge effectiveness. 

    Amount of gain (loss) recognized in    Amount of gain (loss) reclassified 
    AOCI on derivatives (effective   Location of gain (loss)       from AOCI on derivatives 
Derivatives in    portion) for the year ended  reclassified from AOCI  (effective portion) for the year 
cash flow    December 31, into  ended December 31, 
hedging           net income (effective       
 relationships   Related hedged item       2009  2008     2007  portion)  2009  2008  2007 
    (in millions)   (in millions)
Interest rate  Fixed maturities,        Net investment       
   contracts     available-for-sale  $ (124.4)  $ 206.7  $ 61.6     income  $ 4.8  $ 3.6  $ 4.5 
          Benefits, claims and       
Interest rate  Investment-type           settlement       
   contracts     insurance contracts  112.3  (38.1)  (18.1)     expenses         (1.0)  (0.3)  — 
Foreign                 
   exchange  Fixed maturities,        Net investment       
   contracts     available-for-sale  (216.8)           234.6  (63.0)     income         —  —  — 
Foreign          Benefits, claims and       
   exchange  Investment-type           settlement       
   contracts     insurance contracts  167.4  (316.0)  168.0     expenses         (5.6)  1.0  — 
          Net realized capital       
             gains (losses)  22.8  (4.0)  (3.9) 
Total    $ (61.5)  $ 87.2  $ 148.5  Total  $ 21.0  $ 0.3  $ 0.6 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

7. Derivative Financial Instruments — (continued) 
 
                   The following table shows the periodic settlements on interest rate contracts and foreign exchange contracts in cash 
flow hedging relationships for the years ended December 31, 2009, 2008 and 2007. 

  Amount of gain (loss) for the year ended December 31,
                                                 Hedged Item  2009  2008  2007
  (in millions)
Fixed maturities, available-for-sale (1)  $ 16.9                                $8.0   $13.1 
Investment-type insurance contracts (2)                                     (20.0)                             (2.7)  (14.4) 

(1)  Reported in net investment income on the consolidated statements of operations. 
(2)  Reported in benefits, claims and settlement expenses on the consolidated statements of operations. 
 
           The ineffective portion of our cash flow hedges is reported in net realized capital gains (losses) on the consolidated 
statements of operations. The net loss resulting from the ineffective portion of interest rate contracts in cash flow hedging 
relationships was zero for the years ended December 31, 2009, 2008 and 2007, respectively. The net gain resulting from the 
ineffective portion of foreign currency contracts in cash flow hedging relationships was $2.2 million, $0.4 million and $2.1 
million for the years ended December 31, 2009, 2008 and 2007, respectively. 
 
           We expect to reclassify net losses of $4.1 million from AOCI into net income in the next 12 months, which includes 
both net deferred losses on discontinued hedges and periodic settlements of active hedges. Actual amounts may vary from this 
amount as a result of market conditions. 
 
Derivatives Not Designated as Hedging Instruments 
 
           Our use of futures, certain swaptions and swaps, options and currency forwards are effective from an economic 
standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the 
market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, 
flow directly into net realized capital gains (losses). 
 
           The following tables show the effect of derivatives not designated as hedging instruments, including market value 
changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations 
for the years ended December 31, 2009, 2008 and 2007. Gains (losses) are reported in net realized capital gains (losses) on the 
consolidated statements of operations. 

  Amount of gain (loss) recognized in net income on derivatives for the year 
  ended December 31,
             Derivatives not designated as hedging instruments  2009  2008  2007 
  (in millions)
Interest rate contracts  $ (58.8)  $ 90.4   $(8.3) 
Foreign exchange contracts  68.3  (128.3)  3.7 
Equity contracts  (107.7)  86.3  10.3 
Credit contracts  61.7  (102.0)  (67.3) 
Other contracts (1)  7.8  (43.2)  (27.1) 
Total  $ (28.7)  $ (96.8)  $(88.7) 
 
(1) Primarily includes the change in fair value of embedded derivatives.     


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

8. Closed Block 
 
                   In connection with the 1998 MIHC formation, we formed a Closed Block to provide reasonable assurance to 
policyholders included therein that, after the formation of the MIHC, assets would be available to maintain dividends in 
aggregate in accordance with the 1997 policy dividend scales, if the experience underlying such scales continued. Certain of our 
assets were allocated to the Closed Block in an amount that produces cash flows which, together with anticipated revenue from 
policies and contracts included in the Closed Block, were expected to be sufficient to support the Closed Block policies, 
including, but not limited to, provisions for payment of claims, certain expenses, charges and taxes, and to provide for 
continuation of policy and contract dividends in aggregate in accordance with the 1997 dividend scales, if the experience 
underlying such scales continues, and to allow for appropriate adjustments in such scales, if such experience changes. Due to 
adjustable life policies being included in the Closed Block, the Closed Block is charged with amounts necessary to properly fund 
for certain adjustments, such as face amount and premium increases, that are made to these policies after the Closed Block 
inception date. These amounts are referred to as Funding Adjustment Charges and are treated as capital transfers from the 
Closed Block. 
 
                   Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block. 
Closed Block assets and liabilities are carried on the same basis as other similar assets and liabilities. We will continue to pay 
guaranteed benefits under all policies, including the policies within the Closed Block, in accordance with their terms. If the 
assets allocated to the Closed Block, the investment cash flows from those assets and the revenues from the policies included in 
the Closed Block, including investment income thereon, prove to be insufficient to pay the benefits guaranteed under the policies 
included in the Closed Block, we will be required to make such payments from their general funds. No additional policies were 
added to the Closed Block, nor was the Closed Block affected in any other way, as a result of the demutualization. 
 
                   A policyholder dividend obligation (“PDO”) is required to be established for earnings in the Closed Block that are not 
available to PFG stockholders. A model of the Closed Block was established to produce the pattern of expected earnings in the 
Closed Block, adjusted to eliminate the impact of related amounts in accumulated other comprehensive income. 
 
                   If actual cumulative earnings of the Closed Block are greater than the expected cumulative earnings of the Closed 
Block, only the expected cumulative earnings will be recognized in income with the excess recorded as a PDO. This PDO 
represents undistributed accumulated earnings that will be paid to Closed Block policyholders as additional policyholder 
dividends unless offset by future performance of the Closed Block that is less favorable than originally expected. If actual 
cumulative performance is less favorable than expected, only actual earnings will be recognized in income. At December 31, 
2009 and 2008, cumulative actual earnings have been less than cumulative expected earnings. Additionally, cumulative net 
unrealized gains (losses) did not exceed the cumulative expected earnings. Therefore, there was no PDO liability as of December 
31, 2009 and 2008. 


Principal Life Insurance Company     
Notes to Consolidated Financial Statements — (continued)     
 
8. Closed Block — (continued)     
 
                   Closed Block liabilities and assets designated to the Closed Block were as follows:     
  December 31, 
  2009  2008 
  (in millions) 
                   Closed Block liabilities     
                   Future policy benefits and claims  $ 5,172.9  $ 5,309.9 
                   Other policyholder funds  23.9  25.9 
                   Policyholder dividends payable  308.9  328.9 
                   Other liabilities  14.7  47.1 
                       Total Closed Block liabilities  5,520.4  5,711.8 
                   Assets designated to the Closed Block     
                   Fixed maturities, available-for-sale  2,748.6  2,429.5 
                   Fixed maturities, trading  31.0  32.8 
                   Equity securities, available-for-sale  14.4  15.9 
                   Mortgage loans  591.8  618.1 
                   Policy loans  747.2  758.2 
                   Other investments  157.5  183.8 
                       Total investments  4,290.5  4,038.3 
                   Cash and cash equivalents  33.6  39.4 
                   Accrued investment income  69.2  70.1 
                   Premiums due and other receivables  18.7  18.2 
                   Deferred income tax asset  133.3  270.4 
                       Total assets designated to the Closed Block  4,545.3  4,436.4 
                   Excess of Closed Block liabilities over assets designated to the Closed Block  975.1  1,275.4 
                   Amounts included in accumulated other comprehensive loss  (61.6)  (307.7) 
                   Maximum future earnings to be recognized from Closed Block assets and liabilities  $ 913.5  $ 967.7 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

8. Closed Block — (continued) 
                   Closed Block revenues and expenses were as follows: 

  For the year ended December 31, 
     2009       2008       2007 
  (in millions)
Revenues       
Premiums and other considerations  $ 508.6  $ 550.4  $ 576.6 
Net investment income  268.6  280.9  288.3 
Net realized capital losses       (23.5)  (12.7)       (12.9) 
   Total revenues  753.7  818.6  852.0 
Expenses       
Benefits, claims and settlement expenses  422.1  467.6  485.8 
Dividends to policyholders  235.9  261.8  286.4 
Operating expenses  6.8  7.4  12.1 
   Total expenses  664.8  736.8  784.3 
Closed Block revenues, net of Closed Block expenses, before income taxes  88.9  81.8  67.7 
Income taxes  28.1  25.6  20.7 
Closed Block revenues, net of Closed Block expenses and income taxes  60.8  56.2  47.0 
Funding adjustment charges  (6.6)  (8.5)  (9.4) 
Closed Block revenues, net of Closed Block expenses, income taxes and funding       
   adjustment charges  $ 54.2  $ 47.7  $ 37.6 

The change in maximum future earnings of the Closed Block was as follows: 

           For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Beginning of year  $ 967.7  $ 1,015.4  $ 1,053.0 
End of year           913.5  967.7  1,015.4 
Change in maximum future earnings  $ (54.2)  $ (47.7)  $ (37.6) 

                   We charge the Closed Block with federal income taxes, payroll taxes, state and local premium taxes and other state or 
local taxes, licenses and fees as provided in the plan of reorganization. 

9. Deferred Policy Acquisition Costs         
 
                   Policy acquisition costs deferred and amortized in 2009, 2008 and 2007 were as follows:     
  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
 Balance at beginning of year  $ 3,970.1  $ 2,626.7  $ 2,265.9 
 Cost deferred during the year  454.3  637.9  568.8 
 Amortized to expense during the year (1) 

93.9) 

 (375.0)  (351.4) 
 Adjustment related to unrealized (gains) losses on available-for-sale     
    securities and derivative instruments  (875.7)  1,080.5  143.4 
 Balance at end of year  $ 3,454.8  $ 3,970.1  $ 2,626.7 
 
(1) Includes adjustments for revisions to estimated gross profits.         


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

10. Insurance Liabilities 
Contractholder Funds 
                   Major components of contractholder funds in the consolidated statements of financial position are summarized as 
follows: 

  December 31, 
           2009  2008 
  (in millions)
Liabilities for investment-type insurance contracts:   
   GICs  $ 10,839.2  $ 11,857.4 
   Funding agreements  12,511.2  15,757.3 
   Other investment-type insurance contracts  891.4  987.1 
Total liabilities for investment-type insurance contracts  24,241.8  28,601.8 
Liabilities for individual annuities  11,428.4  10,672.3 
Universal life and other reserves  4,094.5  3,772.3 
Total contractholder funds  $ 39,764.7  $ 43,046.4 

                   Our GICs and funding agreements contain provisions limiting or prohibiting early surrenders, which typically include 
penalties for early surrenders, minimum notice requirements or, in the case of funding agreements with survivor options, 
minimum pre-death holding periods and specific maximum amounts. 
 
                   Funding agreements include those issued directly to nonqualified institutional investors, as well as to four separate 
programs where the funding agreements have been issued directly or indirectly to unconsolidated special purpose entities. 
Claims for principal and interest under funding agreements are afforded equal priority to claims of life insurance and annuity 
policyholders under insolvency provisions of Iowa Insurance Laws. 
 
                   We are authorized to issue up to $4.0 billion of funding agreements under a program established in 1998 to support the 
prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. As of December 31, 2009 and 2008, 
$2,502.2 million and $3,159.1 million, respectively, of liabilities are outstanding with respect to the issuance outstanding under 
this program. We do not anticipate any new issuance activity under this program as we are authorized to issue up to Euro 
4.0 billion (approximately USD$5.3 billion) of funding agreements under a program established in 2006 to support the 
prospective issuance of medium term notes by an unaffiliated entity in non-U.S. markets. The unaffiliated entity is an 
unconsolidated special purpose vehicle. As of December 31, 2009 and 2008, $1,404.2 million and $1,415.2 million, 
respectively, of liabilities are outstanding with respect to the issuances outstanding under this program. 
 
                   In addition, we were authorized to issue up to $7.0 billion of funding agreements under a program established in 2001 
to support the prospective issuance of medium term notes by an unaffiliated entity in both domestic and international markets. 
The unaffiliated entity is an unconsolidated qualifying special purpose entity. As of December 31, 2009 and 2008, 
$2,474.0 million and $2,468.7 million, respectively, of liabilities are being held with respect to the issuance outstanding under 
this program. We do not anticipate any new issuance activity under this program, given our December 2005 termination of the 
dealership agreement for this program and the availability of the SEC-registered program described in the following paragraph. 
 
                   We were authorized to issue up to $4.0 billion of funding agreements under a program established in March 2004 to 
support the prospective issuance of medium term notes by unaffiliated entities in both domestic and international markets. In 
February 2006, this program was amended to authorize issuance of up to an additional $5.0 billion in recognition of the use of 
nearly all $4.0 billion of initial issuance authorization. In recognition of the use of nearly all $9.0 billion, this program was 
amended in November 2007 to authorize issuance of up to an additional $5.0 billion. Under this program, both the notes and the 
supporting funding agreements are registered with the SEC. As of December 31, 2009 and 2008, $5,122.4 million and 
$7,655.5 million, respectively, of liabilities are being held with respect to the issuance outstanding under this program. In 
contrast with direct funding agreements, GIC issuances and the other three funding agreement-backed medium term note 
programs described above, our payment obligations on each funding agreement issued under this SEC-registered program are 
guaranteed by PFG. 
 
                   Due to a downturn in the credit market, we reduced the amount of medium term note issuances in 2008 and had no 
issuances in 2009. As economic conditions change, we will reassess the issuance of funding agreements to these medium term 
note programs. 


Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
10. Insurance Liabilities — (continued) 

Future Policy Benefits and Claims       
 
                   Activity associated with unpaid accident and health claims is summarized as follows:     
  For the year ended December 31, 
         2009  2008         2007 
  (in millions)
                   Balance at beginning of year  $ 991.8  $ 964.3  $ 877.2 
                   Incurred:       
                       Current year  1,888.3  1,994.5  2,160.6 
                       Prior years  (33.4)  (56.7)  (12.8) 
                   Total incurred  1,854.9  1,937.8  2,147.8 
                   Payments:       
                       Current year  1,507.1  1,588.6  1,738.5 
                       Prior years  314.0  321.7  322.2 
                   Total payments  1,821.1  1,910.3  2,060.7 
                   Balance at end of year:       
                       Current year  381.2  405.9  422.1 
                       Prior years  644.4  585.9  542.2 
                   Total balance at end of year  $ 1,025.6  $ 991.8  $ 964.3 
 
                   Supplemental information:       
                         Claim adjustment expense liabilities  $ 40.7  $ 39.1  $ 37.0 
                         Reinsurance recoverables  3.7  4.3  4.2 

                   Incurred liability adjustments relating to prior years, which affected current operations during 2009, 2008 and 2007, 
resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid 
accident and health claims were originally estimated. These trends have been considered in establishing the current year liability 
for unpaid accident and health claims. 
 
11. Debt 
 
Short-Term Debt 
 
                   As of December 31, 2009, we had credit facilities with various financial institutions in an aggregate amount of 
$644.0 million. As of December 31, 2009 and 2008, we had $312.1 million and $291.1 million, respectively, of outstanding 
borrowings related to our credit facilities, which consisted of a payable to PFSI, with zero assets pledged as support. Interest 
paid on intercompany debt was $1.3 million, $8.3 million and $19.6 million during 2009, 2008 and 2007, respectively. 
 
                   The weighted-average interest rates on short-term borrowings as of December 31, 2009 and 2008, were 0.4% and 
0.5%, respectively. 
 
Long-Term Debt 
 
                   The components of long-term debt as of December 31, 2009 and 2008, were as follows: 

               December 31, 
         2009  2008 
               (in millions) 
8% surplus notes payable, due 2044  99.2  99.2 
Other mortgages and notes payable  21.6  22.0 
Total long-term debt  $ 120.8   $121.2 

                   The amounts included above are net of the discount and premium associated with issuing these notes, which are being 
amortized to expense over their respective terms using the interest method. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

11. Debt — (continued) 
 
                   On March 10, 1994, we issued $100.0 million of surplus notes due March 1, 2044, at an 8% annual interest rate. None 
of our affiliates hold any portion of the notes. Each payment of interest and principal on the notes, however, may be made only 
with the prior approval of the Commissioner of Insurance of the State of Iowa (the “Commissioner”) and only to the extent that 
we have sufficient surplus earnings to make such payments. Interest of $8.0 million for each of the years ended December 31, 
2009, 2008 and 2007 was approved by the Commissioner, and charged to expense. 
                   Subject to Commissioner approval, the notes due March 1, 2044, may be redeemed at our election on or after March 1, 
2014, in whole or in part at a redemption price of approximately 102.3% of par. The approximate 2.3% premium is scheduled to 
gradually diminish over the following ten years. These notes may be redeemed on or after March 1, 2024, at a redemption price 
of 100% of the principal amount plus interest accrued to the date of redemption. 
                   The non-recourse mortgages, other mortgages and notes payable are primarily financings for real estate developments. 
Outstanding principal balances as of December 31, 2009, ranged from $5.9 million to $9.1 million per development with interest 
rates generally ranging from 5.5% to 5.8%. Outstanding principal balances as of December 31, 2008, ranged from $6.0 million 
to $9.3 million per development with interest rates generally ranging from 5.5% to 5.8%. Outstanding debt is secured by the 
underlying real estate properties, which were reported as real estate on our consolidated statements of financial position with a 
carrying value of $30.1 million and $30.4 million as of December 31, 2009 and 2008, respectively. 
                   At December 31, 2009, future annual maturities of the long-term debt were as follows (in millions): 

Year ending December 31:   
       2010  $ 0.4 
       2011  0.4 
       2012  0.4 
       2013  8.8 
       2014  6.0 
       Thereafter  104.8 
       Total future maturities of the long-term debt  $ 120.8 

12. Income Taxes 
                   Our income tax expense (benefit) from continuing operations was as follows: 

  For the year ended December 31, 
       2009  2008       2007 
  (in millions)
Current income taxes:       
   U.S. federal  $ 140.4  $ 116.0  $ 288.7 
   State and foreign  10.3  34.7  25.3 
Total current income taxes  150.7  150.7  314.0 
Deferred income taxes  (25.9)  (106.4)  (112.8) 
Total income taxes  $ 124.8  $ 44.3  $ 201.2 

                   Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between 
the U.S. corporate income tax rate and the effective tax rate from continuing operations is as follows: 

  For the year ended 
  December 31,
   2009  2008  2007 
U.S. corporate income tax rate  35%           35%  35% 
Dividends received deduction  (11)  (19)  (12) 
Interest exclusion from taxable income   (4)  (6)   (2) 
Other   (1)  —  — 
Effective income tax rate  19%           10%  21% 

                   As of December 31, 2009, the total unrecognized tax benefits were $52.6 million. Of this amount, $20.3 million, if 
recognized, would reduce the 2009 effective tax rate. We recognize interest and penalties related to uncertain tax positions in 
operating expenses. As of December 31, 2009 and 2008, we had recognized $22.5 million and $21.3 million of accumulated 
pre-tax interest and penalties related to unrecognized tax benefits, respectively. 


Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
12. Income Taxes — (continued) 

A summary of the changes in unrecognized tax benefits follows. 


                   In management’s judgment, the total deferred income tax asset is more likely than not to be realized. Included in the 
deferred income tax asset is the expected income tax benefit attributable to net unrealized losses on available-for-sale securities. 
There is no valuation allowance provided for the deferred tax asset attributable to unrealized losses on available-for-sale 
securities. Management expects to recover the unrealized losses by holding the securities until maturity or recovery in value; 
therefore, the related deferred tax asset is expected to reverse over time. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

12. Income Taxes — (continued) 
 
                   The total deferred income tax asset also includes capital and net operating loss carryforwards for tax purposes available 
to offset future capital gains and taxable income, respectively. The total capital loss carryforward, available to offset future 
capital gains, was $460.6 million as of December 31, 2009. If not used, the remaining 2008 capital loss carryforward of $121.1 
million and the $339.5 million capital loss generated in 2009 will expire in 2013 and 2014, respectively. Domestic state net 
operating loss carryforwards were $2.1 million as of December 31, 2009, and will expire between 2017 and 2029. We maintain 
valuation allowances by jurisdiction against the deferred income tax assets related to certain of these carryforwards, as utilization 
of these income tax benefits fail the more likely than not criteria in certain jurisdictions. A valuation allowance has been 
recorded on income tax benefits associated with state net operating loss carryforwards. Adjustments to the valuation allowance 
will be made if there is a change in management’s assessment of the amount of the deferred income tax asset that is more likely 
than not to be realized. 
 
                   Accumulated net operating losses of $485.2 million and $376.6 million at December 31, 2009 and 2008, respectively, 
are attributed to captive reinsurance companies that are temporarily excluded from our consolidated U.S. federal income tax 
return. These net operating losses will expire between 2021 and 2024. One of the captive reinsurance companies will be able to 
join the consolidated U.S. federal income tax return in 2012, with the other in 2013. All accumulated net operating losses are 
anticipated to be utilized before expiration. Therefore, no valuation allowance has been provided for the deferred income tax 
assets attributable to these net operating losses. 
 
                   The Internal Revenue Service (“IRS”) has completed examination of our consolidated federal income tax returns for 
years prior to 2004. We are contesting certain issues and have filed suit in the Court of Federal Claims, requesting refunds for 
the years 1995-2003. We are also litigating a partnership issue for the years 2002-2003 in the federal district court of Iowa. 
We had $241.0 million and $230.8 million of current income tax receivables associated with outstanding audit issues 
reported as other assets in our consolidated statements of financial position as of December 31, 2009 and 2008, respectively. 
We do not expect the litigation to be resolved within the next twelve months. 
 
                   The IRS commenced examination of the U.S. consolidated federal income tax returns for 2004-2005 in March 2007. 
The fieldwork is substantially complete and the final report is expected to be received sometime in the second or third quarter of 
2010. The statute of limitations for the 2004-2005 tax years expires on September 15, 2010. The IRS commenced examination 
of the U.S. consolidated federal income tax returns for 2006-2007 in March 2009 and of the tax return for 2008 in January 2010. 
 
                   We believe it is reasonably possible that the amount of our unrecognized tax benefits could increase by $0.0 million 
to $11.0 million within the next twelve months. The uncertainty is associated with our affiliate’s investment in a transaction 
that gave rise to foreign tax credits. We expect the IRS to disallow some or all of these foreign tax credits. We believe that we 
have adequate defenses against, or sufficient provisions for, the contested issues, but final resolution of the contested issues 
could take several years while legal remedies are pursued. Consequently, we do not expect the ultimate resolution of issues from 
tax years 1995 - 2003 to have a material impact on our net income. Similarly, we believe there are adequate defenses against, or 
sufficient provisions for, any challenges that might arise in tax years subsequent to 2003. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits 
 
                   We have post-retirement benefit plans covering substantially all of our employees and certain agents, including 
employees of other companies affiliated with our ultimate parent, PFG ("affiliated companies"). Actuarial information 
regarding the status of the post-retirement benefit plans is calculated for the total plan only. The affiliated company portion of 
the actuarial present value of the accumulated or projected benefit obligations, or net assets available for benefits, is not 
separately determined. However, we are reimbursed for employee benefits related to the affiliated companies. The 
reimbursement is not reflected in our employee and agent benefits disclosures. 
 
                   We have defined benefit pension plans covering substantially all of our employees and certain agents. Some of these 
plans provide supplemental pension benefits to employees with salaries and/or pension benefits in excess of the qualified plan 
limits imposed by federal tax law. The employees and agents are generally first eligible for the pension plans when they reach 
age 21. For plan participants employed prior to January 1, 2002, the pension benefits are based on the greater of a final average 
pay benefit or a cash balance benefit. The final average pay benefit is based on the years of service and generally the employee's 
or agent's average annual compensation during the last five years of employment. Partial benefit accrual of final average pay 
benefits is recognized from first eligibility until retirement based on attained service divided by potential service to age 65 with a 
minimum of 35 years of potential service. The cash balance portion of the plan started on January 1, 2002. An employee's 
account is credited with an amount based on the employee's salary, age and service. These credits accrue with interest. For plan 
participants hired on and after January 1, 2002, only the cash balance plan applies. Our policy is to fund the cost of providing 
pension benefits in the years that the employees and agents are providing service to us. Our funding policy for the qualified 
defined benefit plan is to contribute an amount annually at least equal to the minimum annual contribution required under the 
Employee Retirement Income Security Act (“ERISA”), and, generally, not greater than the maximum amount that can be 
deducted for federal income tax purposes. Our funding policy for the non-qualified benefit plan is to fund the plan in the years 
that the employees are providing service, taking into account the funded status of the trust. While we designate assets to cover 
the computed liability of the non-qualified plan, the assets are not included as part of the asset balances presented in this footnote 
as they do not qualify as plan assets in accordance with U.S. GAAP. 
 
                   We also provide certain health care, life insurance and long-term care benefits for retired employees. Subsidized retiree 
health benefits are provided for employees hired prior to January 1, 2002. Employees hired after December 31, 2001, have 
access to retiree health benefits but it is intended that they pay for the full cost of the coverage. The health care plans are 
contributory with participants' contributions adjusted annually. The contributions are based on the number of years of service 
and age at retirement for those hired prior to January 1, 2002. As part of the substantive plan, the retiree health contributions are 
assumed to be adjusted in the future as claim levels change. The life insurance plans are contributory for a small group of 
previously grandfathered participants that have elected supplemental coverage and dependent coverage. 
 
                   Covered employees are first eligible for the health and life postretirement benefits when they reach age 57 and have 
completed ten years of service with us. Retiree long-term care benefits are provided for employees whose retirement was 
effective prior to July 1, 2000. Partial benefit accrual of these health, life and long-term care benefits is recognized from the 
employee's date of hire until retirement based on attained service divided by potential service to age 65 with a minimum of 
35 years of potential service. Our policy is to fund the cost of providing retiree benefits in the years that the employees are 
providing service, taking into account the funded status of the trust. 
 
                   For 2007, we used a measurement date of October 1 for the pension and other postretirement benefit plans. For 2008 
and 2009, we used a December 31 measurement date in connection with our adoption of required measurement date guidance. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
Obligations and Funded Status 

                   The plans' combined funded status, reconciled to amounts recognized in the consolidated statements of financial 
position and consolidated statements of operations, was as follows: 

        Other postretirement 
  Pension benefits  benefits
  December 31, December 31, 
  2009  2008  2009  2008 
    (in millions)
Change in benefit obligation   
Benefit obligation at beginning of year  $ (1,712.1)  $ (1,603.8)  $ (335.0)  $ (271.9) 
Service cost  (51.4)  (62.0)  (11.3)  (10.5) 
Interest cost  (100.8)  (124.3)  (19.7)  (20.9) 
Actuarial loss  (26.8)  (8.1)  (2.8)  (44.0) 
Participant contributions                       —  —  (5.5)  (6.0) 
Benefits paid  72.8  86.1  15.0  19.1 
Other  20.9  —  (0.8)  (0.8) 
Benefit obligation at end of year  $ (1,797.4)  $ (1,712.1)  $ (360.1)  $ (335.0) 
Change in plan assets   
Fair value of plan assets at beginning of year  $ 1,010.5  $ 1,597.6  $ 362.0  $ 518.0 
Actual return on plan assets  217.0  (556.3)  68.3  (142.9) 
Employer contribution  95.6  55.3  0.7  — 
Participant contributions  —  —  5.5  6.0 
Benefits paid  (72.8)  (86.1)  (15.0)  (19.1) 
Fair value of plan assets at end of year  $ 1,250.3  $ 1,010.5  $ 421.5  $ 362.0 
Amount recognized in statement of financial position   
Other assets  $ —  $ —  $ 78.4  $ 43.3 
Other liabilities  (547.1)  (701.6)  (17.0)  (16.3) 
Total  $ (547.1)  $ (701.6)  $ 61.4  $ 27.0 
Amount recognized in accumulated other comprehensive   
   (income) loss   
Total net actuarial loss  $ 564.9  $ 768.2  $ 104.1  $ 152.9 
Prior service benefit  (52.7)  (39.5)  (6.8)  (8.8) 
Pre-tax accumulated other comprehensive loss  $ 512.2  $ 728.7  $ 97.3  $ 144.1 

                   The accumulated benefit obligation for all defined benefit pension plans was $1,640.5 million and $1,535.8 million at 
December 31, 2009 and 2008, respectively. 
 
                   Employer contributions to the pension plans include contributions made directly to the qualified pension plan assets 
and contributions from corporate assets to pay nonqualified pension benefits. Benefits paid from the pension plans include both 
qualified and nonqualified plan benefits. Nonqualified pension plan assets are not included as part of the asset balances 
presented in this footnote. The nonqualified pension plan assets are held in Rabbi trusts for the benefit of all nonqualified plan 
participants. The assets held in a Rabbi trust are available to satisfy the claims of general creditors only in the event of 
bankruptcy. Therefore, these assets are fully consolidated in our consolidated statements of financial position and are not 
reflected in our funded status as they do not qualify as plan assets under U.S. GAAP. The market value of assets held in these 
trusts was $245.1 million and $269.8 million as of December 31, 2009 and 2008, respectively. 
 
Pension Plan Changes and Plan Gains/Losses 
 
                   On January 1, 2010, benefits under the Principal Pension Plan are frozen for certain participants. This change was 
recognized as a prior service cost and resulted in a decrease in liabilities as of December 31, 2009. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
 
                   For the year ended December 31, 2009, the pension plans had an actuarial loss primarily due to a greater than expected 
cost of living adjustment and greater number of early retirements. For the year ended December 31, 2008, the pension plans had 
an actuarial loss primarily due to a decrease in the discount rate offset by a change in certain actuarial assumptions and methods. 
 
Other Postretirement Plan Changes and Plan Gains/Losses 
 
                   On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare 
Modernization Act”) was signed into law. The Medicare Modernization Act introduced a prescription drug benefit under 
Medicare (“Medicare Part D”) as well as a federal subsidy to sponsors of retiree medical benefit plans. During each of the years 
ended December 31, 2009, 2008 and 2007, the Medicare subsidies we received and accrued for were $0.8 million and included 
in service cost. 
 
                   An actuarial loss occurred during 2009 for the other postretirement benefit plans. This was due to a less than expected 
increase in retiree contributions, an increase in assumed health care costs for our agents and an increase in the trend assumption. 
An actuarial loss occurred during 2008 due to a decrease in the discount rate and a less than expected increase in retiree 
contributions, which was partially offset by a decrease in the trend assumption and a less than expected increase in health care 
claim costs. 
 
Information for pension plans with an accumulated benefit obligation in excess of plan assets: 
 
                   For 2009 and 2008, both the qualified and nonqualified plans had accumulated benefit obligations in excess of plan 
assets. As noted previously, the nonqualified plans have assets that are deposited in trusts that fail to meet the U.S. GAAP 
requirements to be included in plan assets; however, these assets are included in our consolidated statements of financial 
position. 

  December 31, 
       2009  2008 
  (in millions) 
Projected benefit obligation  $ 1,797.4   $1,712.1 
Accumulated benefit obligation         1,640.5  1,535.8 
Fair value of plan assets         1,250.3  1,010.5 

Information for other postretirement benefit plans with an accumulated postretirement benefit obligation in excess of 
plan assets: 

          December 31, 
            2009  2008 
                 (in millions) 
Accumulated postretirement benefit obligation          $ 98.7  $ 87.9 
Fair value of plan assets            81.7  71.6 
 
Components of net periodic benefit cost:               
  Pension benefits    Other postretirement benefits 
    For the year ended December 31,   
  2009  2008     2007    2009     2008  2007 
    (in millions)    
                   Service cost  $ 51.4  $ 62.0  $ 47.1  $ 11.3  $ 10.5  $ 8.0 
                   Interest cost  100.8  124.3         89.5    19.7  20.9  15.5 
                   Expected return on plan assets  (79.5)  (162.8)     (114.2)    (25.8)  (46.9)  (33.7) 
                   Amortization of prior service benefit  (7.7)  (9.6)           (8.3)    (2.1)  (3.1)  (2.6) 
                   Recognized net actuarial (gain) loss  92.6  1.5         10.0    9.2  (4.0)  (1.9) 
                   Net periodic benefit cost (income)  $ 157.6  $ 15.4  $ 24.1  $ 12.3  $ (22.6)  $ (14.7) 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
 
                   For 2007, we used a measurement date of October 1 for the pension and other postretirement plans. For 2008 and 2009, 
we used a December 31 measurement date in connection with our adoption of required measurement date guidance. Net 
periodic benefit cost shown above for 2008 covers the period of 15 months from October 1, 2007, through December 31, 2008. 
Net periodic benefit cost for the period from October 1, 2007, to December 31, 2007, was recognized as a direct adjustment to 
retained earnings during 2008 as required by the measurement date guidance. The breakdown of 2008 net periodic benefit cost 
between the two periods was as follows: 


                   The pension plans' actuarial gains and losses are amortized using a straight-line amortization method over the average 
remaining service period of plan participants. For the qualified pension plan, gains and losses are amortized without use of the 
10% allowable corridor. For the nonqualified pension plans and other postretirement benefit plans, the corridors allowed are 
used. 


                   Net actuarial (gain) loss and net prior service cost benefit have been recognized in accumulated other comprehensive 
income. 
 
                   The estimated net actuarial (gain) loss and prior service cost (benefit) that will be amortized from accumulated other 
comprehensive income into net periodic benefit cost for the pension benefits during the 2010 fiscal year are $67.6 million and 
$(10.1) million, respectively. The estimated net actuarial (gain) loss and prior service cost (benefit) for the postretirement 
benefits that will be amortized from accumulated other comprehensive income into net periodic benefit cost during the 2010 
fiscal year are $5.1 million and $(2.1) million, respectively. 
 
Assumptions: 
 
Weighted-average assumptions used to determine benefit obligations as disclosed under the Obligations and Funded 
Status section 



Principal Life Insurance Company 
Notes to Consolidated Financial Statements — (continued) 
 
13. Employee and Agent Benefits — (continued) 

Weighted-average assumptions used to determine net periodic benefit cost         
    Pension benefits     Other postretirement benefits 
                           For the year ended December 31,     
  2009         2008  2007  2009  2008  2007 
Discount rate  6.00%           6.30%   6.15%   6.00%  6.30%  6.15% 
Expected long-term return on plan assets  8.00%           8.25%   8.25%   7.30%  7.30%  7.30% 
Rate of compensation increase  5.00%           5.00%   5.00%   5.00%  5.00%  5.00% 

                   For the pension benefits, the expected return on plan assets is the long-term rate we expect to be earned based on the 
plans’ investment strategy. Historical and expected future returns of multiple asset classes were analyzed to develop a risk free 
rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long- 
term inflation component, the risk free real rate of return and the associated risk premium. A weighted average rate was 
developed based on those overall rates and the target asset allocation of the plans. Based on a review in 2008, the long-term 
expected return on plan assets was lowered to 8.00% for the 2009 expense calculation. 
 
                   For other postretirement benefits, the 7.30% expected long-term return on plan assets for 2009 is based on the weighted 
average expected long-term asset returns for the medical, life and long-term care plans. The expected long-term rates for the 
medical, life and long-term care plans are 7.25%, 7.75% and 5.85%, respectively. 

Assumed health care cost trend rates     
  December 31, 
   2009   2008 
Health care cost trend rate assumed for next year under age 65  11.0%  10.5% 
Health care cost trend rate assumed for next year age 65 and over  10.5%  10.0% 
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)  5.0%  5.0% 
Year that the rate reaches the ultimate trend rate  2021  2020 

                   Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one- 
percentage-point change in assumed health care cost trend rates would have the following effects: 

  1-percentage-  1-percentage- 
  point increase  point decrease 
                                   (in millions) 
Effect on total of service cost and interest cost components  $ 5.3                          $ (4.2) 
Effect on accumulated postretirement benefit obligation  (48.9)                         39.4 

Pension Plan and Other Postretirement Benefit Plan Assets 
 
  Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market 
participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used 
to measure fair value into three levels. 
•  Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets. Our Level 1 assets include 
  cash, fixed income investment funds and exchange traded equity securities. 
•  Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset, either 
  directly or indirectly. Our Level 2 assets primarily include fixed income and equity investment funds. 
•  Level 3 – Fair values are based on significant unobservable inputs for the asset. Our Level 3 assets include a real estate 
  investment fund and a general account investment of ours. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
 
                   Our pension plan assets consist of investments in separate accounts. Net asset value (“NAV”) of the separate accounts 
is calculated in a manner consistent with U.S. GAAP for investment companies and is determinative of their fair value. Several 
of the separate accounts invest in publicly quoted mutual funds or actively managed stocks. The fair value of the underlying 
mutual funds or stock is used to determine the NAV of the separate account, which is not publicly quoted. Some of the separate 
accounts also invest in fixed income securities. The fair value of the underlying securities is based on quoted prices of similar 
assets and used to determine the NAV of the separate account. One separate account invests in real estate, for which the fair 
value of the underlying real estate is based on unobservable inputs and used to determine the NAV of the separate account. The 
fair value of the underlying real estate is estimated using discounted cash flow valuation models that utilize public real estate 
market data inputs such as transaction prices, market rents, vacancy levels, leasing absorption, market cap rates and discount 
rates. In addition, each property is appraised annually by an independent appraiser. 
 
                   Our other postretirement benefit plan assets consist of cash, investments in fixed income security portfolios and 
investments in equity security portfolios. Because of the nature of cash, its carrying amount approximates fair value. The fair 
value of fixed income investment funds, U.S. equity portfolios and international equity portfolios is based on quoted prices in 
active markets for identical assets. The fair value of the Principal Life general account investment is the amount the plan would 
receive if withdrawing funds from this participating contract. The amount that would be received is calculated using a cash-out 
factor based on an associated pool of general account fixed income securities. The cash-out factor is a ratio of the asset 
investment value of these securities to asset book value. As the investment values change, the cash-out factor is adjusted, 
impacting the amount the plan receives at measurement date. To determine investment value for each category of assets, we 
project cash flows. This is done using contractual provisions for the assets, with adjustment for expected prepayments and call 
provisions. Projected cash flows are discounted to present value for each asset category. Interest rates for discounting are based 
on current rates on similar new assets in the general account based on asset strategy. 
 
Pension Plan Assets 
 
                   The fair value of the qualified pension plan’s assets by asset category as of the most recent measurement date is as 
follows: 

    As of December 31, 2009   
Assets /
  (liabilities)  Fair value hierarchy level
measured at fair
  value           Level 1    Level 2  Level 3 
    (in millions)
Asset category           
U.S. large cap equity portfolios (1)  $ 555.5  $ —         $ 555.5 $         — 
U.S. small/mid cap equity portfolios (2)  103.6                           —    103.6         — 
International equity portfolios (3)  215.5                           —    215.5         — 
Fixed income security portfolios (4)  288.3                           —    288.3         — 
Real estate investment portfolios:           
 Real estate investment trusts (5)  33.4                           —    33.4         — 
 Direct real estate investments (6)  54.0                           —    —         54.0 
Total  $ 1,250.3  $ —         $ 1,196.3 $         54.0 

(1)  The portfolios invest primarily in publicly traded equity securities of large U.S. companies. 
(2)  The portfolios invest primarily in publicly traded equity securities of mid-sized and small U.S. companies. 
(3)  The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. 
(4)  The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not 
  limited to, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, U.S. 
  Treasury securities, agency securities, asset-backed securities and collateralized mortgage obligations. 
(5)  The portfolio invests primarily in publicly traded securities of U.S. equity real estate investment trusts. 
(6)  The portfolio invests primarily in U.S. commercial real estate properties. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
 
                   The reconciliation for all assets measured at fair value using significant unobservable inputs (Level 3) for the year 
ended December 31, 2009, is as follows: 

    For the year ended December 31, 2009     
    Actual return gains (losses) on      
    plan assets     Ending 
  Beginning  Relating to          asset 
  asset  assets still  Relating to        balance 
  balance as  held at the  assets sold  Purchases,  Transfers  as of 
  of January  reporting  during the  sales and  in (out) of  December 
  1, 2009  date  period  settlements  Level 3  31, 2009 
      (in millions)
Asset category               
Direct real estate investments  $ 78.8  $ (24.8)   $ —  $ —  $ —  $ 54.0 
Total  $ 78.8  $ (24.8)   $ —  $ —  $ —  $ 54.0 

                   We have established an investment policy that provides the investment objectives and guidelines for the pension plan. 
Our investment strategy is to achieve the following: 
 
                   •  Obtain a reasonable long-term return consistent with the level of risk assumed and at a cost of operation within 
  prudent levels. Performance benchmarks are monitored. 
                   •  Ensure sufficient liquidity to meet the emerging benefit liabilities for the plan. 
                   •  Provide for diversification of assets in an effort to avoid the risk of large losses and maximize the investment 
  return to the pension plan consistent with market and economic risk. 
 
                   In administering the qualified pension plan’s asset allocation strategy, we consider the projected liability stream of 
benefit payments, the relationship between current and projected assets of the plan and the projected actuarial liabilities streams, 
the historical performance of capital markets adjusted for the perception of future short- and long-term capital market 
performance and the perception of future economic conditions. 
 
                   According to our investment policy, the overall target asset allocation for the qualified plan assets is: 

Asset category  Target allocation 
U.S. large cap equity portfolios and U.S. small/mid cap equity portfolios  35% - 60% 
International equity portfolios  5% - 20% 
Fixed income security portfolios  20% - 30% 
Real estate investment portfolios  3% - 10% 

Other Postretirement Benefit Plan Assets 
 
                   The fair value of the other postretirement benefit plans’ assets by asset category as of the most recent measurement date 
is as follows: 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued)         
    As of December 31, 2009   
Assets /
  (liabilities)  Fair value hierarchy level   
measured at fair
  value  Level 1  Level 2  Level 3 
    (in millions)
 Asset category         
 Cash (1)  $ 1.0  $ 1.0 $             —  $ — 
 Fixed income security portfolios:         
   Fixed income investment funds (2)  131.1  131.1             —                     — 
   Principal Life general account investment (3)  45.5                           —             —                     45.5 
 U.S. equity portfolios (4)  198.9  162.5             36.4                     — 
 International equity portfolios (5)  45.0  34.3             10.7                     — 
   Total  $ 421.5  $ 328.9 $             47.1  $ 45.5 

                   (1)  Represents amounts held in cash or cash equivalents. 
                   (2)  The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited 
  to, corporate bonds, mortgage-backed securities, commercial mortgage-backed securities, U.S. Treasury securities, 
  agency securities, asset-backed securities and collateralized mortgage obligations. 
                   (3)  The general account is invested in various fixed income securities. 
                   (4)  The portfolios invest primarily in publicly traded equity securities of large U.S. companies. 
                   (5)  The portfolios invest primarily in publicly traded equity securities of non-U.S. companies. 
 
                   $47.1 million of assets in the U.S. equity and international equity portfolios are included in a trust owned life insurance 
contract.   
 
                   The reconciliation for all assets measured at fair value using significant unobservable inputs (Level 3) for the year 
ended December 31, 2009, is as follows: 

    For the year ended December 31, 2009
    Actual return gains (losses) on         
    plan assets        Ending 
  Beginning  Relating to          asset 
  asset  assets still  Relating to        balance 
  balance as  held at the  assets sold  Purchases,  Transfers  as of 
  of January  reporting  during the  sales and  in (out) of  December 
  1, 2009  date  period  settlements  Level 3  31, 2009 
  (in millions)
Asset category               
Principal Life general account investment  $ 54.9  $ (1.3)   $ —  $ (8.1)  $ —  $ 45.5 
Total  $ 54.9  $ (1.3)   $ —  $ (8.1)  $ —  $ 45.5 

  According to our investment policy, the weighted average target asset allocation for the other postretirement benefit 
plans is:   

Asset category  Target allocation 
U.S. equity portfolios  45% - 65% 
International equity portfolios  5% - 15% 
Fixed income security portfolios  30% - 50% 

                   The investment strategies and policies for the other postretirement benefit plans are similar to those employed by the 
qualified pension plan. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
Contributions 

Our funding policy for the qualified pension plan is to fund the plan annually in an amount at least equal to the 
minimum annual contribution required under ERISA and, generally, not greater than the maximum amount that can be deducted 
for federal income tax purposes. We do not anticipate contributions will be needed to satisfy the minimum funding requirements 
of ERISA for our qualified plan. At this time, it is too early to estimate the amount that may be contributed, but it is possible that 
we may fund the plans in 2010 in the range of $20-$75 million. This includes funding for both our qualified and nonqualified 
pension plans. We may contribute to our other postretirement benefit plans in 2010 pending future analysis. 
 
Estimated Future Benefit Payments 
 
                   The estimated future benefit payments, which reflect expected future service, and the expected amount of tax-free 
subsidy receipts under Medicare Part D are: 

    Other postretirement benefits   
    (gross benefit payments,   
    including prescription drug  Amount of Medicare Part D 
  Pension benefits  benefits)  subsidy receipts 
  (in millions)
Year ending December 31:       
   2010  $ 71.9  $ 23.7  $ 1.1 
   2011  75.9  25.8  1.2 
   2012  81.5  28.1  1.5 
   2013  87.1  30.7  1.6 
   2014  93.4  33.5  1.9 
   2015-2019  559.2  217.7  13.5 

                   The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the 
benefit cost and the participants' share of the cost, which is funded by their contributions to the plan. 
 
                   The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the 
benefit obligation for the year ended December 31, 2009. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

13. Employee and Agent Benefits — (continued) 
 
                   The information that follows shows supplemental information for our defined benefit pension plans. Certain key 
summary data is shown separately for qualified and non-qualified plans. 

    For the year ended December 31,  
    2009        2008   
  Qualified Nonqualified    Qualified  Nonqualified   
  plan  plans  Total  plan    plans  Total 
  (in millions)
Amount recognized in statement of financial position               
Other assets  $ —  $ —  $ —  $ —  $ —  $ — 
Other liabilities  (249.9)  (297.2)  (547.1)  (399.1)    (302.5)  (701.6) 
Total  $ (249.9)  $ (297.2)  $ (547.1)  $ (399.1)  $ (302.5)  $ (701.6) 
Amount recognized in accumulated other               
   comprehensive loss               
Total net actuarial loss  $ 495.0  $ 69.9  $ 564.9  $ 690.3  $ 77.9  $ 768.2 
Prior service cost benefit  (33.9)  (18.8)  (52.7)  (28.6)    (10.9)  (39.5) 
Total pre-tax accumulated other comprehensive loss  $ 461.1  $ 51.1  $ 512.2  $ 661.7  $ 67.0  $ 728.7 
Components of net periodic benefit cost               
Service cost  $ 41.8  $ 9.6  $ 51.4  $ 50.5  $ 11.5  $ 62.0 
Interest cost  83.0  17.8  100.8  100.2    24.1  124.3 
Expected return on plan assets  (79.5)               —  (79.5)  (162.8)       —  (162.8) 
Amortization of prior service cost benefit  (5.4)  (2.3)  (7.7)  (6.7)    (2.9)  (9.6) 
Recognized net actuarial (gain) loss  86.5  6.1  92.6  (9.4)    10.9  1.5 
Net periodic benefit cost (income)  $ 126.4  $ 31.2  $ 157.6  $ (28.2)  $ 43.6  $ 15.4 
Other changes recognized in accumulated other               
   comprehensive (income) loss               
Net actuarial (gain) loss  $ (108.8)  $ (1.9)  $ (110.7)  $ 740.6  $ (13.4)  $ 727.2 
Prior service benefit  (10.7)  (10.2)  (20.9)             —         —  — 
Amortization of net gain (loss)  (86.5)  (6.1)  (92.6)  9.4    (10.9)  (1.5) 
Amortization of prior service cost benefit  5.4  2.3  7.7  6.7    2.9  9.6 
Total recognized in pre-tax accumulated other               
   comprehensive (income) loss  $ (200.6)  $ (15.9)  $ (216.5)  $ 756.7  $ (21.4)  $ 735.3 
Total recognized in net periodic benefit cost and pre-               
   tax accumulated other comprehensive (income) loss  $ (74.2)  $ 15.3  $ (58.9)  $ 728.5  $ 22.2  $ 750.7 

                   In addition, we have defined contribution plans that are generally available to all U.S. employees and agents. Eligible 
participants could not contribute more than $16,500 of their compensation to the plans in 2009. Effective January 1, 2006, we 
made several changes to the retirement programs. In general, the pension and supplemental executive retirement plan benefit 
formulas were reduced, and the 401(k) matching contribution was increased. Employees who were ages 47 or older with at least 
ten years of service on December 31, 2005, could elect to retain the prior benefit provisions and forgo receipt of the additional 
matching contributions. The employees who elected to retain the prior benefit provisions are referred to as “Grandfathered 
Choice Participants.” We match the Grandfathered Choice Participant's contribution at a 50% contribution rate up to a maximum 
contribution of 3% of the participant's compensation. For all other participants, we match the participant's contributions at a 75% 
contribution rate up to a maximum of 6% of the participant's compensation. The defined contribution plans allow employees to 
choose among various investment options, including PFG common stock. We contributed $33.9 million, $41.2 million and 
$40.0 million in 2009, 2008 and 2007, respectively, to our qualified defined contribution plans. 
 
                   We also have a nonqualified defined contribution plan available to select employees and agents which allows them to 
contribute amounts in excess of limits imposed by federal tax law. In 2009, we matched the Grandfathered Choice Participant's 
Contribution at a 50% contribution rate up to a maximum contribution of 3% of the participant's compensation. For all other 
participants, we matched the participant's contributions at a 75% contribution rate up to a maximum contribution of 6% of the 
participant's compensation. We contributed $4.6 million, $7.3 million and $7.5 million in 2009, 2008 and 2007, respectively, to 
our nonqualified defined contribution plans. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

14. Contingencies, Guarantees and Indemnifications 
Litigation and Regulatory Contingencies 

                   We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation 
naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation 
products and services, life, health and disability insurance. Some of the lawsuits are class actions, or purport to be, and some 
include claims for unspecified or substantial punitive and treble damages. In addition, regulatory bodies, such as state insurance 
departments, the SEC, the Financial Industry Regulatory Authority, the Department of Labor and other regulatory bodies 
regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, 
insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators 
and other governmental authorities relating to other industry issues and may receive additional requests, including subpoenas 
and interrogatories, in the future. 
 
                   On November 8, 2006, a trustee of Fairmount Park Inc. Retirement Savings Plan filed a putative class action lawsuit in 
the United States District Court for the Southern District of Illinois against us. Our Motion to Transfer Venue was granted and 
the case is now pending in the Southern District of Iowa. The complaint alleged, among other things, that we breached our 
alleged fiduciary duties while performing services to 401(k) plans by failing to disclose, or adequately disclose, to employers or 
plan participants the fact that we receive “revenue sharing fees from mutual funds that are included in its pre-packaged 401(k) 
plans” and allegedly failed to use the revenue to defray the expenses of the services provided to the plans. Plaintiff further 
alleged that these acts constitute prohibited transactions under ERISA. Plaintiff sought to certify a class of all retirement plans to 
which we were a service provider and for which we received and retained “revenue sharing” fees from mutual funds. On August 
27, 2008, the Plaintiff's Motion for Class Certification was denied. The Plaintiff filed a petition seeking permission to appeal that 
ruling. The petition was denied on October 28, 2008. On May 11, 2009, Plaintiff filed a new Motion for Class Certification. We 
are aggressively defending the lawsuit. 
 
                   On August 28, 2007, two plaintiffs, Walsh and Young, filed a putative class action lawsuit in the United States District 
Court for the Southern District of Iowa against us and Princor Financial Services Corporation (the “Principal Defendants”). The 
lawsuit alleges that the Principal Defendants breached alleged fiduciary duties to participants in employer-sponsored 401(k) 
plans who were retiring or leaving their respective plans, including providing misleading information and failing to act solely in 
the interests of the participants, resulting in alleged violations of ERISA. The Principal Defendants are aggressively defending 
the lawsuit. 
 
                   On July 15, 2009, Integrative Chiropractic Center, P.C. filed a putative class action lawsuit in the United States 
District Court of New Jersey against us and PFG ( the "Principal Defendants"). The complaint alleged the Principal 
Defendants systematically underpaid out of network health claims through use of a national database used to calculate the 
usual and customary rate. The plaintiff was also suing on behalf of a subset of purported class members who submitted 
claims under a group health plan subject to ERISA that was insured or administered by us, and were paid less than the 
amount submitted on the claim. The complaint alleged violations of ERISA, the Racketeer Influenced and Corrupt 
Organizations Act and the Sherman Act. On January 7, 2010, the Plaintiff’s Motion to Dismiss Without Prejudice was 
granted by the court. 
                   On October 28, 2009, Judith Curran filed a derivative action lawsuit on behalf of the Principal Funds, Inc. and 
Strategic Asset Management (SAM) Portfolio in the United States District Court for the Southern District of Iowa against 
Principal Management Corporation, Principal Global Investors, LLC, and Principal Funds Distributor, Inc. (the "Principal 
Defendants"). The lawsuit alleges the Principal Defendants breached their fiduciary duty under Section 36(b) of the 
Investment Company Act by charging advisory fees and distribution fees that were excessive. The Principal Defendants are 
aggressively defending the lawsuit. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

14. Contingencies, Guarantees and Indemnifications — (continued) 
                   On December 2, 2009 and December 4, 2009, two plaintiffs, Cruise and Mullaney respectively, filed putative class 
action lawsuits in the United States District Court for the Southern District of New York against us, PFG, Principal Global 
Investors, LLC, and Principal Real Estate Investors, LLC (the "Principal Defendants"). The lawsuits alleged the Principal 
Defendants failed to manage the Principal U.S. Property Separate Account (“PUSPSA”) in the best interests of investors, 
improperly imposed a withdrawal freeze on September 26, 2008, and instituted a withdrawal queue to honor withdrawal 
requests as sufficient liquidity became available. Plaintiffs allege these actions constitute a breach of fiduciary duties under 
ERISA. Plaintiffs seek to certify a class including all qualified ERISA plans and the participants of those plans that invested 
in PUSPSA between September 26, 2008 and the present that have suffered losses caused by the queue. The two lawsuits 
were consolidated and are now known as In re Principal U.S. Property Account Litigation. In addition, on December 11, 
2009, the complaint in Jover v. Principal Global Investors, et. al was filed with the U.S. District Court for the Southern 
District of New York. Jover asserts similar allegations to Cruise and Mullaney. We anticipate that the Jover complaint will 
be consolidated with In re Principal U.S. Property Account Litigation cases as the Order of Consolidation in that matter 
applies to Jover. The Principal Defendants are aggressively defending the lawsuits. 
                   While the outcome of any pending or future litigation or regulatory matter cannot be predicted with any degree of 
certainty, based upon information currently known and our historical experience in litigating or resolving claims, management 
does not believe that any pending litigation or regulatory matter will have a material adverse effect on our business or financial 
position. The outcome of such matters is inherently difficult to predict, given the large and indeterminate amounts sought in 
some proceedings, and unforeseen results can occur. It is possible that such outcomes could materially affect net income in a 
particular reporting period. 
 
Guarantees and Indemnifications 
 
                   In the normal course of business, we have provided guarantees to third parties primarily related to a former subsidiary, 
joint ventures and industrial revenue bonds. These agreements generally expire through 2019. The maximum exposure under 
these agreements as of December 31, 2009, was approximately $245.0 million. At inception, the fair value of such guarantees 
was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any 
liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under 
these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in 
agreements with such parties, the sale of assets held as collateral that can be liquidated in the event that performance is required 
under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse 
effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in 
a particular quarter or annual period. 
 
                   We are also subject to various other indemnification obligations issued in conjunction with certain transactions, 
primarily the sale of Principal Residential Mortgage, Inc. and other divestitures, acquisitions and financing transactions 
whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, 
while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the 
indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In 
addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within 
our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate 
legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications 
would not result in a material adverse effect on our business or financial position. While the likelihood is remote, 
performance under these indemnifications could materially affect net income in a particular quarter or annual period. 
 
Guaranty Funds 
 
                   Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for 
certain obligations of insolvent insurance companies to policyholders and claimants. A state’s fund assesses its members based 
on their pro rata market share of written premiums in the state for the classes of insurance for which the insolvent insurer was 
engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. We accrue 
liabilities for guaranty fund assessments when an assessment is probable, can be reasonably estimated and when the event 
obligating us to pay has occurred. While we cannot predict the amount and timing of any future assessments, we have 
established reserves we believe are adequate for assessments relating to insurance companies that are currently subject to 
insolvency proceedings. As of December 31, 2009 and 2008, the liability balance for guaranty fund assessments, which is not 
discounted, was $15.1 million and $16.2 million, respectively, and was reported within other liabilities in the consolidated 
statements of financial position. As of December 31, 2009 and 2008, $7.4 million and $8.1 million, respectively, related to 
premium tax offsets were included in premiums due and other receivables in the consolidated statements of financial position. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

14. Contingencies, Guarantees and Indemnifications — (continued) 
 
Operating Leases 
 
                   As a lessee, we lease office space, data processing equipment, office furniture and office equipment under various 
operating leases. Rental expense for the years ended December 31, 2009, 2008 and 2007, respectively, was $50.5 million, 
$49.3 million and $50.7 million. 
 
                   The following represents payments due by period for operating lease obligations as of December 31, 2009 (in 
millions): 

Year ending December 31:   
   2010  $ 45.7 
   2011  39.6 
   2012  29.6 
   2013  21.0 
   2014  15.3 
   2015 and thereafter  62.5 
  213.7 
   Less: Future sublease rental income on noncancelable leases  4.0 
   Total future minimum lease payments  $ 209.7 

Capital Leases 
 
                   We lease hardware storage equipment under capital leases. As of December 31, 2009 and 2008, these leases had a 
gross asset balance of $16.1 million and $21.0 million and accumulation depreciation of $9.2 million and $10.5 million, 
respectively. Depreciation expense for the years ended December 31, 2009, 2008 and 2007 was $5.2 million, $6.2 million 
and $5.0 million, respectively. 
 
                   As of December 31, 2007, we leased an aircraft and the depreciation expense for the year ended December 31, 2007 
was $0.6 million. This lease expired in early 2008. 
 
                   The following represents future minimum lease payments due by period for capital lease obligations as of December 
31, 2009 (in millions). 

Year ending December 31:   
   2010  $ 4.2 
   2011               2.5 
   2012               0.8 
   2013               0.1 
       Total               7.6 
       Less: Amounts representing interest               0.5 
       Net present value of minimum lease payments  $ 7.1 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

15. Stockholder’s Equity 
Accumulated Other Comprehensive Income (Loss) 
                   Comprehensive income includes all changes in stockholder’s equity during a period except those resulting from 
investments by stockholders and distributions to stockholders. 
                   The components of accumulated other comprehensive income (loss) were as follows: 

  Net unrealized  Net unrealized  Foreign  Unrecognized   Accumulated 
  gains on  gains on  currency    postretirement other 
  available-for-sale  derivative  translation  benefit  comprehensive 
  securities  instruments  adjustment  obligations  income 
  (in millions)
Balances at January 1, 2007  $ 579.0  $ 24.6  $ (5.5)  $ 14.5  $ 612.6 
Net change in unrealized gains on fixed           
   maturities, available-for-sale  (983.5)                   —               —                   —  (983.5) 
Net change in unrealized gains on equity           
   securities, available-for-sale                       (12.1)                   —               —                   —  (12.1) 
Net change in unrealized gains on equity           
   method subsidiaries and minority           
   interest adjustments  22.0                   —               —                   —  22.0 
Adjustments for assumed changes in           
   amortization pattern  130.3                   —               —                   —  130.3 
Net change in unrealized gains on           
   derivative instruments  —                   (7.6)               —                   —  (7.6) 
Change in net foreign currency           
   translation adjustment  —                   —  1.7                   —  1.7 
Change in unrecognized postretirement           
   benefit obligations  —                   —               —                   81.1  81.1 
Net change in provision for deferred           
   income tax benefit (expense)  295.5  4.6  1.3                 (28.4)  273.0 
Balances at December 31, 2007  31.2                   21.6                 (2.5)                   67.2  117.5 
Net change in unrealized gains on fixed           
   maturities, available-for-sale  (7,782.1)                   —               —                   —  (7,782.1) 
Net change in unrealized gains on equity           
   securities, available-for-sale                       (61.1)                   —               —                   —  (61.1) 
Net change in unrealized gains on equity           
   method subsidiaries and minority           
   interest adjustments  76.2                   —               —                   —  76.2 
Adjustments for assumed changes in           
   amortization pattern  1,173.0                   —               —                   —  1,173.0 
Net change in unrealized gains on           
   derivative instruments  —  124.5               —                   —  124.5 
Change in net foreign currency           
   translation adjustment  —                   —             (23.8)                   —  (23.8) 
Effects of changing postretirement           
   benefit plan measurement date  —                   —               —                   (3.1)  (3.1) 
Change in unrecognized postretirement           
   benefit obligations  —                   —               —  (973.1)  (973.1) 
Net change in provision for deferred           
   income tax benefit (expense)  2,307.9                 (43.5)  8.3  341.7  2,614.4 
Balances at December 31, 2008  $ (4,254.9)  $ 102.6  $ (18.0)  $ (567.3)  $ (4,737.6) 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

15. Stockholder’s Equity — (continued)           
  Net unrealized  Net unrealized  Foreign  Unrecognized   Accumulated 
  losses on  gains on  currency  postretirement  other 
  available-for-sale  derivative  translation  benefit  comprehensive 
  securities  instruments  adjustment  obligations  loss 
  (in millions)
Balances at January 1, 2009  $ (4,254.9)  $ 102.6  $ (18.0)  $ (567.3)  $ (4,737.6) 
Net change in unrealized losses on fixed           
   maturities, available-for-sale  6,548.5                   —               —                   —  6,548.5 
Net change in noncredit component of           
   impairment losses on fixed maturities,           
   available-for-sale  (260.9)                   —               —                   —  (260.9) 
Net change in unrealized losses on equity           
   securities, available-for-sale  47.8                   —               —                   —  47.8 
Net change in unrealized losses on equity           
   method subsidiaries and noncontrolling           
   interest adjustments  29.6                   —               —                   —  29.6 
Adjustments for assumed changes in           
   amortization pattern  (963.3)                   —               —                   —  (963.3) 
Net change in unrealized gains on           
   derivative instruments  —                 (66.4)               —                   —  (66.4) 
Change in net foreign currency           
   translation adjustment  —                   —               33.2                   —  33.2 
Change in unrecognized postretirement           
   benefit obligations  —                   —               —  263.3  263.3 
Cumulative effect of reclassifying           
   noncredit component of previously           
   recognized impairment losses on fixed           
   maturities, available-for-sale, net  (9.9)                   —               —                   —  (9.9) 
Net change in provision for deferred           
   income tax benefit (expense)  (1,890.6)                   23.3             (11.6)                 (92.2)  (1,971.1) 
Balances at December 31, 2009  $ (753.7)  $ 59.5   $ 3.6  $ (396.2)  $ (1,086.8) 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

15. Stockholder’s Equity — (continued) 
 
                   The following table sets forth the adjustments necessary to avoid duplication of items that are included as part of net 
income for a year that had been part of other comprehensive income in prior years: 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Unrealized gains (losses) on available-for-sale securities and derivative       
   instruments arising during the year  $ 2,992.7  $ (4,190.0)  $ (631.7) 
Adjustment for realized gains (losses) on available-for-sale securities and       
   derivative instruments included in net income  465.4  (15.1)  80.9 
Unrealized gains (losses) on available-for-sale securities and derivative       
   instruments, as reported  $ 3,458.1  $ (4,205.1)  $ (550.8) 

                   The above table includes unrealized gains (losses) on available-for-sale securities and derivatives in cash flow hedge 
relationships net of adjustments related to DPAC, sales inducements, unearned revenue reserves, changes in policyholder 
benefits and claims and applicable income taxes. 
 
Dividend Limitations 
 
                   Under Iowa law, we may pay stockholder dividends only from the earned surplus arising from our business and must 
receive the prior approval of the Commissioner to pay a stockholder dividend if such a stockholder dividend would exceed 
certain statutory limitations. The current statutory limitation is the greater of 10% of our policyholder surplus as of the preceding 
year-end or the net gain from operations from the previous calendar year. Based on this limitation and 2009 statutory results, we 
could pay approximately $608.7 million in stockholder dividends in 2010 without exceeding the statutory limitation. 
 
16. Fair Value of Financial Instruments 
 
                   We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of 
financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, 
particularly policyholder liabilities other than investment-type insurance contracts, are excluded from these fair value 
disclosure requirements. 
 
Determination of fair value 
 
                   The following discussion describes the valuation methodologies used for assets and liabilities measured at fair value 
on a recurring basis or disclosed at fair value. The techniques utilized in estimating the fair values of financial instruments are 
reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial 
position based on the fair value information of financial instruments presented below. 
 
                   Fair value estimates are made at a specific point in time, based on available market information and judgments about 
the financial instrument. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In 
addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate 
prices through an investment analyst review process, which includes validation through direct interaction with external 
sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an 
instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review 
process, which includes validation through direct interaction with external sources and use of internal models or other 
relevant information. We did not make any significant changes to our valuation processes during 2009. 
 
Fixed Maturities and Equity Securities 
 
                   In determining fair value for fixed maturities, our first priority is to obtain prices from third party pricing vendors. 
We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm that they 
are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated 
cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. If we are 
unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to corporate 
bonds, as described below, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing 
relevant market information, to the extent available. As of December 31, 2009, less than 1% of our fixed maturity securities, 
which were classified as Level 3 assets, were valued using internal pricing models. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 
 
                   For corporate bonds where quoted market prices are not available, a matrix pricing valuation approach is used. In this 
approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is 
assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific 
security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the 
appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation 
of an individual security within each pricing category may actually be impacted by company specific factors. 
 
                   Fair values of equity securities are determined using public quotations, when available. When public quotations are not 
available, we may utilize internal valuation methodologies appropriate for the specific asset. Fair values might also be 
determined using broker quotes or through the use of internal models or analysis. 
 
Mortgage Loans 
 
                   Fair values of commercial and residential mortgage loans are primarily determined by discounting the expected cash 
flows at current treasury rates plus an applicable risk spread, which reflects credit quality and maturity of the loans. The risk 
spread is based on market clearing levels for loans with comparable credit quality, maturities and risk. The fair value of 
mortgage loans may also be based on the fair value of the underlying real estate collateral, which is estimated using appraised 
values. 
 
Policy Loans 
 
                   Fair values of policy loans are estimated by discounting expected cash flows using a risk-free rate based on the U.S. 
Treasury curve. 
 
Derivatives 
 
                   The fair values of exchange-traded derivatives are determined through quoted market prices. The fair values of over- 
the-counter derivative instruments are determined using either pricing valuation models that utilize market observable inputs or 
broker quotes. The majority of our over-the-counter derivatives are valued with models that use market observable inputs. 
Significant inputs include interest rates, currency exchange rates, credit spread curves, equity prices, and volatility. These 
valuation models consider projected discounted cash flows, relevant swap curves, and appropriate implied volatilities. Certain 
over-the-counter derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes 
based on models that do not reflect the result of market transactions. 
 
                   Our derivative contracts are generally documented under International Swaps and Derivatives Association, Inc. Master 
Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. 
Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the LIBOR interest rate curve to 
value our positions, which includes a credit spread adjustment. This credit spread reflects an appropriate adjustment to our 
valuations for nonperformance risk based on the current ratings of our counterparties, as well as the collateral agreements in 
place. Counterparty credit risk is routinely monitored to ensure our adjustment for non-performance risk is appropriate. 
 
Other Investments 
 
                   Other investments reported at fair value primarily include seed money investments, for which the fair value is 
determined using the net asset value of the fund. The carrying amounts of other assets classified as other investments in the 
accompanying consolidated statements of financial position approximate their fair values. 
 
Cash and Cash Equivalents 
 
                   Because of the nature of these assets, carrying amounts approximate fair values. Fair values of cash equivalents may be 
determined using public quotations, when available. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 
Separate Account Assets 

                   Separate account assets include public equity, public and private debt securities and derivative instruments, for which 
fair values are determined as previously described. Separate account assets also include commercial mortgage loans, for which 
the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit 
quality and maturity of the loans. Finally, separate account assets include real estate, for which the fair value is estimated using 
discounted cash flow valuation models that utilize public real estate market data inputs such as transaction prices, market rents, 
vacancy levels, leasing absorption, market cap rates and discount rates. In addition, each property is appraised annually by an 
independent appraiser. 
 
Cash Collateral and Cash Collateral Payable 
 
                   The carrying amounts of cash collateral received and posted under derivative credit support annex (collateral) 
agreements and the carrying amount of the payable associated with our obligation to return the cash collateral received 
approximate their fair value. 
 
Investment-Type Insurance Contracts 
 
                   The fair values of our reserves and liabilities for investment-type insurance contracts are estimated using discounted 
cash flow analyses based on current interest rates, including non-performance risk, being offered for similar contracts with 
maturities consistent with those remaining for the investment-type contracts being valued. Investment-type insurance 
contracts include insurance, annuity and other policy contracts that do not involve significant mortality or morbidity risk and 
are only a portion of the policyholder liabilities appearing in the consolidated statements of financial position. Insurance 
contracts include insurance, annuity and other policy contracts that do involve significant mortality or morbidity risk. The fair 
values for our insurance contracts, other than investment-type contracts, are not required to be disclosed. 
 
                   Certain annuity contracts and other investment-type insurance contracts include embedded derivatives that have 
been bifurcated from the host contract. The key assumptions for calculating the fair value of the embedded derivative 
liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility, correlations, among 
other things) and policyholder behavior assumptions (such as lapse, mortality, utilization, withdrawal patterns, among other 
things). They are valued using a combination of historical data and actuarial judgment. Stochastic models are used to value 
the embedded derivatives that incorporate a spread reflecting our own creditworthiness and risk margins. 
 
                   The assumption for our own non-performance risk for investment-type insurance contracts and any embedded 
derivatives bifurcated from certain annuity and investment-type insurance contracts is based on the current market credit 
spreads for debt-like instruments that we have issued and are available in the market. 
 
Short-Term Debt 
 
                   The carrying amount of short-term debt approximates its fair value because of the relatively short time between 
origination of the debt instrument and its maturity. 
 
Long-Term Debt 
 
                   Fair values for debt issues are estimated using discounted cash flow analysis based on our incremental borrowing rate 
for similar borrowing arrangements. 
 
Separate Account Liabilities 
 
                   Fair values of separate account liabilities, excluding insurance-related elements, are estimated based on market 
assumptions around what a potential acquirer would pay for the associated block of business, including both the separate account 
assets and liabilities. As the applicable separate account assets are already reflected at fair value, any adjustment to the fair value 
of the block is an assumed adjustment to the separate account liabilities. To compute fair value, the separate account liabilities 
are originally set to equal separate account assets because these are pass-through contracts. The separate account liabilities are 
reduced by the amount of future fees expected to be collected that are intended to offset upfront acquisition costs already 
incurred that a potential acquirer would not have to pay. The estimated future fees are adjusted by an adverse deviation discount 
and the amount is then discounted at a risk-free rate as measured by the yield on U.S. Treasury securities at maturities aligned 
with the estimated timing of fee collection. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 
Bank Deposits 

The fair value of deposits of our Principal Bank subsidiary with no stated maturity, such as demand deposits, 
savings, and interest-bearing demand accounts, is equal to the amount payable on demand (i.e., their carrying amounts). The 
fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount is estimated using 
the rates currently offered for deposits of similar remaining maturities. The fair value estimates do not include the benefit that 
results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. 
 
Other Liabilities 
 
Certain obligations reported in other liabilities include embedded derivatives to deliver underlying securities of 
structured investments to third parties. The fair value of the embedded derivatives is calculated based on the value of the 
underlying securities utilizing the yield, credit quality and average maturity of each security. 

Carrying value and estimated fair value of financial instruments       
  December 31,
  2009 2008
  Carrying amount  Fair value  Carrying amount  Fair value 
  (in millions)
                   Assets (liabilities)         
                   Fixed maturities, available-for-sale  $ 43,518.4   $43,518.4   $38,064.0   $38,064.0 
                   Fixed maturities, trading  484.8  484.8  752.1  752.1 
                   Equity securities, available-for-sale  211.7  211.7  234.2  234.2 
                   Equity securities, trading  177.2  177.2  125.7  125.7 
                   Mortgage loans  11,250.5  10,808.7  12,633.8  12,001.6 
                   Policy loans  881.3  1,001.4  881.4  1,119.4 
                   Other investments  154.8  154.8  146.7  146.7 
                   Cash and cash equivalents  2,044.5  2,044.5  2,536.7  2,536.7 
                   Derivative assets  1,212.6  1,212.6  1,873.2  1,873.2 
                   Separate account assets  57,380.8  57,380.8  51,069.2  51,069.2 
                   Collateral received  374.3  374.3  277.6  277.6 
                   Investment-type insurance contracts  (35,670.2)  (34,178.4)  (39,274.1)  (36,043.3) 
                   Short-term debt  (312.1)  (312.1)  (291.1)  (291.1) 
                   Long-term debt  (120.8)  (104.7)  (121.2)  (109.4) 
                   Separate account liabilities  (51,559.8)  (50,709.1)  (46,549.6)  (45,609.3) 
                   Derivative liabilities  (1,048.1)  (1,048.1)  (2,034.5)  (2,034.5) 
                   Bank deposits  (2,185.8)  (2,188.5)  (2,142.6)  (2,167.0) 
                   Collateral posted  (355.6)  (355.6)  (277.6)  (277.6) 
                   Other liabilities  (99.2)  (99.2)  (109.3)  (109.3) 
 
Valuation hierarchy         

                   Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly 
transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs 
to valuation techniques used to measure fair value into three levels. 

• Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. Our Level 
         1 assets and liabilities primarily include exchange traded equity securities, mutual funds and U.S. Treasury bonds. 
• Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or 
         liability, either directly or indirectly. Our Level 2 assets and liabilities primarily include fixed maturity securities 
         (including public and private bonds), equity securities, over-the-counter derivatives and other investments for which 
         public quotations are not available but that are priced by third-party pricing services or internal models using 
         substantially all observable inputs. 
• Level 3 – Fair values are based on significant unobservable inputs for the asset or liability. Our Level 3 assets and 
         liabilities include certain fixed maturity securities, private equity securities, real estate and commercial mortgage loan 
         investments of our separate accounts, complex derivatives and embedded derivatives that must be priced using broker 
         quotes or other valuation methods that utilize at least one significant unobservable input. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 
Assets and liabilities measured at fair value on a recurring basis 
                   Assets and liabilities measured at fair value on a recurring basis are summarized below. 

    As of December 31, 2009   
  Assets /         
  (liabilities)  Fair value hierarchy level   
  measured at fair         
  value  Level 1    Level 2  Level 3 
                             (in millions)
Assets           
Fixed maturities, available-for-sale           
   U.S. government and agencies  $ 538.6  $ 11.2  $ 527.4  $ — 
   Non-U.S. governments  462.4  —    462.4  — 
   States and political subdivisions  2,048.6  —    2,037.1  11.5 
   Corporate  30,767.0                           95.2    30,008.1  663.7 
   Residential mortgage-backed securities  3,101.3  —    3,101.3  — 
   Commercial mortgage-backed securities  3,599.7  —    3,565.4  34.3 
   Collateralized debt obligations  369.6  —    72.8  296.8 
   Other debt obligations  2,631.2  —    2,554.6  76.6 
Total fixed maturities, available-for-sale  43,518.4  106.4    42,329.1  1,082.9 
Fixed maturities, trading  484.8  —    421.3  63.5 
Equity securities, available-for-sale  211.7  140.0    —  71.7 
Equity securities, trading  177.2                           91.2    86.0  — 
Derivative assets (1)  1,212.6  —    1,158.2  54.4 
Other investments (2)  63.1  4.1    59.0  — 
Cash equivalents (3)  1,156.2  614.7    541.5  — 
 Sub-total excluding separate account assets  46,824.0  956.4    44,595.1  1,272.5 
 
Separate account assets  57,380.8  39,511.7    13,872.1  3,997.0 
Total assets  $ 104,204.8  $ 40,468.1  $ 58,467.2  $ 5,269.5 
 
Liabilities           
Investment-type insurance contracts (4)  $ (17.1)  $ —  $ —  $ (17.1) 
Derivative liabilities (1)  (1,048.1)  —    (954.4)  (93.7) 
Other liabilities (4)  (99.2)  —    (10.1)  (89.1) 
Total liabilities  $ (1,164.4)  $ —  $ (964.5)  $ (199.9) 
 
Net assets (liabilities)  $ 103,040.4  $ 40,468.1  $ 57,502.7  $ 5,069.6 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 

    As of December 31, 2008   
  Assets /         
  (liabilities)  Fair value hierarchy level   
  measured at fair         
  value  Level 1    Level 2  Level 3 
    (in millions)
Assets           
Fixed maturities, available-for-sale  $ 38,064.0  $ 96.8  $ 36,831.2  $ 1,136.0 
Fixed maturities, trading  752.1  —    691.4  60.7 
Equity securities, available-for-sale  234.2  169.8    8.2  56.2 
Equity securities, trading  125.7  31.1    94.6  — 
Derivative assets (1)  1,873.2  —    1,772.5  100.7 
Other investments (2)  66.0  3.3    62.7  — 
Cash equivalents (3)  1,601.1  649.4    951.7  — 
 Sub-total excluding separate account assets  42,716.3  950.4    40,412.3  1,353.6 
 
Separate account assets  51,069.2  30,609.3    14,567.3  5,892.6 
Total assets  $ 93,785.5  $ 31,559.7  $ 54,979.6  $ 7,246.2 
 
Liabilities           
Investment-type insurance contracts (4)  $ (39.9)  $ —  $ —  $ (39.9) 
Derivative liabilities (1)  (2,034.5)  —    (1,767.6)  (266.9) 
Other liabilities (4)  (109.3)  —    (5.5)  (103.8) 
Total liabilities  $ (2,183.7)  $ —  $ (1,773.1)  $ (410.6) 
 
Net assets (liabilities)  $ 91,601.8  $ 31,559.7  $ 53,206.5  $ 6,835.6 

(1)  Within the consolidated statements of financial position, derivative assets are reported with other investments and 
  derivative liabilities are reported with other liabilities. 
(2)  Primarily includes seed money investments reported at fair value. 
(3)  Includes short-term investments with a maturity date of three months or less when purchased. 
(4)  Includes bifurcated embedded derivatives that are reported at fair value within the same line item in the consolidated 
  statements of financial position in which the host contract is reported. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

16. Fair Value of Financial Instruments — (continued) 
Changes in Level 3 fair value measurements 

                   The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant 
unobservable inputs (Level 3) are summarized as follows: 

    For the year ended December 31, 2009   Changes in 
  Beginning  Total realized/unrealized gains      Ending  unrealized 
  asset /  (losses)      asset /  gains (losses) 
  (liability)      Purchases,    (liability)  included in 
  balance as    Included in  sales,  Transfers  balance  net income 
  of  Included in  other  issuances  in (out) of  as of  relating to 
  December  net income  comprehensive  and  Level 3  December  positions still 
  31, 2008         (1)  income  settlements       (3)  31, 2009  held (1) 
    (in millions)
Assets               
Fixed maturities, available-for-sale               
   Non-U.S. governments  $ 33.6  $ (10.2)  $ 2.6  $ (26.0)  $ —  $ —  $ — 
   State and political subdivisions  —             —  1.3  —         10.2  11.5  — 
   Corporate  725.5  (25.9)  159.4  (382.9)       187.6  663.7  (31.5) 
   Commercial mortgage-backed               
securities  58.0  (0.3)  9.8  (12.1)       (21.1)  34.3  — 
   Collateralized debt obligations  236.8  (63.9)  150.4  (10.6)       (15.9)  296.8  (63.5) 
   Other debt obligations  82.1  (2.1)  17.4  25.9       (46.7)  76.6  — 
Total fixed maturities, available-               
   for-sale  1,136.0  (102.4)  340.9  (405.7)       114.1  1,082.9  (95.0) 
Fixed maturities, trading  60.7  13.0  —  —       (10.2)  63.5  13.1 
Equity securities, available-for-sale  56.2  (0.2)  30.3  (43.7)         29.1  71.7  (2.0) 
Derivative assets  100.7  (43.6)  (0.2)  (2.5)         —  54.4  (30.5) 
Separate account assets  5,892.6  (1,577.4)  —  (290.2)       (28.0)  3,997.0  (1,464.2) 
 
Liabilities               
Investment-type insurance               
   contracts  (39.9)  (3.0)  —  25.8         —  (17.1)  (3.0) 
Derivative liabilities  (266.9)  141.4  7.2  24.6         —  (93.7)  88.8 
Other liabilities (2)  (103.8)             —  33.2  (18.5)         —  (89.1)  — 
 
  For the year ended December 31, 2008   Changes in 
    Total realized/unrealized gains      Ending  unrealized 
  Beginning  (losses)      asset /  gains (losses) 
  asset /      Purchases,    (liability)  included in 
  (liability)    Included in  sales,  Transfers  balance  net income 
  balance as  Included in  other  issuances  in (out) of  as of  relating to 
  of January  net income  comprehensive  and  Level 3  December  positions still 
  1, 2008  (1)  income  settlements  (3)  31, 2008  held (1) 
    (in millions)  
Assets               
Fixed maturities, available-for-sale  $ 2,153.6  $ (148.5)  $ (508.7)  $ (567.8)  $ 207.4  $ 1,136.0  $ (116.7) 
Fixed maturities, trading  92.3  (19.1)  —  (11.4)           (1.1)  60.7  (19.1) 
Equity securities, available-for-sale  51.1  (41.5)  (12.1)  20.7         38.0  56.2  (35.3) 
Derivative assets  54.3  74.7  (15.8)  (12.5)         —  100.7  62.4 
Separate account assets  7,122.2  (958.4)  —  (166.9)  (104.3)  5,892.6  (944.1) 
 
Liabilities               
Investment-type insurance               
   contracts  (49.3)  (38.2)  —  47.6         —  (39.9)  (50.3) 
Derivative liabilities  (62.3)  (200.0)  (8.1)  3.5         —  (266.9)  (192.9) 
Other liabilities (2)  (155.6)             —  70.0  (18.2)         —  (103.8)  — 


Principal Life Insurance Company
Notes to Consolidated Financial Statements (continued) 

16. Fair Value of Financial Instruments — (continued) 
 
(1)  Both realized gains (losses) and mark-to-market unrealized gains (losses) for the year ended December 31, 2009, are 
  generally reported in net realized capital gains (losses) within the consolidated statements of operations. Realized and 
  unrealized gains (losses) on certain fixed maturities, trading are reported in net investment income within the 
  consolidated statements of operations. Gains and losses for separate account assets do not impact net income as the 
  change in value of separate account assets is offset by a change in value of separate account liabilities. 
 
(2)  Certain embedded derivatives reported in other liabilities are part of a cash flow hedge, with the effective portion of the 
  unrealized gains (losses) recorded in accumulated other comprehensive income. 
 
(3)  Assets transferred into and out of Level 3 during 2009 were $518.6 million and $413.6 million, respectively, and during 
  2008 were $1,405.6 million and $1,265.6 million, respectively. Assets transferred into Level 3 include assets added to 
  our “watch list” that were previously priced using a spread pricing matrix that is no longer relevant when applied to 
  asset-specific situations. The majority of assets that transferred out of Level 3 include those for which we are now able 
  to obtain pricing from a recognized third party pricing vendor. 
 
Assets and liabilities measured at fair value on a nonrecurring basis 
 
           Certain assets are measured at fair value on a nonrecurring basis. During 2009, mortgage loans with an aggregate 
cost of $11.9 million had been written down to fair value of $3.9 million. This write down resulted in a loss of $8.0 million 
that was recorded in net realized capital gains (losses). These collateral-dependent mortgage loans are a Level 3 fair value 
measurement, as fair value is based on the fair value of the underlying real estate collateral, which is estimated using 
appraised values. 
 
           During 2009, real estate with an aggregate cost of $1.7 million had been written down to fair value of $0.9 million. 
This write down resulted in a loss of $0.8 million that was recorded in net realized capital gains (losses). This is a Level 3 fair 
value measurement, as the fair value of the real estate is estimated using appraised values that involve significant 
unobservable inputs. 
 
           During 2008, mortgage servicing rights with an aggregate cost of $13.8 million had been written down to fair value 
of $12.3 million, resulting in a charge of $1.5 million that was recorded in operating expenses. These mortgage servicing 
rights are a Level 3 fair value measurement, as fair value is determined by calculating the present value of the future 
servicing cash flows from the underlying mortgage loans. 
 
Transition 
 
           In connection with our adoption of fair value measurement accounting on January 1, 2008, we recorded a $13.0 
million pre-tax gain in net realized capital gains (losses) resulting from the incorporation of our own creditworthiness and 
additional risk margins in the valuation of certain embedded derivatives recorded at fair value. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

17. Statutory Insurance Financial Information 
 
                   We prepare statutory financial statements in accordance with the accounting practices prescribed or permitted by the 
Insurance Division of the Department of Commerce of the State of Iowa (the “State of Iowa”). The State of Iowa recognizes 
only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial 
condition and results of operations of an insurance company to determine its solvency under the Iowa Insurance Law. The 
National Association of Insurance Commissioners' (“NAIC”) Accounting Practices and Procedures Manual has been adopted as 
a component of prescribed practices by the State of Iowa. The Commissioner has the right to permit other specific practices that 
deviate from prescribed practices. Our use of prescribed and permitted statutory accounting practices has resulted in higher 
statutory surplus of $246.1 million relative to the accounting practices and procedures of the NAIC primarily due to a state 
prescribed practice associated with reinsurance of our term life products and “secondary” or “no lapse” guarantee provisions on 
our universal life products. Statutory accounting practices differ from U.S. GAAP primarily due to charging policy acquisition 
costs to expense as incurred, establishing reserves using different actuarial assumptions, valuing investments on a different basis 
and not admitting certain assets, including certain net deferred income tax assets. 
 
                   Life and health insurance companies are subject to certain risk-based capital (“RBC”) requirements as specified by the 
NAIC. Under those requirements, the amount of capital and surplus maintained by a life and health insurance company is to be 
determined based on the various risk factors related to it. At December 31, 2009, we meet the minimum RBC requirements. 

                   Statutory net income and statutory surplus were as follows:       
 
  As of or for the year ended December 31, 
  2009  2008  2007 
  (in millions)
                   Statutory net income  $ 42.1  $ 83.3  $ 540.2 
                   Statutory surplus  4,586.2             4,807.7  3,695.0 
 
18. Segment Information       

                   We provide financial products and services through the following segments: U.S. Asset Accumulation, Global Asset 
Management and Life and Health Insurance. In addition, there is a Corporate segment. The segments are managed and reported 
separately because they provide different products and services, have different strategies or have different markets and 
distribution channels. 
 
                   The U.S. Asset Accumulation segment provides retirement and related financial products and services primarily to 
businesses, their employees and other individuals. 
 
                   The Global Asset Management segment provides asset management services to our asset accumulation business, our 
life and health insurance operations, the Corporate segment and third-party clients. 
 
                   The Life and Health insurance segment provides individual life insurance, group health insurance and specialty 
benefits, which consists of group dental and vision insurance, individual and group disability insurance and group life insurance, 
throughout the United States. 
 
                   The Corporate segment manages the assets representing capital that has not been allocated to any other segment. 
Financial results of the Corporate segment primarily reflect our financing activities (including interest expense and preferred 
stock dividends), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain 
income, expenses and other after-tax adjustments not allocated to the segments based on the nature of such items. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

18. Segment Information — (continued) 
 
                   Management uses segment operating earnings in goal setting, as a basis for determining employee compensation and 
in evaluating performance on a basis comparable to that used by securities analysts. We determine segment operating 
earnings by adjusting U.S. GAAP net income for net realized capital gains (losses), as adjusted, and other after-tax 
adjustments which management believes are not indicative of overall operating trends. Net realized capital gains (losses), as 
adjusted, are net of income taxes, related changes in the amortization pattern of DPAC and sales inducements, recognition of 
deferred front-end fee revenues for sales charges on retirement products and services, net realized capital gains and losses 
distributed, minority interest capital gains and losses and certain market value adjustments to fee revenues. Net realized 
capital gains (losses), as adjusted, exclude periodic settlements and accruals on non-hedge derivative instruments and exclude 
certain market value adjustments of embedded derivatives. Segment operating revenues exclude net realized capital gains 
(losses) (except periodic settlements and accruals on non-hedge derivatives), including their impact on recognition of front- 
end fee revenues and certain market value adjustments to fee revenues and revenue from our terminated commercial 
mortgage securities issuance operation. Segment operating revenues include operating revenues from real estate properties 
that qualify for discontinued operations. While these items may be significant components in understanding and assessing the 
consolidated financial performance, management believes the presentation of segment operating earnings enhances the 
understanding of our results of operations by highlighting earnings attributable to the normal, ongoing operations of the 
business. 
 
                   The accounting policies of the segments are consistent with the accounting policies for the consolidated financial 
statements, with the exception of income tax allocation. The Corporate segment functions to absorb the risk inherent in 
interpreting and applying tax law. The segments are allocated tax adjustments consistent with the positions we took on tax 
returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any 
disputes. 
 
                   The following tables summarize selected financial information by segment and reconcile segment totals to those 
reported in the consolidated financial statements: 

  December 31, 
  2009  2008 
  (in millions) 
Assets:     
U.S. Asset Accumulation  $ 106,179.2  $ 99,774.7 
Global Asset Management  1,069.0  1,123.3 
Life and Health Insurance  15,606.4  14,497.9 
Corporate  2,844.2  3,727.7 
   Total consolidated assets  $ 125,698.8  $ 119,123.6 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

18. Segment Information — (continued) 

  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
Operating revenues by segment:       
U.S. Asset Accumulation  $ 3,673.7  $ 4,331.3  $ 4,617.1 
Global Asset Management  392.8  545.8  529.0 
Life and Health Insurance  4,426.8  4,660.0  4,840.4 
Corporate  (97.3)  (115.5)  (65.1) 
   Total segment operating revenues  8,396.0  9,421.6  9,921.4 
   Net realized capital gains (losses) (except periodic settlements and       
       accruals on non-hedge derivatives), including recognition of       
       front-end fee revenues and certain market value adjustments to fee       
       revenues  (522.1)  (685.5)  (362.5) 
   Terminated commercial mortgage securities issuance operation  (0.5)  (32.1)  30.1 
   Operating revenues from discontinued real estate investments  —  —  (0.4) 
   Total revenues per consolidated statements of operations  $ 7,873.4  $ 8,704.0  $ 9,588.6 
Operating earnings (loss) by segment, net of related income taxes:       
U.S. Asset Accumulation  $ 485.5  $ 499.6  $ 605.5 
Global Asset Management  33.8  86.6  98.0 
Life and Health Insurance  245.7  272.2  223.3 
Corporate  (7.2)  18.5  45.1 
   Total segment operating earnings, net of related income taxes  757.8  876.9  971.9 
Net realized capital losses, as adjusted (1)  (254.7)  (453.4)  (245.4) 
Other after-tax adjustments (2)  (0.7)  (20.4)  14.6 
   Net income attributable to Principal Life Insurance Company per       
       consolidated statements of operations  $ 502.4  $ 403.1  $ 741.1 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

18. Segment Information — (continued) 
(1)  Net realized capital losses, as adjusted, is derived as follows: 

  For the year ended December 31, 
       2009  2008  2007 
  (in millions)
Net realized capital losses:       
Net realized capital gains losses  $ (445.3)  $ (622.6)  $ (348.4) 
Periodic settlements and accruals on non-hedge derivatives  (70.9)  (59.0)  (18.8) 
Certain market value adjustments to fee revenues  (1.5)  (3.9)  (4.0) 
Recognition of front-end fee revenues  (4.4)  —  8.7 
   Net realized capital losses, net of related revenue adjustments  (522.1)  (685.5)  (362.5) 
Amortization of deferred policy acquisition and sales inducement costs related to net       
   realized capital gains (losses)  155.2  (47.2)  10.4 
Capital (gains) losses distributed  (18.8)  49.6  (10.9) 
Certain market value adjustments of embedded derivatives  11.8  (9.5)  — 
Noncontrolling interest capital (gains) losses  (18.5)  0.9  (11.4) 
Income tax effect  137.7  238.3  129.0 
   Net realized capital losses, as adjusted  $ (254.7)  $ (453.4)  $ (245.4) 

(2)  In 2009, other after-tax adjustments included the negative effect of losses associated with our terminated commercial 
  mortgage securities issuance operation that has been exited but does not qualify for discontinued operations accounting 
  treatment under U.S. GAAP. 
 
  In 2008, other after-tax adjustments included (1) the negative effect of losses associated with our terminated 
  commercial mortgage securities issuance operation that has been exited but does not qualify for discontinued 
  operations accounting treatment under U.S. GAAP ($28.0 million) and (2) the positive effect of a change in an 
  estimated loss related to a prior year legal contingency ($7.6 million). 
 
  In 2007, other after-tax adjustments included (1) the positive effect of: (a) a gain on sale of a real estate property that 
  qualifies for discontinued operations treatment ($20.0 million) and (b) gains associated with our terminated commercial 
  mortgage securities issuance operation that has been exited but does not qualify for discontinued operation accounting 
  treatment under U.S. GAAP ($5.7 million) and (2) the negative effect of tax refinements related to prior years 
  ($11.1 million). 
 
  The following is a summary of income tax expense (benefit) allocated to our segments for purposes of determining 
operating earnings. Segment income taxes are reconciled to income taxes reported on our consolidated statements of operations. 

  For the year ended December 31, 
         2009         2008     2007 
  (in millions)
Income tax expense (benefit) by segment:       
U.S. Asset Accumulation  $ 127.2  $ 116.3  $ 137.7 
Global Asset Management  18.6  46.4  52.9 
Life and Health Insurance  120.1  133.8  107.6 
Corporate  (3.1)  (2.7)  20.3 
Total segment income taxes from operating earnings  262.8  293.8  318.5 
 Tax benefit related to net realized capital losses, as adjusted  (137.7)  (238.3)  (129.0) 
   Tax expense (benefit) related to other after-tax adjustments  (0.3)  (11.2)  11.8 
   Income tax benefit from discontinued real estate             —             —  (0.1) 
Total income tax expense per consolidated statements of operations  $ 124.8  $ 44.3  $ 201.2 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

18. Segment Information — (continued) 

The following table summarizes operating revenues for our products and services:     
  For the year ended December 31, 
  2009  2008  2007 
  (in millions)
U.S. Asset Accumulation:       
   Full-service accumulation  $ 1,280.7  $ 1,397.3  $ 1,591.4 
   Individual annuities  945.6  1,017.1  799.8 
   Bank and trust services  83.9  74.4  66.8 
   Eliminations  (8.4)  (7.4)  (6.6) 
       Total Accumulation  2,301.8  2,481.4  2,451.4 
   Investment only  796.0  1,138.0  1,179.2 
   Full-service payout  575.9  711.9  986.5 
       Total Guaranteed  1,371.9  1,849.9  2,165.7 
   Total U.S. Asset Accumulation  3,673.7  4,331.3  4,617.1 
Global Asset Management (1)  392.8  545.8  529.0 
Life and Health Insurance:       
   Individual life insurance  1,357.7  1,393.4  1,370.1 
   Health insurance  1,618.0  1,770.2  2,001.7 
   Specialty benefits insurance  1,452.7  1,498.2  1,470.7 
   Eliminations  (1.6)  (1.8)  (2.1) 
       Total Life and Health Insurance  4,426.8  4,660.0  4,840.4 
Corporate  (97.3)  (115.5)  (65.1) 
Total operating revenues  $ 8,396.0  $ 9,421.6  $ 9,921.4 
Total operating revenues  $ 8,396.0  $ 9,421.6  $ 9,921.4 
     Net realized capital losses (except periodic settlements and accruals on       
         non-hedge derivatives), including recognition of front-end fee revenues       
         and certain market value adjustments to fee revenues  (522.1)  (685.5)  (362.5) 
     Terminated commercial mortgage securities issuance operation  (0.5)  (32.1)  30.1 
     Operating revenues from discontinued real estate investments  —  —  (0.4) 
Total revenues per consolidated statements of operations  $ 7,873.4  $ 8,704.0  $ 9,588.6 

(1)  Reflects inter-segment revenues of $183.8 million, $230.0 million and $246.8 million in 2009, 2008 and 2007, 
  respectively. These revenues are eliminated within the Corporate segment. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

19. Stock-Based Compensation Plans 
 
                   As of December 31, 2009, our ultimate parent, PFG, sponsors the 2005 Stock Incentive Plan, the Employee Stock 
Purchase Plan, the Stock Incentive Plan and the Long-Term Performance Plan (“Stock-Based Compensation Plans”). As of 
May 17, 2005, no new grants will be made under the Stock Incentive Plan or the Long-Term Performance Plan. Under the terms 
of the 2005 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 
of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance 
units or other stock based awards. To date, PFG has not granted any incentive stock options, restricted stock or performance 
units. The following Stock-Based Compensation Plans information represents all share based compensation data related to us 
and our subsidiaries’ employees. 
 
                   For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was 
charged against income for stock-based awards granted under the Stock-Based Compensation Plans is as follows: 

  For the year ended 
  December 31,
  2009  2008  2007 
  (in millions)
Compensation cost  $ 39.5  $ 26.1 $ 53.0 
Related income tax benefit  12.4  8.3  17.6 
Capitalized as part of an asset  3.7  4.7  4.0 

Nonqualified Stock Options 
 
                   Nonqualified stock options were granted to certain employees under the 2005 Stock Incentive Plan and the Stock 
Incentive Plan. Options outstanding under the 2005 Stock Incentive Plan and the Stock Incentive Plan were granted at an 
exercise price equal to the fair market value of PFG’s common stock on the date of grant, and expire ten years after the grant 
date. These options have graded or cliff vesting over a three-year period, except in the case of approved retirement. 
 
                   The total intrinsic value of stock options exercised was zero, $3.4 million and $35.5 million during 2009, 2008 and 
2007, respectively. 
 
                   The weighted-average remaining contractual lives for stock options exercisable is approximately 5 years as of 
December 31, 2009. 
 
                   The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary 
of the assumptions used in this model for the stock options granted during the period: 

  For the year ended 
  December 31, 
Options   2009  2008  2007 
Expected volatility  55.0%  25.4%  23.6% 
Expected term (in years)  6  6  6 
Risk-free interest rate  2.1%  3.1%  4.6% 
Dividend yield  4.07%  1.51%  1.28% 
Weighted average estimated fair value  $ 4.07   $15.41  $17.98 

                   We determine expected volatility based on, among other factors, historical volatility using daily price observations. The 
expected term represents the period of time that options granted are expected to be outstanding. We previously determined 
expected term based on the simplified method as described by the SEC. Beginning with stock options granted in 2008, we 
determine expected term using historical exercise and employee termination data as we believe we now have sufficient data to 
provide a reasonable basis on which to estimate expected term. The risk-free rate for periods within the expected life of the 
option is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. The dividend yield is based on historical 
dividend distributions compared to the closing price of PFG common shares on the grant date. 
 
                   As of December 31, 2009, there was $4.7 million of total unrecognized compensation costs related to nonvested stock 
options. The cost is expected to be recognized over a weighted-average service period of approximately 1.5 years. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

19. Stock-Based Compensation Plans — (continued) 
Performance Share Awards 

                   Performance share awards were granted to certain employees under the 2005 Stock Incentive Plan. The performance 
share awards are treated as an equity award and are paid in shares. Whether the performance shares are earned depends upon the 
participant's continued employment through the performance period (except in the case of an approved retirement) and PFG’s 
performance against three-year goals set at the beginning of the performance period. A return on equity objective and a PFG 
earnings per share objective must be achieved for any of the performance shares to be earned. If the performance requirements 
are not met, the performance shares will be forfeited, no compensation cost is recognized and any previously recognized 
compensation cost is reversed. There is no maximum contractual term on these awards. 
 
                   The fair value of performance share awards is determined based on the closing stock price of PFG common shares on 
the grant date. The weighted-average grant-date fair value of performance share awards granted during 2009, 2008 and 2007 
were $11.64, $56.92 and $62.73, respectively. 
 
                   As of December 31, 2009, there was $1.8 million of total unrecognized compensation cost related to nonvested 
performance share awards granted. The cost is expected to be recognized over a weighted-average service period of 
approximately 2.0 years. 
 
                   The intrinsic value for performance share awards vested or paid out during 2009 were $6.0 million. Because no 
performance share awards vested or were paid out during 2008 and 2007, the intrinsic value for performance share award 
payouts were $0.0 million in both 2008 and 2007. 
 
Restricted Stock Units 
 
                   Restricted stock units were granted under the 2005 Stock Incentive Plan and Stock Incentive Plan. Restricted stock 
units are treated as an equity award. There is no maximum contractual term on these awards. 
 
                   Restricted stock units were issued to certain employees and agents pursuant to the 2005 Stock Incentive Plan and Stock 
Incentive Plan. Under these plans, awards have graded or cliff vesting over a three-year service period. When service for PFG 
ceases (except in the case of an approved retirement), all vesting stops and unvested units are forfeited. 
 
                   The fair value of restricted stock units is determined based on the closing stock price of our common shares on the 
grant date. The weighted-average grant-date fair value of restricted stock units granted during 2009, 2008 and 2007 was $11.70, 
$57.96 and $61.28, respectively. 
 
                   As of December 31, 2009, there was $18.3 million of total unrecognized compensation cost related to nonvested 
restricted stock unit awards granted under these plans. The cost is expected to be recognized over a weighted-average period of 
approximately 1.6 years. 
 
                   The total intrinsic value of restricted stock units vested was $3.2 million, $23.8 million and $21.7 million during 2009, 
2008 and 2007, respectively. 
 
Employee Stock Purchase Plan 
 
                   Under our Employee Stock Purchase Plan, participating employees had the opportunity to purchase shares of PFG 
common stock on a quarterly basis through 2008. Beginning in 2009, participating employees have the opportunity to purchase 
shares of PFG common stock on a semi-annual basis. Employees may purchase up to $25,000 worth of PFG common stock each 
year. Employees may purchase shares of PFG’s common stock at a price equal to 85% of the shares' fair market value as of the 
beginning or end of the purchase period, whichever is lower. 
 
                   We recognize compensation expense for the fair value of the discount granted to employees participating in the 
employee stock purchase plan in the period of grant. Shares of the Employee Stock Purchase Plan are treated as an equity award. 
The weighted-average fair value of the discount on the stock purchased was $4.98, $6.54 and $10.47 during 2009, 2008 and 
2007, respectively. The total intrinsic value of the Employee Stock Purchase Plan shares settled was $5.2 million, $4.8 million 
and $5.9 million during 2009, 2008 and 2007, respectively. 


Principal Life Insurance Company
Notes to Consolidated Financial Statements — (continued) 

19. Stock-Based Compensation Plans — (continued) 
Long-Term Performance Plan 

                   PFG also maintains the Long-Term Performance Plan, which provides the opportunity for eligible executives to receive 
additional awards if specified minimum corporate performance objectives are achieved over a three-year period. This plan 
utilizes stock as an option for payment and is treated as a liability award during vesting and a liability award or equity award 
subsequent to vesting, based on the participant payment election. Effective with PFG stockholder approval of the 2005 Stock 
Incentive Plan, no further grants will be made under the Long-Term Performance Plan, and any future stock awards paid under 
the Long-Term Performance Plan will be issued under the 2005 Stock Incentive Plan. As of December 31, 2005, all awards 
under this plan were fully vested and no awards were granted under this plan in 2009, 2008 and 2007. There is no maximum 
contractual term on these awards. 
 
                   The fair value of Long-Term Performance Plan liability units is determined as of each reporting period based on the 
Black-Scholes option pricing model that uses the assumptions noted in the following table: 

Long-Term Performance Plan       For the year ended December 31, 
     2009  2008  2007 
Expected volatility  116.0%  104.1%  25.0% 
Expected term (in years)  1  1  2 
Risk-free interest rate  0.6%  0.5%  3.2% 
Dividend yield  —%  —%  —% 

                   The amount of cash used to settle Long-Term Performance Plan units granted was $2.1 million, $2.6 million and $2.9 
million for 2009, 2008 and 2007, respectively. The total intrinsic value of Long-Term Performance Plan units settled was 
$2.4 million, $4.2 million and $3.0 million during 2009, 2008 and 2007, respectively. 

20. Quarterly Results of Operations (Unaudited)         
 
The following is a summary of unaudited quarterly results of operations for 2009 and 2008:     
 
  For the three months ended
  December 31  September 30 (1)  June 30  March 31 
  (in millions)
2009         
   Total revenues  $ 1,949.8  $ 2,009.0  $ 1,881.5  $ 2,033.1 
   Total expenses  1,808.1  1,782.9  1,721.0  1,911.2 
   Income from continuing operations, net of related income taxes  119.5  174.5  122.4  109.0 
   Net income attributable to Principal Life Insurance Company  114.8  163.2  117.0  107.4 
2008         
   Total revenues  $ 2,072.7  $ 2,139.4  $ 2,313.3  $ 2,178.6 
   Total expenses  2,106.1  2,046.1  2,082.3  2,012.5 
   Income from continuing operations, net of related income taxes  9.9  84.2  181.4  137.2 
   Net income attributable to Principal Life Insurance Company  13.3  72.9  175.2  141.7 

(1) During the third quarter of 2009, we discovered a prior period error related to DPAC amortization of certain contracts in our 
       full service accumulation business. We evaluated the materiality of the error from qualitative and quantitative perspectives 
       and concluded it was not material to any prior periods. The correction of the error in the third quarter of 2009 could be 
       considered material to the results of operations for the three months ended September 30, 2009, but is not material to the 
       results of operations for the nine months ended September 30, 2009. Accordingly, we made an adjustment in the third 
       quarter of 2009 that resulted in a decrease in DPAC amortization expense. On an after-tax basis, the adjustment for prior 
       periods resulted in an $18.9 million increase in net income for the three months ended September 30, 2009.