Ladies and gentlemen, thank you for standing by and welcome to the Prudential fourth quarter 2009 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given to you at that time. (Operator Instructions) As a reminder today's conference call is being recorded. I would now like to turn the conference over to Mr. Eric Durant. Please go ahead.

Cynthia, thank you very much and good morning to all of you. Thank you for joining our call. In order to help you to understand Prudential Financial, we will make some forward-looking statements in the following presentation. It is possible that actual results may differ materially from the predictions we make today. Additional information regarding factors that could cause such a difference appears in the section titled forward-looking statements and non-GAAP measures of our earnings press release for the fourth quarter of 2009 which can be found on our website at www.investor.prudential.com. In addition, in managing our businesses we use a non-GAAP measure we call adjusted operating income to measure the performance of our financial services businesses. Adjusted operating income excludes net investment gains and losses as adjusted and related charges and adjustments as well as results from divested businesses. Adjusted operating income also excludes reported changes in assets values that are expected to ultimately accrue to contract holders and recorded changes in contract holder over liabilities resulting from changes in related asset values. The comparable GAAP presentation and the reconciliation between the two for the fourth quarter are set out in our earnings press release on our website. Additional historical information relating to the company's financial performance is also located on our website. Okay. We will begin today with comments from John Strangfeld and then Rich Carbone, our Chief Financial Officer and Mark Grier, who will walk you through the fourth-quarter results. After that Bernard Winograd, Ed Baird and Peter Sayre will join John, Rich and Mark for the Q&A. John?

Thank you, Eric and good morning everyone. Thank you for joining us. Now that we have closed the books on 2009, I will kick things off with some high-level comments regarding the year as a whole. All in all, we feel we have succeeded in meeting the challenges of a very difficult environment. First, earnings. Our earnings for 2009 more than doubled from 2008 based on after-tax adjusted operating income of the financial services businesses. Return on equity recovered to 11.3%. Excluding from earnings the items, we consider discrete or market driven, the full-year result would equate to just under a 10% ROE. While we expect to do better over time, this is a step in the right direction. Second, capital. Net income for the year amounted to 3.4 billion including the 1.4 billion after-tax gain on sale of our investment in Wachovia Securities. Even without that gain, net income would have been a healthy $2 billion. We sold 1.4 billion in common shares in June and our flagship life insurance company issued exchangeable surplus notes to raise an additional 500 million. Total debt for the financial services businesses declined by $6 billion during the year. Book value increased by 5.5 billion. Book value per share increased over 15% from 46.91 to 54.18 in the last 12 months. These measures exclude the impact of unrealized gains and losses on investments and pension and post-retirement benefits. As you know, we did not participate in TARP. All in all, a very strong capital story. And then finally, business momentum. We have emerged from this difficult period in excellent shape as strong sales or flows virtually across the board will attest. For the year individual annuities had record gross sales. Full-service retirement had record gross deposits and sales and international insurance recorded its…

Thanks, John and good morning, everyone. I have got a little cold so I may be interrupted with sips of tea. As you have seen from yesterday's release, we reported common stock earnings per share of $1.07 for the fourth quarter based on adjusted operating income for the financial services business. This compares to a loss of $2.04 for the year-ago quarter. Let me start with some high-level comments on the current quarter. We are benefiting from solid performance in our major businesses as well as improvements in financial markets. Strong sales and net flows virtually across the board have also helped drive growth in our account values. Mark will talk more about this later on. On the other hand, commercial real estate market conditions are continuing to have a negative impact on the results of our asset management business. In addition, the cost of holding excess liquidity, which is showing up as a negative spread mostly in corporate and other and we will talk about that later, was a drag on results from the current quarter. The list of significant market-driven or discrete items affecting current quarter results is very short, probably the shortest in the last two years and all within the annuity business. And I will go through these items now. Mark-to-market of hedges and embedded derivatives, including breakage on our living benefit hedging, the market-based adjustment for our own non-performance risk and the hedge we put on to protect capital from adverse winds in the equity markets had a negative impact of about $0.17 per share. We had a benefit of about $0.07 per share from the release of a portion of our reserves for guaranteed minimum death and income benefits. And we had a benefit of about $0.05 per share from a positive unlocking of…

Excuse me, thank you, Rich. Good morning, good afternoon, good evening, good night, whatever time it is where you are. Thanks for joining us. Financial market conditions improved in the fourth quarter with credit spreads continuing to tighten for many asset classes. As Rich mentioned, our general account credit losses and impairments were at their lowest quarterly level of the past two years. While we may not have seen the last of volatility, we have a very high quality, diversified investment portfolio and remain comfortable with our risk position. I will start with our fixed maturity portfolio. Our general account fixed maturity portfolio is in a net unrealized gain position, roughly $1 billion at year-end. This compares to net unrealized losses of $6.6 billion a year earlier. Gross unrealized losses on fixed maturities in our general account stood at 4.4 billion at year end. This represents a recovery of about $7 billion from $11.3 billion a year earlier. Roughly $1.3 billion of total gross unrealized losses at year-end relate to subprime holdings. This compares to $1.5 billion at the end of the third quarter and $1.8 billion a year earlier. Total subprime holdings were roughly $4.3 billion at year-end based on amortized costs. This represents a decrease of about $300 million from the third quarter, reflecting over $200 million of paydowns during the quarter and the $70 million of impairments that Rich mentioned. The insurance regulators have changed their ratings approach for non-agency residential mortgage-backed securities effective with year-end 2009 reporting. Under the new approach quality classifications and statutory capital charges are based on evaluation by an independent third party of loss exposure on a security-by-security basis and consider the insurance companies carrying value as well as the risk of loss given the securities' cash flow priorities. Since these NAIC…

Thank you. (Operator Instructions) And our first question will come from the line of Andrew Kligerman from UBS. Please go ahead. Andrew Kligerman – UBS: Hey. Good morning. First question revolves around acquisitions. Can you remind me of your priority list of what areas you would like to acquire in if you do? And then give a sense of the environment – is there a lot of opportunity to do something right now? And then thirdly, debt to capital of 21.6%, can you give me a sense of what your excess debt capacity is given that debt-to-capital-ratio?

Okay. Do you want to take the third one first, Rich? Andrew, we will start with Rich on the third question and then we will come back to that one and two. Andrew Kligerman – UBS: Sure.

A 25% targeted debt-to-capital-ratio. Our debt capacity which includes capital debt and hybrid is $5.3 billion. Andrew Kligerman – UBS: Great.

And as far as the environment, let me take that first in a broader context and then more specific to M&A, because I think it's an important part of our story and understanding how we see ourselves right now. And clearly, in times like these there is a lot of upside associated with a strong brand and a strong capital position. It clearly expands existing opportunities and it also creates new opportunities. And converting these opportunities into a reality is the charge of our business leaders and as you can see from the fundamentals they are definitely succeeding at this. We feel very good about the inside opportunities and we feel intrigued by the outside opportunities. The inside are the type of things you are seeing in market share gains, which in some cases have to do with product and in other cases have to do with distribution and in other cases have to do with both. And when you look at some of the progress we are making in some of these areas organically, they are in some sense in terms of magnitude the market share gains that you would normally associate with M&A, without the operating risks that you also have that comes along with M&A. So that's the organic piece. As for M&A, Andrew, to come more specifically to this. First, there are obviously a number of well-publicized franchises in flux with timelines that are uncertain. Whether we buy them and whether we simply compete with them is going to be a function of a wide variety of considerations and market dynamics. It is no doubt an interesting time in terms of supply and demand and there are a limited number of counterparties that have the scale, the scope, the management and financial capacity that we do…

I think I would be reluctant Andrew, to be very specific about that. But I think you can imagine that in terms of the types of things we do, the types of things we consider and the manner in which we approach them would be consistent with what you have seen us do in the past. Andrew Kligerman – UBS: Got it. And then just lastly, I think Mark was talking about some incremental universal life and term insurance pricing increases. Could you give us a ballpark of the magnitude? Just a little color on what is driving that and what we can expect down the road in terms of pricing.

Hi. Andrew, it's a Bernard Winograd. We are looking at margins in this business carefully. As I think you fully appreciate, the cost of financing of reserves is an incremental cost to the business that the environment has created. We have done well over the years in terms of profitability of our life franchise in the U.S. by being very disciplined about the ROE targets that we set and the pricing that we ask for in order to get to those targets and letting the market share sort of fall out as a result. And so what we are doing here in the fourth quarter or excuse me, what we did in the fourth quarter was move back to where we need it to be in our view in our to compensate for the increases in costs. With any increase of this kind it's sort of a complex spreadsheet but call it in the 5% to 10% range depending on the sell and we feel like at that point we have made up or compensated for what we need to in terms of cost. We will have to see whether the market will sustain it but our expectation is that others in the industry may have similar views. And judging by reactions since some have opposite views. So we will just have to let the market share fall out where it this. Andrew Kligerman – UBS: And Bernard this puts you at what ROE level by getting the 5% to 10% range across these products?

No. We don't generally discuss what the ROE was on any given product but you can certainly see that the ROEs of the segment have been somewhat extraordinary actually compared to the industry as a whole. Andrew Kligerman – UBS: Okay. Thanks a lot.

Thank you. Our next question comes from the line of Suneet Kamath from Sanford Bernstein. Please go ahead. Suneet Kamath – Sanford Bernstein: Thank you and good morning. Just for Rich, wanted to get just very specific on balance sheet capital capacity and the redeployment of capital capacities. So just very simplistically I think you said 3.5 billion to 4 billion on balance sheet capital capacity. I think you said historically you have maintained 2 billion to 3 billion of capital capacity on the balance sheet. So subtracting one from the other we are talking about $1 billion to $2 billion of on-balance sheet capital capacity that you could redeploy today. Is that right?

That is correct. Suneet Kamath – Sanford Bernstein: Perfect. And then two other questions. First, again for Rich in terms of the capital. In the past pre-crisis, you have talked about I think 60% of your operating earnings as something that we could think about as free cash flow. Given that now we are post-crisis that the significant growth that you are seeing in the business is that 60% still a number that we should think about or is there an update to that?

That is probably a little high right now. The growth particularly in the annuities business is attracting but holding on to their cash in order to finance their DAC. So I think it's a good story that the business organic growth is reducing that 60, 40 payout ratio, if you will, from the subs. We will refine that during the year and get a clearer picture on that.

And just one comment on that, remember that that is an over time number. When there is a big divergence between operating earnings and net income there is a difference there because it's net income that drives the capital accounts. Suneet Kamath – Sanford Bernstein: Understood. And then the very last related question. Roughly 3 billion of net flows in variable annuities in the quarter was much bigger than we have seen from a lot of your competitors. The question is and I think this relates to some comments that John made at investor day about balancing the growth in VAs with the growth in the rest of the franchise, would you think that a $3 billion per quarter run rate is something that you would be comfortable with for 2010 or at some point do you start to throttle that back? Thanks.

Suneet. This is Bernard. Let me take a shot at that. I think what we feel at the moment is that we have an unusual opportunity in the marketplace. Because of our financial strength and because of the unique design of our products and the fact that it's relatively less risky than a lot of competitors products and risk is a big cost in this activity, we are able to make pretty extraordinary sales and market share gains at the moment and be very comfortable with what we are selling. We have also got the benefit here of on an ongoing basis that a lot of the sales are coming from the creation of new relationships and distributors who did not sell our products before. So there is a kind of run rate effect that is building here in the marketplace with every passing quarter. The overall question of what kind of limit we would put on our position in this market is a little bit of a moving target because it depends upon, not just the growth here but the growth elsewhere. But the risk-controlled nature of what we’re adding to the balance sheet here makes us much more comfortable than we would have been if we were adding the kind of products that we used to sell and that others in the industry are still selling.

Yeah. Suneet. It’s Mark. Let me just add two things. One is that we are very comfortable with the economics of what we are doing in the variable annuity business. We do understand that there are sensitivities to the volatility and the complexity and the lack of transparency and linear relationships in terms of the accounting results. And that is a source of frustration because the accounting is, I believe, quite a lot more volatile than the economics. But we are sensitive to that issue and we continue to focus on how that fits in to the bigger picture of Prudential overall. But again in terms of the fundamentals, the economics and cash outcomes we are very comfortable with where we are here and finally, we are not pricing to aggressively gain share. We are pricing to meet targets that we think are appropriate for the business. We are not compromising. We are not buying share at the expense of future profitability. And I think our approach has been healthy. We have been the beneficiary of some turmoil in the markets combined with the value of our brand and the quality of our product but not necessarily reflecting aggressive pricing to gain share. So that is another overlay on our comfort level that puts this in context. We do have significant share gains but they don't result from an attempt to undercut everybody in terms of pricing. Suneet Kamath – Sanford Bernstein: Okay. Thank you very much.

Thank you. Our next question comes from the line of Nigel Dally from Morgan Stanley. Please go ahead. Nigel Dally – Morgan Stanley: Great. Thanks. Good morning. A couple of questions for Bernard on your commercial mortgage activities. Relatively sizable loss this quarter associated with the interim portfolio. Perhaps if you can provide us a little more detail as to what drove the loss. I guess the key issue I am trying to get to is did the actions this quarter effectively put to rest the risks surrounding those exposures or is there still the potential for similar meaningful losses now going forward? Also at your analyst day you were optimistic that we were seeing signs of stabilization in commercial real estate. I am assuming your views haven't changed but it's best if you can also provide an update as to your outlook for commercial real estate in 2010? Thanks.

Happy to do both those things Nigel. The interim loan portfolio, I think what just to revisit what I said back on investor day was in anticipation of what you now see in terms of these reserve activity. We have gotten to the point where we believe we have reserves that are probably a good approximation of what the ultimate losses will be on this portfolio. Which is not to say that there won't be more reserves, because there is a tendency for the, in the way the accounting for these things work for the reserves ultimately to overshoot the actual losses and then result in gains as things work them through over time. But we certainly don't think that the run rate, if you will, of reserves that we took in the fourth quarter are in any way indicative of what the future experience will be because we have gotten to that point. With regard to the stabilization of the market, just to be clear, what I was referring to which I think I would affirm is that we believe we have begun to see a turn in the valuation of commercial real estate which has begun to trend up beginning late in the fourth quarter and continuing. The fundamentals of real estate are not necessarily yet following the valuation. We do still have questions with regard to what the ultimate vacancy rate will be and so forth. But because the expectations are that we are close to that bottom values are beginning and because there is a lot of money looking to take advantage of the bottom, we are beginning to see a stabilization in values. Our conviction in that regard has gotten, if anything, stronger since investor day. Nigel Dally – Morgan Stanley: That is great. Thank you.

Thank you and our next question come will come from the line of Tom Gallagher with Credit Suisse. Please go ahead. Tom Gallagher – Credit Suisse:

Okay. Tom, this is John. I will take the first part of that. I think you characterized it well that our primary interest would be on the international side would be in traditional insurance. But bear in mind what we are seeing happen with traditional insurance is it's increasingly migrating to have a retirement component to it. We are seeing this very evident in Japan and we think there will be more signs of this over time. So that distinction between traditional protection and traditional retirement is beginning to morph in some sense like our U.S. business mix did over time. Domestic retirement as well I think you characterized. As for VA business the probability of us doing a pure-play acquisition in the VA space is highly unlikely because most other books don't look like the product design that we have that we feel so comfortable with. Having said that, you can't imagine circumstances were as part of a broader opportunity there may be a component of it that has a VA element to it. And we would simply have to evaluate that at that time.

On the capital hedge the short answer is yes. That is an outright short and, all things being equal it will go down when the market goes up and vice versa. However, we have also said in the past that we are evaluating alternative approaches to hedging capital and we are always looking at market conditions and other ways to accomplish our objectives. So I won't necessarily commit to having that in place forever but the answer right now is yes. It's a direct outright short. Tom Gallagher – Credit Suisse: Okay. Thanks.

Thank you. We’ll go to the line of Eric Berg with Barclays Capital. Please go ahead. Eric Berg – Barclays Capital: Thanks very much. John, just a quick follow-up on the M&A question. Recently one of the leading consulting actuaries in the business in the M&A area said that he was more busy last year than ever in terms of receiving requests to do appraisals for properties for sale. But even though he got paid a lot because he was more busy than ever, he didn't complete a single transaction because of the big gap in pricing expectations between buyer and seller. Now that markets have improved and the distress on sellers is so much less than it had been is it reasonable to think that the environment to actually do transactions is better than it was at this time last year?

Eric. There is some very interesting different dynamics at work here. If you had asked us 15 months ago would there be opportunities arising from all of the turmoil in the marketplace, we would have said absolutely yes. And at that time our expectation would have been that over the ensuing 15 months or so we would have seen a lot more M&A than we have seen. So that was surprising to us not to see more take place. But what was equally surprising to us was just if you want to call it the flight to quality. And in our case the positioning to take advantage of it so that the organic side of this was far more pronounced than we would have thought. It is also a product of this turmoil. Now, as we get into a more stabilized environment you got competing forces. In some cases that means there is less need. In other cases they have a commitment to divest. On the other hand, the availability of financing and capital is greater than it was at that time so there is a variety of forces at work here. I think it partly depends upon the time horizon you want to use. There is so many things that may eventually come on the market were being sold by parties that never actually anticipated the sale so they were necessarily prepared for it. So I think that the gestation period of this in a number of cases has taken longer and I think there was a period when there was a gap between perception of value by seller and buyer and the complexity of financing. So some of those things are normalizing and some of those forces will remain at work. So it's a little hard to judge but think of it also though as having an interplay as we have experienced between the M&A and the organic. There is a stronger balance of the two than we would have thought going into this. Eric Berg – Barclays Capital: And would you say last and final question. Would you say that the pickup in market share that you are getting, obviously incredibly strong in the United States. Do you think that you have benefited from a flight to quality in Japan? Is the addition to your business, is the perception of U.S. companies in general and Pru in particular as strong relative to the peers there as it is here?

I would like to get Ed Baird, Eric, to respond to that.

Yeah. Hi. Eric. The results obviously are very strong across the board in our biggest operations both in Japan and Korea. While you can never know for certain what the drivers are, it would strongly suggest that there is a growing recognition by the consumer to be able to differentiate between those foreign companies that are distressed, some to the point of actually withdrawing from the marketplace in Japan and those that are really committed and surviving well. So I think that is one of the reasons we suffered, along with some of the other foreign companies with relatively soft performance in the fourth quarter of '08. Whereas the fourth quarter of this year, as you can see, was a very strong sales quarter for us. So I do think that differentiation you are inquiring about is taking place in the market.

I also think Eric, the other form of differentiation is not necessarily at the end consumer. It's also at the distributor or their intermediary if there is one. Meaning that they have it and we see this in the U.S. as well where they have a propensity, they may have it all on the shelf but they may have a greater propensity to be comfortable with our product rather than others. And there is less of a complicated story to tell. Eric Berg – Barclays Capital: Thank you.

Thank you. And our next question comes from the line of John Nadel from Sterne, Agee. Please go ahead. John Nadel – Sterne, Agee: Hey, Good morning. Most of mine have been asked and answered but just a question for you. Mortality in both the U.S. and Japan appeared to be actually very good this quarter. I am wondering if you can just give us a sense for relative to longer-term expectations for mortality under your pricing assumptions how much would you estimate mortality contributed above those longer-term expectations in the quarter? Just trying to think about where we would go if mortality was just in line.

John, it's Bernard Winograd. In the U.S. the answer to that question would be $32 million. John Nadel – Sterne, Agee: And in Japan, do you have a similar?

John Nadel – Sterne, Agee: Perfect. Thank you.

Thank you. Our next question comes from the line of Ed Spehar from Bank of America/Merrill Lynch. Please go ahead. Ed Spehar – Bank of America/Merrill Lynch: Thank you. I wanted to ask some capital questions. Rich, just to make sure I understand at the investor day I think you said capital capacity of 4 billion. Is that the comparable number to the 3.5 to 4 you just gave us?

No. On Investor Day I said net on balance sheet capital capacity was 2 billion. And then at the bottom of the slide, I said but if we settle the Wachovia foot at the full proceeds we would add another 2 billion. Ed Spehar – Bank of America/Merrill Lynch: Right. So that's 4.

That's 4. So the 3.5 to 4, I am talking about today of course, includes the recognition realization of the Wachovia proceeds and that compares to the 2 billion of Investor Day without the Wachovia proceeds. Ed Spehar – Bank of America/Merrill Lynch: Right. Okay. So okay. I got it. Is that in terms of the holding company? This 1.5 billion that you said on the call today, should we subtract off the 1 billion for 1.5 times coverage to say that sort of the excess is 500 million?

No. You are mixing cash and capital. The 1.5 billion at the holding company is cash. Now some of that -- it's hard to separate it at times from capital. But just think about that 1.5 billion as cash. $500 million is extra cash held at the holding company and $1 billion is the cushion that we will use to pay our debt service costs throughout 2010. You have to keep in mind that's a bit of an evergreen number because we are expecting dividends from the subs to replace that during the year, which is why technically we don't count that against our capital. Ed Spehar – Bank of America/Merrill Lynch: Okay. I guess the real question is, if you do some math here it looks to me like with a mid 500 RBC ratio that if we assumed 400 was the right level, which is 50 points higher than what you used to assume I think, that would say that there is about 3.5 to 4 billion, I am sorry, about 3 to 3.5 billion I think at PICA above a 400 RBC? That is pretty close isn't it?

Yeah. That's the majority of the 3.5 to 4 billion is represented by the difference between the 400 and the mid 550 RBC in PICA. Ed Spehar – Bank of America/Merrill Lynch: Okay. So you have got 3 to 3.5 at PICA. It seems like you probably 500 million at the holding company isn't probably that far off.

No. Ed Spehar – Bank of America/Merrill Lynch: I guess the question is this, why -- a 400 RBC is four times regulatory minimum capital. I would think that most of us believe that that is factoring in a cushion. When you refer to this 2 to 3 billion that you have historically held, are you telling us that the cushion you need to have for the real cushion is essentially it's a 500% RBC ratio? I mean it just seems like, I don't quite understand why 3.5 to 4 billion of capital capacity isn't 3.5 to 4 billion of capital capacity.

It is a 3.5 to 4 billion of capital capacity, but its capacity needed to sustain a 400 RBC. I thought I said this. Its capital needed to sustain a 400 RBC in a stress scenario so that is capital for the two purposes, right? If there is another stress scenario and we want to keep PICA at 400 we have got to take some of it out and dump it down. I think it's as simple as that. If we let it -- if we allow PICA to drop lower then that is -- but that's a different construct to calculate capital capacity. So the 3.5 to 4, I am repeating myself, is there for dislocations in the marketplace, fund organic growth, et cetera. Ed Spehar – Bank of America/Merrill Lynch: Okay. Thanks.

Thank you. And we have one final question will be from the line of Colin Devine with Citigroup. Please, go ahead. Colin Devine – Citigroup: I have two questions. I guess first for Bernard, I know we have watched the yield on the fixed income investments come steadily down. And how much of a drag on the earnings is this starting to be? And then secondly for Rich, when I hear the questions about capital and how much you have raised it just seems there is a pattern now that Prudential is almost in the market every quarter raising capital. Now, if we look back to what the JV ultimately added to PICA, I guess that is over 5 billion you had to raise the surplus note. Why do you need all of this capital? You are issuing debt here in January. I would have thought at this point that you had more than enough.

Colin, that is a fair question but we are mixing up capital debt refinancing with operating debt refinancing. All of the refinancings that were done in January fulfilled virtually all of our operating debt needs, refinancing needs, pardon me, for 2010. So none of the debt issuances that took place in January were capital debt, it was all replacement of operating debt that matured or pardon me or that will mature throughout 2010. Colin Devine – Citigroup: Do you think you are done at this point for the year?

Yeah. We are pretty much done. Colin Devine – Citigroup: Okay. And net-net how much since the end of the fourth quarter of '08 has the capital position of PICA been strengthened? And then on to Bernard for investments and I had a follow-up question VA.

Okay. So let's go through it. We know we had the gain on Wachovia that strengthen the capital position in PICA. We know we issued $500 million in notes to Nippon Life. Colin Devine – Citigroup: Rich, just to clarify, it would be the whole contribution of the JV wouldn't it? Not just the gain?

No. Let's go back. No, let’s go back. We contributed the book value in 2008. Colin Devine – Citigroup: Well, that's what I asked from fourth quarter of '08. I want to pick up the end of '08, if you like December 31, '08, to December 31, '09, how much you have strengthened PICA on that 12-month period.

All right, Colin. I read that to be what we put in 2009. Colin Devine – Citigroup: Yeah.

So you want to start in 2008? Colin Devine – Citigroup: Well, we might as well pick up the JV.

We have contributed the book value in 2008. We picked up the gain in 2009. So in total that's going to be $3.7 billion after tax. We did the $500 million in Nippon and we added about and now you are testing my memory. In the first quarter of 2009, we added or converted about $500 million of retail notes brought the cash up to the holding company and then contributed that down to PICA. And that was about it. Colin Devine – Citigroup: Okay.

The last one maybe Neil or Eric and get back to you on to verify that, but that's it. Colin Devine – Citigroup: Okay.

The lion's share was the Wachovia gain, the Wachovia original book value and the $500 million Nippon surplus note. Colin Devine – Citigroup: Thank you.

Thank you. And with that, ladies and gentlemen, that does… Colin Devine – Citigroup: Wait a minute. Question on investment yield.

(Operator Instructions) And please go ahead. Colin Devine – Citigroup: Okay. And then Bernard also made a comment about the VA products that you used to sell. And I was wondering what's different since one of the ones you used to sell was the HD 5 and I assumed he was referring to that being -- not reaching its target profitability.

Colin, I think that it's a -- yes, absolutely. Let me clarify that. I think the point, I am making is with regard to the level of risk relative to any given market level. So certainly, even if you sell an auto rebalancing product, you are in market falls 40%, you are going to have some incremental capital and you are going to be disappointed in the behavior of that cohort. But the point from our perspective is that over a cycle which is an investment cycle, which is how you have to think about the pricing you are going to average in to what you sell. And the things that you sell at the bottom of the investment cycle are going to way outperform your expected results and the things you sell at the top of the investment cycle are going to underperform. The point about the HD product set is just that it narrows the variation along the way. It doesn't -- it's not a complete immunization from the kind of extreme market movements we have seen. Colin Devine – Citigroup: Okay. Perhaps we can follow-up on that one later with Eric just so I am clear on the differences between the 5 to the 7 back to the 6 and why the 5 is not a problem. And then just on the bond yields coming down, how maybe for you or for Rich, they continue to drop fairly significantly. How much of an earnings drag is this starting to be or is that really what you brought down the ROE guidance long-term at the investor meeting?

It's not why we brought down the ROE guidance. That reflects basically a whole bunch of market influences on some of the things like you were just talking about in annuities as well as the capital structure issues and excess or holding higher levels of liquidity. And there are a bunch of influences in that ROE picture. With respect to the level of interest rates, the impact on us is very gradual. We have maintained or in some cases even improved the spreads on our books where we have market sensitive liabilities, so we are not seeing much of a squeeze there. We do have the influence to use the insurance concept investing surplus and over time, as the yield on the portfolio goes down, we will see some impact from that. But the effect on us is very gradual and with respect to the core businesses we have held up extremely well. Colin Devine – Citigroup: Okay. So I shouldn't be that concerned about the 36 basis point year-over-year drop in fixed maturity yields in '09?

No. You don't see that moving through the elements of profitability that we have talked about. Colin Devine – Citigroup: Great. Okay. Thank you.

Thank you. And ladies and gentlemen, today's conference will be available or replay after 1.30 p.m. Eastern today until midnight February 18. You may access the AT&T teleconference replay system by dialing 800-475-6701 and entering the access code of 138440. International participants dial 320-365-3844. And those numbers once again 1-800-475-6701 or 320-365-3844 and enter the access code of 138440. That concludes your conference call for today. Thank you for your participation and for using AT&T executive teleconference service. You may now disconnect.