Ladies and gentlemen, thank you for standing by and welcome to the Second Quarter 2015 Earnings Teleconference. At this time, all lines are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will be given to you at that time. And as a reminder, today's conference call is being recorded. I would now like to turn the conference over to Mr. Mark Finkelstein. Please go ahead. Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Thank you, Cynthia. Good morning and thank you for joining our call. Representing Prudential on today's call are John Strangfeld, CEO; Mark Grier, Vice Chairman; Charlie Lowrey, Head of International Businesses; Steve Pelletier, Head of Domestic Businesses; Rob Falzon, Chief Financial Officer ; and Rob Axel, Controller and Principal Accounting Officer. We will start with prepared comments by John, Mark, and Rob and then we will answer your questions. Today's presentation may include forward-looking statements. It is possible that actual results may differ materially from the predictions we make today. In addition, this presentation may include references to non-GAAP measures. For a reconciliation of such measures to the comparable GAAP measures and a discussion of factors that could cause actual results to differ materially from those in the forward-looking statements, please see the section titled Forward-Looking Statements and Non-GAAP Measure of our earnings press release which can be found on our website at www.investor.prudential.com. John, I'll hand it over to you. John Robert Strangfeld - Chairman & Chief Executive Officer: Thank you, Mark. Good morning, everyone, and thank you for joining us. Prudential reported strong second quarter results driven by solid fundamentals across our businesses. We achieved operating earnings per share of $2.62 after adjusting for market-driven and discrete items, representing a 4% increase over prior year earnings. This quarter's ROE…

Thanks, John, good morning, good afternoon, or good evening. Thank you for joining our earnings call this morning. I'll take you through our results and then I'll turn it over to Rob Falzon, who will cover our capital and liquidity picture. I'll start with an overview of our financial results for the quarter shown on slide two. On a reported basis, common stock earnings per share amounted to $2.91 for the second quarter based on after-tax adjusted operating income. This compares to EPS of $2.49 a year ago. After adjusting for market-driven and discrete items in both the current quarter and the year-ago quarter, EPS was up 4%, amounting to $2.62 compared to $2.51 a year ago. Looking across our businesses, here are some highlights of this comparison. I'll mention four key items. First, higher fees reflecting growth in average account values in our Annuities business and greater assets under management in our Asset Management business. Second, improved claims and reserve experience in our U.S. Insurance businesses. Third, a greater contribution from pension risk transfer case experience, which continued to be more favorable than our average expectations. And fourth, in International Insurance, continued growth on a constant currency basis in our Life Planner operations. These benefits were offset by three primary items. One, higher net expenses in several businesses. Two, a lower contribution from net investment results with returns on non-coupon investments below our average expectations in the current quarter. And three, less favorable currency exchange rates in International Insurance. I would also note that decreased corporate income tax rates in Japan drove a lower effective tax rate in the current quarter. On a GAAP basis, including amounts categorized as realized investment gains or losses and results from divested businesses, we reported net income of $1.4 billion for the current…

Thank you. And our first question will come from the line of Erik Bass with Citigroup. Your line is open.

Hi, thank you. I was hoping you could provide a little bit more detail around the drivers of the $500 million in improvement in excess capital, particularly the capital generated by the business. And maybe touch on any amounts from the settlements of the capital hedge that contributed to that. Robert F. Falzon - Chief Financial Officer & Executive Vice President: Erik, it's Rob. Happy to do so. As I said, the capital that we generated this quarter was primarily from business earnings and there was a modest benefit from interest rates. The math is relatively straightforward, if you think about the guidance that we've given before. If you look at our after-tax operating income, you net from that the buybacks and dividends that we provided during the course of the quarter, and the rule of thumb that we use for business growth that has the amount of capital that needs to be put back into our businesses to finance their growth, you come up with a number that's pretty close to the $0.5 billion that we generated. So it comes primarily from the earnings that are generated at the business level. The capital hedge – I presume in that case you're referring to the FX equity hedge, actually did not have a material impact in this quarter. If you recall in the first quarter, we accelerated some of the – locked in, I should say, some of the gains associated with that. And so that included most of what we otherwise would've realized during the course of this quarter.

Got it. Thank you. That's helpful. And given the volatility that we've seen in the excess capital over the past three quarters, can you just talk about how comfortable you are in redeploying this capital? And does the volatility at all limit kind of your deployment options in terms of, I guess, how you would think about using that capital? Robert F. Falzon - Chief Financial Officer & Executive Vice President: I think, Erik, the way I would respond to that is we had – I think the volatility was limited to a single quarter as opposed to volatility that you've seen on a consistent basis, first. Secondly, as we look at that capital capacity I think our inclination and philosophy toward redeployment has not changed. We look at holding a prudent amount of it to ensure that we retain and/or maintain a strong balance sheet and we otherwise look to redeploy that capital either to finance growth organically or inorganically and to keep a balanced distribution back to our shareholders as well.

Thanks. Just the final question. Given the recovery in the excess capital position and the uptick that we've seen in interest rates, have you given any consideration to either reducing or eliminating the rate under-hedge? Robert F. Falzon - Chief Financial Officer & Executive Vice President: We look at our interest – that particular under-hedge is looked at in the context of our overall interest sensitivity across the enterprise. At this point, we're comfortable with where we stand on that position. I think, as we've said before, we have a positive convexity toward interest rates, meaning that as rates rise we will benefit and we'll benefit more than we would suffer should rates decline. And we like that position at this point in the cycle.

Yeah, this is Mark. Let me just remind you that you need to take a broader view of that. That narrow product under-hedge does go the other way from some other things in our income statement. And particularly in my remarks I commented on nearly $800 million of negative mark-to-market on basically duration hedging derivatives. And so you've got to think more generally about what goes the other way and how that's netted off before you start thinking about specifically the under-hedge as a standalone either view on rates or influence on our overall balance sheet.

Got it. Thank you for the comments.

Thank you. Our next question comes from the line of Seth Weiss with Bank of America. Your line is open.

Hi, good morning and thank you. To follow up on the theme of capital, if we look at the parent company cash and short-term investment, $5.6 billion, I believe this is the highest it's been in about two and a half years. I understand excess capacity, you think about holistically in terms of HoldCo and the statutory entities, but given the higher parent company cash position, should we think of that as any type of short-term opportunity to deploy or are there near-term timing needs of cash that we should consider? Robert F. Falzon - Chief Financial Officer & Executive Vice President: Seth, I would point to the comment I made in my opening remarks about our leverage position, and specifically I would note that if you look forward to maturing operating debt that we've got during the course of this year, we've got about $2 billion worth of debt that matures in the second half of the year. We're sitting on a substantial amount, as you noted, cash at the holding company and we would expect to be able to pair those things off during the course of the year.

Okay. So is there no plan to roll those debts? Robert F. Falzon - Chief Financial Officer & Executive Vice President: We have a lot of liquidity sitting at the holding company, and we don't – we would not, based on our current position, think that we would want to add to that liquidity by effectively rolling over our existing debt rather than look at the opportunity to just repay that as it becomes due in its natural course.

Okay, great. Thanks. And if I could just follow up one in the Retirement segment. I think we've seen positive case experience in the pension closeouts for several quarters, or a couple years now. Perhaps you could just comment, maybe give a little bit more granularity on where that positive case experience is coming from and if that's something that – I know you're not guiding to anything sustainable there, you're being pretty specific about calling that out in both the releases and in earnings calls here, maybe just explain why that should normalize lower. Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Seth, this is Steve, I'll comment on that. I'm not going to attribute the positive case experience to any particular transactions or any particular part of the book. I will say that we call it out because we recognize that these are liabilities with longer average duration, about 9 years to 10 years on the funded side, as we spoke about, and about 8 years to 12 years on the longevity side. So we're not about to take the positive case experience and kind of bake it into our expectations, however, I will say that, as you pointed out, the consistent positive case experience does serve to bolster our already high confidence that we've priced this business appropriately and assessed the risks accurately.

Okay. Maybe just to follow up in terms of just the kind of risk characteristics of this. Is this something that will have quarterly volatility like a group or life that maybe we're a little bit more accustomed to, and that it's just been several quarters of good luck, or is there may be just a better trend here that we could think about? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Well, I wouldn't necessarily call it good luck. I'd call it, again, reflecting strong underwriting of the business. But, again, this would be something that we wouldn't expect to see the same type of number emerging from this every single quarter.

Okay, thank you.

Thank you. Our next question comes from the line of Tom Gallagher with Credit Suisse. Your line is open. Thomas George Gallagher - Credit Suisse Securities (USA) LLC (Broker): Thanks. The first question I had is, Rob, when you take the 60% ratio of free cash flow versus GAAP earnings that you all have put out there, and then you compare it to the results you've had for the last few quarters, I get something closer to 90%. And so my question is, and I don't know if that would be precisely the way you would calculate it, but I think directionally that's right. Where is that, we'll call it above average or above expectations capital generation, where is that coming from right now? Is that something going on within the Arizona VA captive? Is that broadly related to interest rates? Can you just expand upon how you're over-earning from a cash flow generation standpoint right now? Robert F. Falzon - Chief Financial Officer & Executive Vice President: Tom, without benefiting from exactly how you're doing your calculations, I'd note a couple of things that have positively benefited our cash flow ratio, the most significant of which would be the Closed Block transaction. So as a result of that restructuring that we've talked about before, there's been a substantial freeing up of cash from the Closed Block business up to the parent holding company, and we've seen the benefit of that in our cash flow and, hence, that may be skewing the numbers that you're looking at. And, again, then depending on the timeframe that you're looking at, if you look at the positive convexity that I've mentioned that we have to interest rates, as interest rates have increased from their lows we have benefited from that and that frees…

Thank you. Our next question comes from the line of Suneet Kamath at UBS. Your line is open.

Thanks. Good morning. I wanted to start with Retirement, if I could. If I go back to the Investor Day, you showed a helpful slide that shows the profit emergence of PRT versus longevity transactions over time. So my question is, what is the relative size of those two businesses? I'm not sure if – what's the right way to do it in terms of reserves or capital or earnings, but can you give us some sense of, given the deal that you've announced today, the relative sizes of those two businesses? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Suneet, this is Steve. I'll speak to the business that we've done in this quarter. As Mark mentioned in his comments, we had about $7 billion in sales in the quarter, of which about $1.5 billion was funded business and the remainder was in several different longevity transactions. In terms of the overall size of the book, we're looking for that data now and can provide it to you in due course.

Okay, great. And I guess my follow up question is just a follow up to Seth's on the $2 billion of debt that's maturing that you're going to repay. I haven't done the math on what the financial – the implications are for the financial leverage ratio if you repay that debt, but just based on where you sit today it would seem that you're going to be well below your 25% target that you use when you assess access capital capacity. So just wondering what the thought is there? Are we going to, at some point, see a reduction in that target from 25% to something lower? Or how should we think about that? Robert F. Falzon - Chief Financial Officer & Executive Vice President: The debt reduction would actually be in the total leverage ratio would not affect our financial leverage ratio. So we've already re-characterized the debt that's to be repaid from financial to operating, so the $2 billion that's coming up will further reduce – will then repay operating debt. So our total financial ratio will decline from around 44% to around 42%, but there would be no impact on the reported financial ratio.

Okay. So you're still going to travel around that 25% target that you've talked about? Robert F. Falzon - Chief Financial Officer & Executive Vice President: That's our targeted number and while we may bump above or below it, depending on any given quarter and particular situation that or opportunity that we're looking at, our intent is to have it hover around that number, yes.

Okay, thanks. Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Suneet, let me just follow up on your question. If you look at page 18 of the QFS, we do break out total account values for longevity reinsurance and group annuities and other products, so you'll see those numbers there.

Okay. But is all that group annuity stuff PRT or are there other pieces in there? That's why I was - Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Yeah, there are some other products and there's legacy PRT in there.

Okay. All right, I'll follow up later. Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: But you do see the longevity, which is essentially the U.K. longevity block that we've added over the last couple years.

Okay, thanks.

Thank you. Our next question comes from the line of Jimmy Bhullar with JPMorgan. Your line is open.

Hi. I had a few questions. First on the FSA business, you've had positive flows now, I think for three straight quarters, so – and this quarter was especially good. So in the past, your outlook for the business and your view on market trends hasn't been that positive. I'm wondering if that's changed recently. And then on Group benefits, margins in both group life and disability seemed like they were unusually good. Not sure if it was an aberration or it's the result of pricing actions that you've taken and is this somewhat of a sustainable level in margins into the second half? Or would you expect margins to compress from these levels? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Jimmy, this is Steve, I'll address both your questions. We think the full service flows that we've seen reflect the investments we've made in the business to be – to lower our unit costs and manage our unit costs more effectively and to improve our persistency and our sales pipeline. So we think that the – like I say, the sales we've seen reflect our enhancement of our competitive position. By the same token, we still view this as a highly competitive business and one in which sales and flows will be fairly chunky over time. This quarter's sales did not reflect any particularly large jumbo cases on either the sales or on the withdrawal side, but for example, in – it's been publicly announced, in July, we closed the State of Connecticut business, which was over $4 billion. So we still view this as something that will, like I say, have its ups and downs and that we see as a highly competitive business in which we're going to maintain our pricing discipline. On Group benefits ratios, I'd segment it out into life and disability. In life, we think the guidance we've given of a target range for the benefit ratio between 88% and 92% still holds. This was a good quarter, at the lower end of that range, but still within the range. On disability, we've given a similar range of 88% to 92%. Quite frankly, I do think that range is rather stale, as we see our successful efforts in remediation of the existing book and as we in particular see our successful efforts in improving our claims management capabilities. We think there's the potential for, as things settle down in our remediation of this business for revising that target ratio over time. I don't have a different type of figure for you yet, but I would expect that as we take a look at that, we'll come up with something that is in between the 88% to 92% range at the high-end and where we are today at the low-end.

Okay. And then for Mark, on the Department of Labor fiduciary standards, how much of an impact do you expect the standards, if they are approved in final form similar to how the preliminary guidance was, how much of an impact would you see on your business and what are the specific product lines that you think will be the most affected?

That's actually a question for Steve. Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Jimmy, I'll respond to that. I think some people have been asked on their calls do they see the DOL impact as a net-negative or a net-positive. We see it as a net-negative on the marketplace that we serve. We see the risk of individuals having restricted access to advice and certain types of solutions, in particular around guaranteed retirement income solutions. Just to give you a little bit of a flavor, the regulation itself is certainly voluminous and so is the industry commentary that has been made in response to the regulation. I think it's far too early to anticipate exactly what changes will ultimately be enacted and to give you an estimate of the impact of those changes. I can say that in our own comments, we highlighted a few different areas that really need clarification or outright amendment. To highlight a couple of those: like many in the industry, we believe that the fiduciary definition in the regulation, as drafted, is too broad, encompassing activities such as traditional marketing that were really never viewed as or intended to be fiduciary in nature. We also share concerns expressed by many others that the best interest contract exemption, as it's written and as it could be interpreted, would be highly problematic and could entail higher compliance burdens and costs and potentially higher legal exposures for industry participants. And we also highlighted where the DOL really needs to clarify and sharpen the distinction between education and advice. For us, in Prudential, as I highlighted on our last earnings call, we do believe that our market position, our mix of businesses, and the strength of our franchise will help us to adapt to any regulatory framework that emerges. We think that there are some aspects of our particular business model that benefit us in this regard. For example, most of our DC recordkeeping businesses is with cases with over 100 participants already, and that's relatively less impacted in this regulation. The investment platforms supporting both our Retirement and our Annuities businesses already operate on very much of an open architecture basis, and our own agency force, Prudential Advisors, sells a range of proprietary and non-proprietary products. So we think we're relatively well positioned to deal with an emerging regulatory framework. However, we still do view this, as I say, as something that has the potential for unintended negative consequences on the marketplace and the clients that we serve.

Okay, thank you.

Thank you. Our next question will come from the line of Eric Berg with RBC Capital Markets. Your line is open.

Thanks very much. I'd like to start by talking about the Retirement business. Just eyeballing the set of column charts on the right on slide 10. I'll let you get to that. It looks like the business, the real growth in the business is on the longevity reinsurance side as opposed to the funded side. Is that right? And if so, why are clients gravitating towards that option? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Eric, this is Steve. I think we've seen growth on both fronts. I think that, naturally speaking, the longevity reinsurance business, being reinsurance activities at its core, tends to be in higher tickets, higher transaction sizes. But as we've spoken about before, both in terms of earnings attribution and in terms of capital attribution, the funded business has higher earnings per dollar of account value and higher capital attribution. In terms of the solutions and what kind of marketplace is developing more rapidly, I would say that the U.K. longevity reinsurance industry has been established for several years now. There's a regular stream of transactions in the marketplace in what has become a relatively well-established business. The pension risk transfer business on the funded basis in the U.S. tends to be more episodic in nature. We still view the business as having developed very nicely over the past couple of years, but particularly in the large case market in which we tend to do most of our business, that's naturally going to be episodic in nature.

And, Eric, the longevity reinsurance transactions are more attractive to clients in the U.K. for structural and cost reasons. In the U.S., we've actually done much better on the fully funded deals. So it's not that clients choose one or the other, you're kind of seeing two different places here. Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Yeah, the longevity reinsurance business really has not yet emerged in the U.S.

Before turning to a question about Annuity, I just want to ask one quick one further about Retirement. Just to make sure I understand what exactly we mean by case experience here being favorable. Is the idea plainly and simply that deaths of plan participants are happening at a greater rate than you priced for, so you're ceasing payments to annuitants sooner than you priced for it, is that what you mean by favorable case experience? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: That's primarily it, Eric. There's also an impact from investment experience as well.

One last question regarding the Annuity business and I'll be wrapped up. One of the things I noticed in your supplement is that despite the – what has now been a multi-quarter effort to de-risk the Annuity business, the relationship between the two sets of account values, those with higher risk and those with less risk, whether they're reinsured or don't have equity risk, hasn't really changed, that's what at least I'm taking away from the supplement. Is that right? And if so, why hasn't this ratio changed? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit: Well, Eric, I think on that front – this is Steve, again – it's just more a matter of the math. We have a very large in-force book and we have embarked on this product diversification effort for basically two years now. We've had, I think, remarkable success in altering our sales pattern over those two years, as Mark highlighted in his business commentary. But the plain mathematical fact of the matter is that it will take time for that altered sales pattern to have a significant impact on the nature of the in-force.

Very good. I'm all set. Thanks very much. Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Cynthia, we'll take one more question, please.

Certainly. And that will be the line of Michael Kovac with Goldman Sachs. Your line is open. Michael E. Kovac - Goldman Sachs & Co.: Great. Thanks for taking my question. I'm just wondering, on the assumption review this quarter, if you could walk us through in a little more detail relative to last year what some of the underlying changes that you made were and specifically thinking about long-term and shorter term interest rate assumptions embedded in some of your products. Robert F. Falzon - Chief Financial Officer & Executive Vice President: Michael, it's Rob, I'll try to tackle that. First, let me answer the latter part of it. We actually brought down our long-term reversion rate, both in the U.S. and Japan, by 25 basis points, and that had a negative impact on our assumption update for the year. Offsetting that were positive drivers that we had. And if I had to sort of summarize them across the businesses, it would be that mortality was a positive impact both in our Life and Corporate and Other business. The annuity utilization rates, specifically on our GMIB product, was a positive impact, and then we had a positive impact from long-term disability termination rates. If you look at the AOI impact of that, I think as Mark highlighted, that was a positive of about $117 million, but importantly on a GAAP net income basis it was also a positive of about $60 million, and so while it had less of a positive impact on a GAAP basis we nonetheless had a positive outcome there as well. Did that answer your question without getting into specifics on any individual business? Happy to do so if you're looking for more detail. Michael E. Kovac - Goldman Sachs & Co.: Yeah, I can…