Ladies and gentlemen, thank you for standing by and welcome to the first quarter 2016 quarterly 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 at that time. I would now like to turn the conference over to your host, Mr. Mark Finkelstein. Please go ahead. Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Thank you, Christie. 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, President & Chief Executive Officer: Thank you, Mark, and good morning, everyone. Thank you for joining us. While our underlying fundamentals in Q1 remained strong, we were buffeted by market headwinds and our first quarter results trailed our expectations. This quarter's operating earnings per share of $2.26, which excludes market-driven and discrete items, is below the $2.65 we reported in the first quarter of 2015.…

Thank you, John. Good morning, good afternoon, or good evening, and thank you all for joining our call today. I'll take you through our results and then I'll turn it over to Rob Falzon, who will cover liquidity, leverage and capital highlights. And I'll start on slide two. After tax adjusted operating income amounted to $2.18 per share for the quarter compared to $2.79 a year ago. After adjusting for market driven and discrete items, EPS was down $0.39 from a year ago. While underlying business performance was solid, the decrease reflected a less favorable macro environment and negative fluctuations in some inherently variable items. Non-coupon investment returns were about $90 million, below our average expectations in the quarter, in contrast to a year ago, when we called out a contribution about $60 million above expectations. Earnings from asset-based fees in our U.S. businesses were about $50 million below the year ago level, largely reflecting the 5% decline in equity market averages. And the contribution from other related revenues in our asset management business, which is largely driven by changes in market values and timing of transactions, was $25 million below the year ago quarter. We estimate that these three items, together with less favorable currency exchange rates, had a negative impact of roughly $0.40 per share on the comparison of results to a year ago. Now moving on to slide three. Returns on non-coupon investments fluctuate over a cycle by their nature. As we mentioned in our earnings guidance call in December, our long term expected returns on these investments are 6% to 7%, with our expectation for 2016 slightly below the long term average. In our case, included in non-coupon or alternative investments, are private equities, hedge funds, real estate, and a $3.6 billion public equity portfolio held…

Thank you. And we will go directly to the line of Erik Bass with Citigroup. Please go ahead.

Hi. Thank you. I just wanted to start with a question on Japan, and I was hoping you could provide some more color on the sales growth this quarter. And for POJ, talk about what's driving the increase in productivity and whether you think sales can continue outpacing Life Planner growth. Charles F. Lowrey - Chief Operating Officer-International & EVP: Sure. So In terms of sales, on the Life Planner side, and then if you want, I can do Gibraltar, but sales were up about 15%. And that's half, as indicated before, due to the Life Planner growth of about 6% and then some due to the productivity. But the Life Planner growth has really come from the sales manager growth, which is really up 7%. And we talked about that for about the past year, where we've increased the number of sales managers. And that has a lag effect but then goes to the increase in Life Planners. So, the real answer is it really is the – both the productivity and the number of Life Planners that has led to the growth. And there's a little increase in premium, but not really that much. It's mainly the Life Planner growth and the solid growth there.

Got it. And are you seeing more competition in non-yen denominated products given the drop in JGB yields? Charles F. Lowrey - Chief Operating Officer-International & EVP: We're seeing some increase in competition, but we have such a range of non-yen products – and it's retirement income, it's whole life, it's fixed annuities – that we enjoyed a great deal of increase in the sales of the past quarter were in non-yen products. So, there may be more competition, but we're still seeing significant growth in that area.

Thanks. And then, John, if I could just ask one more. I was just hoping that you could expand on your comment that you have options to challenge your SIFI designation or pursue a SIFI off ramp. I was just wondering if you could comment on what are the different mechanisms available to you? John Robert Strangfeld - Chairman, President & Chief Executive Officer: I think Mark is best to speak to that. Mark?

Yeah. First, with respect to the notion of an off ramp, that's a pretty vague concept that hasn't really been operationalized yet. So I wouldn't be thinking in terms of the options that we might have to reconfigure the company in a way at this point that would make an off ramp a clear option. The reference is primarily to the ongoing designation process, which does involve an annual redesignation, and in the context of the way the annual redesignation works, we retain the ability or the option if we choose to, following a redesignation decision to contest that decision and to contest that decision in court. So, the principal option that's referenced there is the process that we go through every year in redesignation and the fact that options remain open to us as we're redesignated.

Got it. So you do have a legal option to challenge a redesignation.

Yes.

Got it. Thank you.

Thank you. And our next question is from the line of Jimmy Bhullar with JPMorgan. Please go ahead.

Hi, first on the recapture of the VA captive, are you able to discuss what you expect the capital impact of that to be if there is one? Robert M. Falzon - Chief Financial Officer & Executive Vice President: Jimmy, we expect to be able to cover it more holistically in our second quarter call. I can offer some comments on where we are.

Sure. Robert M. Falzon - Chief Financial Officer & Executive Vice President: We remain on schedule to recapture VA captive, as I mentioned in my introductory remarks. We're doing that in phases – the entire project – through 2016. Recall that the first step of that was actually accomplished last quarter when we got the regulatory approval for our statutory framework. And then the second step is what we've mentioned, which is as of April 1, we've done the actual recapture of the Living Benefit rider from the captive back into the ceding companies. We have some remaining steps in front of us. They're around ALM strategy, around some of our hedging strategies, implementation of those, and then operationalizing and reporting around those as well. I think the important takeaways are that one, we're – this is part of a broader strategy we have around a priority of reducing volatility in our reported results – and ensuring that the very strong fundamentals that we have in our businesses are being mapped to and visible in our reported financial results. And I think in the first quarter, you've seen some of the benefits of that in terms of the reduced volatility that we had in our capital numbers in the quarter.

And I'm assuming you're not assuming a huge impact. Obviously, you can't give me precise numbers on your capital, otherwise there would have been either a comment on that or maybe a slowdown in buybacks or something else, right? Robert M. Falzon - Chief Financial Officer & Executive Vice President: Well, again, Jimmy, it's a multiphase. And so, simply upon recapture doesn't mean that there's instantaneously the pro forma effect of what we ultimately hope to accomplish with regard to the recapture initiative as opposed to the physical recapture itself. And I think what we've said is, we can accomplish all of this and we're confident in doing so, that there will be no adverse impact to our overall financial resources; and in fact, we expect increased financial flexibility as a result of the completion of the initiative.

Okay. And then one for Charlie on Japan. How has the depressed JGB yield environment there caused you to change your strategy for the Japanese business if it has, and the type of products that you're avoiding versus the ones that you're pushing more proactively. Charles F. Lowrey - Chief Operating Officer-International & EVP: Well, I think it is affected us obviously over time. We've been dealing with low rates for a long period of time. They're obviously lower now than they were before. But we have, I think, proactively either eliminated products or lowered crediting rates or commissions, and we've been doing that for some period of time. In the last earnings call, I think I articulated that we stopped selling any single premium life or retirement products in the third party channels. And we've reduced crediting rates in some of the – in our other captive channels. So, we will continue to monitor this very closely. The other way it has affected us, I think, is that we have sold more U.S. dollar products, and we've done that for a couple of reasons. One, as you said, rates are much lower in Japan, so on a relative basis, they're better in the U.S. But also, the appreciation of the yen has led people to think, gosh, with yen I can buy more dollars and therefore U.S. dollar products are more attractive. And with a wide range of suites – the suite of a wide range of products that we have in the U.S. – I think our product offering is quite attractive. So we have, if you will, taken advantage of the lower rates by virtue of the products that we offer, and we'll continue to very proactively manage our product mix in order to protect margin.

And the yen denominated business that's on your books, is that earning your targeted returns? Or is it a little bit of a drag versus what you had assumed previously? Charles F. Lowrey - Chief Operating Officer-International & EVP: Well, I think the amount we have on our books is returning what we want. The – obviously, we're not immune to negative interest rates, and there's some impact on our margins on the new products we sell. But again, we're looking at those products and we're lowering crediting rates and commissions and, in fact, eliminating some products that don't meet our hurdle rates.

Okay, thank you.

Well, and this is Mark. Just remember how much of the profitability in Japan is driven by mortality margins and expense margins, not investment returns.

Thank you and our next question comes from the line Suneet Kamath with UBS. Please go ahead.

Thanks. Good morning. Rob, I was hoping you could, as you've done in the past, maybe walk us through the capital capacity walk. I think we ended the year at roughly $4 billion. I think you're saying you're kind of still there, but obviously there's kind of pluses and minuses. So, can you help us fill in the bridge between the two? Robert M. Falzon - Chief Financial Officer & Executive Vice President: Sure, Suneet. So, as we've mentioned in the past, our businesses generate a significant amount of capital and there was no change from that in the first quarter. I think we provided sort of rules of thumb that are helpful around that. And that's the fact that about 60% of our operating earnings translated to free cash flow. So, you can think about that. While it varies in any given quarter, you can think about that as being a capital generating capacity in the form of free cash flow. And as I said, that's sort of representative of what we would see over a longer term, but also in the first quarter. There were significant capital deployment actions during the course of the quarter. So, as I mentioned in my introductory remarks, we had about $0.7 billion of shareholder distributions. That was in the form of both share repurchases – and that's an elevated level. Recall that we increased our buyback program by about $0.5 billion at the end of last year for this year. We increased it from a $1 billion to $1.5 billion. And it was also in dividends. And recall, that we also increased that dividend rate by in excess of 20% last year. So, those were the distributions. We funded about $0.5 billion from our Chilean acquisition. Now, that we had already earmarked from our capital capacity that we articulated at the end of the year, because it was an imminent transaction. So when you think about apples to apples, the Chilean acquisition was already taken out of the capacity number. And so, the remaining variable was the fact that we reduced our debt by about $0.25 billion. It was maturing and we paid that off. So, thinking about sort of going from year-end to the end of this quarter, that you generated internal capital capacity that was sufficient to fund our shareholder distributions. The M&A activity and strategic investments were taken care of in our prior allocation of capital. And you have left the debt reduction, which would be sort of maybe a placeholder for the order of magnitude of change in our total capital capacity from year-end to where we are now.

Okay. And then, I guess, on the yen hedge, I had thought on prior calls we had talked about some cash payments moving from Japan to the holding company, as sort of an additional source of flexibility. But now it seems like you're indicating that there's not a significant change in the timing of those cash flows. So, I'm just curious why, given the significant strengthening we've seen in the yen, why wouldn't we expect at some point to see maybe cash flowing from the holding company to the Japanese entities? Robert M. Falzon - Chief Financial Officer & Executive Vice President: Good question. So let me bring that up a level and, if I can, respond to that more holistically. So, first, the hedge is doing exactly what it was designed to do. As and if the yen has depreciated, that has yielded proceeds to us. We've been able to take those proceeds and redeploy them, either in the form of share repurchases or in the form of investments in order to restore the ROE that otherwise would have been lost by virtue of the depreciation in the yen. To your point, as the yen appreciates, you get things that could go the other direction. So, hedge settlements would go instead of from the Japanese companies to the holding company, they would go the other way. However, the point is that ROE is protected in either direction. And we've actually experienced this in the past. The higher yen earnings contribute to sustaining our targeted enterprise ROE because what happens is, over time, our yen earnings are higher. It creates greater dividend capacity, and that translates ultimately into greater U.S. dollar dividends coming back to us. So, when we actually think about that yen hedge, it creates capital capacity when there's a depreciating yen. When there's an appreciating yen, what happens is we have something that I would consider to be more of a liquidity issue. Which is we temporarily have to fund the mark on those going down to the Japanese companies, but that ultimately works its way back to us in the form of higher earnings and greater dividends coming back to the holding company.

But in terms of that lag, you're not expecting a big liquidity draw on holding company resources until you wait for those higher earnings from Japan to send cash back. I mean, there's a timing issue, but you're not expecting a big change in terms of that holding company liquidity, right? Robert M. Falzon - Chief Financial Officer & Executive Vice President: That would be correct. So, two thoughts on that. First, with regard to this year particularly, as I alluded to in my introductory remarks, we actually have locked in our settlements for this year. So, we have about $0.5 billion for the entire year of pre-tax gains that are locked in for the year and in fact will be coming our way, regardless of what happens to the yen rate during the course of this year. That's one. Two, the settlements beyond this year are actually staged out over long periods of times. And that is – and actually with the intent of trying to match up dividend paying capacity against settlements that we might otherwise have against those hedges. So, we're actually very conscious of that and ensuring that it doesn't create a short-term liquidity dislocation.

Okay, thanks, Rob.

And we'll now go to the line of Ryan Krueger with KBW. Your line is open. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Hi, thanks. Good morning. I have a follow up question for Mark on the FSOC potential to legally contest. In terms of your legal right, are you – if you were to contest the redesignation, does that legally only apply to the specific redesignation process or does it allow you to essentially legally contest the entire designation to begin with? Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: No, it's the whole designation. I mean, technically that redesignation is a renewal of the original designation. So, we're talking about the same thing. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. Got it. And then quick one, do you have anything you can provide in terms of earnings expectations for the Habitat deal now that it's closed? Charles F. Lowrey - Chief Operating Officer-International & EVP: Um, I think what we have said is that the – we closed on March 1 and that the – we're very pleased with what we have so far in terms of earnings. Now, one month does not an acquisition make. And those earnings are in part coming from the stable cash flow and the dividends that come up. And part of it is from the encaje. And obviously, with the encaje having invested March 1, that was a good time to invest, given the quarter. So, we're pleased with the first quarter. It meets our original assumptions and return expectations and we'll see how it goes from here. Robert M. Falzon - Chief Financial Officer & Executive Vice President: And this is Rob. The only thing I'd add to Charlie's comments is that, I think, as we've communicated, when we made this investment, this investment was accretive to what we viewed to be our hurdle rate ROE. So, when you sort of think about the returns that we expect to get on this, you can look at what we've paid for it, think about the ROEs that we expect to generate; that would give you an indication of what would be a sustainable level of ongoing earnings coming out of that investment. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. Got it. Thank you.

Next we have a question from the line of Sean Dargan with Macquarie Capital. Please go ahead. Sean Dargan - Macquarie Capital (USA), Inc.: Thanks. Good morning. I know the PRT business is lumpy, but can you give us any more color on what you saw there in the first quarter and maybe if anything's changed due to market dislocation year to date? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit, Prudential Financial, Inc.: Sean, this is Steve. I'll address your question and thanks for it. We don't see any fundamental changes in PRT market dynamics. We think that the propensity to transact is still very strong. When it comes to interest rates, a big impact on propensity to transact is not just what rates are today, but what is a plan sponsor's expectations about rates in the future. And we see increasingly, a reduced expectation that rising rates will address the liability. So, we still see healthy propensity to transact. Obviously, market conditions have, in some cases, impacted funding levels, but we've also seen, especially in the large case market that we specialize in, we've seen plan sponsors undertake steps to protect those funding levels through various types of hedging instruments. Not with us, but in their investment activities. So, like I say, we still see healthy pipeline. I will mention that since the close of the quarter, we have announced a longevity deal in the UK with Legal & General of less than $500 million. So as I said, we still see healthy pipeline. And when you consider the increasing awareness of the longevity risk, when you consider the rising PBGC premiums, we still see lots of inclination for plan sponsors to pursue this solution. Sean Dargan - Macquarie Capital (USA), Inc.: Okay. Thank you.…

And next, we'll go to the line of Eric Berg with RBC. Please go ahead.

Thank you. I have a question about the – just one question today – about the growing number of market participants, and this was referenced earlier, who are selling dollar denominated investments, both annuities and life insurance in Japan. It just strikes me as curious, and I guess this is more of a question of a cultural rather than a financial nature, but what is it about Japan and Japanese nationals that lead to the interest in these products exposing the customers to FX risk? I presume that in the typical transaction the customer is not hedging the customer's foreign exchange risk. It's exposed therefore to the possibility that down the road, either when the customer retires or the customer dies, the family will receive less money than the customer thought because of a weakening of the yen, the customer's family receives or customer in retirement receives dollar investments. What's your sense of why the customers are willing to take this FX risk? I guess I'd wrap up the question by saying I can't imagine if we sold yen denominated life insurance in the United States, it would be nearly as successful as your dollar denominated products there. Charles F. Lowrey - Chief Operating Officer-International & EVP: Well, I think the last comment you made is absolutely correct. I think the issue with Japanese consumers is one of having lived with a low interest rate environment for a long, long period of time and looking at the interest rate differential with the U.S. And yes, you are right. They do take the FX risks. But over time, what they believe and what their experience frankly has been, is that the FX risk is not as great as the interest rate differential and therefore they're willing to do that. You've seen it with the U.S. dollar product and you've seen it with the Aussie dollar product. And they're very savvy, because they'll go back and forth from time to time. Now, most of the product we sell, as Mark suggested, is life insurance based, it's protection based. So they buy it for different reasons. It's not savings products, per se. But they do look at the interest rate differential and then make decisions accordingly, and they have for a long period of time because they've been living in an environment where those differentials in interest rates between Japan and then the U.S. and Australia have been there for a long period of time.

Very clear. Thank you. Oh, you're going to say something else? Go ahead. I'm sorry.

Eric, also keep in mind that retail investors in Japan don't take a lot of other risks. They're very conservative in saving in the mattress as opposed to buying stocks for example. So this is one place where they just may choose to take risk instead of other places.

Thank you, Mark.

And next, we'll go to the line of Steven Schwartz with Raymond James. Your line is open. Steven D. Schwartz - Raymond James & Associates, Inc.: Hi, good morning everybody. First, a question on the alternatives. Mark, I think you said that your expected return on your non-coupon investment portfolio is 6% to 7%. Is that pre-tax or after tax? Alan Mark Finkelstein - Senior Vice President & Head-Investor Relations: Pre-tax.

Pre-tax. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. That strikes me as awfully low compared at least to how other companies talk about the expected returns on their alternative investment portfolios. I was hoping maybe you could touch on that; maybe it's mix or something like that? Maybe it's Japanese equities? I don't know. Robert M. Falzon - Chief Financial Officer & Executive Vice President: So, Steven, it's Rob. I'd say a couple things in response to that. One is, those are our actuarial expected returns as opposed to what our portfolio managers would expect. I would think our portfolio managers would concur with you. They're expectation is actually to produce a higher return, but when we build in our returns for budgeting and forecasting purposes and for purposes of communicating to you, we think about a level of conservatism in that. And those are the numbers that we express. That would be one. Two, yes, if you look at the overall composition of our portfolio, you would say that it's got a conservative tilt to it. As I mentioned before, with respect to the hedge funds, our expectation with the hedge funds is to mute volatility as opposed to produce outsized returns. And then, similarly with respect to what we've got in our private equity allocation, which is about a quarter of the total alternatives budget, we look at that as – we don't take what you would consider to be sort of venture capital risk in our private equity – but rather more traditional private equity which would be further in in the risk spectrum. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay, and thanks for that. And then moving on to asset management. I was interested, of the $166 billion, I think…

Thank you. And we'll now go to Randy Binner with FBR Capital. Please go ahead. Randy Binner - FBR Capital Markets & Co.: Hey, thanks. I guess I'm going to ask the DoL question that hasn't come up yet. And so, we've had calls with some other folks this morning and the basic concept that I think we're all trying to get to is, if you are primarily a manufacturer of variable annuities, which is the case, and you look forward to when you're going to be selling these Vas post-implementation of the DoL rule, that would be under the best interest contract. And so, it's kind of a two-part question. One, do you think that the distributor rather than the manufacturer would be the one who is a party to the legal risk of the best interest contract? And if that is the case, can you characterize your conversations with your distribution thus far and kind of how constructive they are so far on being able to sell VAs under the BIC? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit, Prudential Financial, Inc.: Randy, it's Steve again. I'll address your question. I'm not going to get into an apportionment of legal liability. I'm sure you understand that. But I would say that – I would point out that manufacturers will have a responsibility to perform certain processes and provide certain information to distributors so that they can fulfill their obligations under the contract. And we are making the necessary preparations to do exactly that. I think if I could, just to address some other questions that I know have come up on other calls regarding the DoL, just to make some broader comments. The final rule does contain some meaningful improvements. We still think it creates…

Yes we do. We'll go to the line of Humphrey Lee with Dowling & Partners. Please go ahead. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Good afternoon. Thank you for taking my question. Just one follow-up question related to the other related revenue in asset management. I understand that line item could be – could fluctuate from time to time. And my – at least my understanding is – in the first quarter, at least one of your peers talked about there's a slowdown in commercial mortgage loan origination activities and that hurt their similar type of fee revenue for the quarter. Do you see something similar in this quarter? And if so, how is the second quarter to date kind of trending in terms of commercial mortgage loan activities? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit, Prudential Financial, Inc.: Humphrey, this is Steve again. That really wasn't a factor in our ORR results, our other related revenue results. The year-on-year decline that Mark cited in his review was really driven by performance and incentive fees, which were impacted by market turbulence and by strategic investing, which was also impacted by market turbulence. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Got it. And then, in terms of kind of thinking on a normalized basis, again, I understand you don't provide explicit guidance for this line of items. But, what would be more of a trendable or more sustainable level that – at least for modeling purposes? Stephen P. Pelletier - Executive Vice President & COO-US Business Unit, Prudential Financial, Inc.: Humphrey, I would just describe the recent trend and the recent quarterly trend in this category has been about $30 million. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Okay. Got it. Thank you.

Ladies and gentlemen, this conference will be available for replay after 3:00 today through May 12, 2016. You may access the AT&T replay system at any time by dialing 1-800-475-6701 and entering the access code 383123. International participants, please dial 320-365-3844. That does conclude your conference for today. We thank you for your participation. You may now disconnect.