Good afternoon, ladies and gentlemen, and welcome to the first quarter earnings call of Ameriprise Financial. (Operator Instructions) I will now turn the call over to Laura Gagnon. Ms. Gagnon, you may begin.

Thank you. Welcome to the Ameriprise Financial first quarter earnings call. With me on the call today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, our Chief Financial Officer. After their remarks, we'd be happy to take your questions. During the call you may hear references to various non-GAAP financial measures which we believe provide insight into the underlying performance of the company's operations. Reconciliations of non-GAAP numbers to the respective GAAP numbers can be found in today's materials, available on our website. Some of the statements that we make on this call may be forward-looking statements, reflecting management's expectations about future events and operating plans and performance. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in today's earnings release, our 2008 annual report to shareholders, and our 2008 10-K report. We undertake no obligation to update publicly or revise these forward-looking statements. With that, I'd like to turn the call over to Jim.

Good afternoon, everyone, and thanks for joining us for our first quarter earnings discussion. Even with the rally in the equity markets in March, the environment remained challenging and volatile during the first quarter. The S&P 500 was down 40% from a year ago and 12% just for the quarter, and macroeconomic data remained weak. Considering this tough backdrop, we're pleased with how the company performed. Our earnings of $129 million or $0.58 per share demonstrate the resilience of our franchise, the continued strength of our balance sheet, and the actions we've taken to prepare the company for the current environment. Of course, the weak conditions continue to affect our business. Owned, managed and administered asset decreased by 21% compared with a year ago as a result of the sharply lower equity markets, which impacts our revenue. And at the same time short-term interest rates remain near zero and credit spreads in certain industries are very wide, which continues to impact our net investment income and balance sheet. Overall, our revenues were down by 14% to $1.7 billion compared with the first quarter of last year. That said, our business fundamentals continue to be solid. Client and adviser retention are very strong. We're driving significant gains in experienced adviser recruitment. Our fixed annuities and certificate businesses are providing the safety clients are seeking. We've reduced expenses significantly, we've further strengthened our balance sheet, and we have increased our excess capital position and continue to maintain a large liquidity pool. So my message for you today is this: While the environment continues to be very difficult, as we've seen in the quarter, we are riding out the storm. We've generated reasonable earnings and continue to strengthen our financial foundation. I believe the company is well positioned both for the short-term challenges…

Thanks, Jim. We have posted slides on our website again this quarter and these slides will be updated with my talking points after the call. If you will turn to Slide 2, my discussion today will focus on four topics - business metrics, earnings, balance sheet strength, and the accounting changes we adopted in the quarter. In the quarter, activity metrics continued to reflect the market dislocation and lower client activity, but flows and adviser metrics trends are encouraging. The first quarter results reflected the volatile markets and headwinds created by those markets. We achieved a $0.58 reported per share profit and core operating EPS was $0.60 per share. Finally, the balance sheet fundamentals remain strong and we adopted [FSP No. 157-4], Additional Guidance Relating To Fair Value In Recognition of Credit-Related Impairments. Turning to Page 3, for the quarter all advice and wealth management metrics continued to be impacted by external markets. Clients continued to shift to defensive products, focusing on fixed annuities, universal life, brokerage cash, deposits, and certificate products. Sales of mutual funds, variable annuities, variable universal life and other insurance products are being negatively impacted by this shift. Mutual fund redemptions are stable and consistent with historical trends and in the quarter we experienced both strong core adviser trends and positive retail flows. Turning to Slide 4, this slide shows the details of the favorable adviser and client trends. Client retention remains at 94%, with an increasing portion of client acquisitions coming from newly appointed experienced advisers. The adviser retention chart indicates the improved pattern. Franchisee retention is stable at 93% despite senior advisers managing their headcount through the market dislocation. The retention of our most senior and productive advisers remains at all-time highs. Employee retention has increased from 61% in the year ago period to…

(Operator Instructions) Your first question comes from John Nadel - Sterne, Agree & Leach. John Nadel - Sterne, Agree & Leach: A couple quick questions, maybe one high level one, thinking about the FASB changes, and then maybe a couple of quick ones on the annuity line, if I could. On FASB, did you shift anything from Level 1 or 2 to Level 3 and market any differently as a result of the changes from FAS 157?

No. John Nadel - Sterne, Agree & Leach: A question on the annuity segment, maybe a little bit detailed here. I'm looking at the slide in your supplement that walks through all the disclosed items and I'm looking at the annuity line and the amortization of deferred acquisition costs. And if I make the adjustments for the couple of items there and adjust that versus your reported number, it looks like DAC amortization in the quarter what you would have us think or what you would refer to us as a normal DAC number ex those items was $38 million and I can't remember a quarter where your DAC amortization was that low. Is there some way maybe you can give us a little bit more detail about how to think about that? Is that a function of your shift to a reversion to the mean or is there something else there?

No, it is lower but it relates to the [inaudible] profit and lower surrenders, so it corresponds to that. John Nadel - Sterne, Agree & Leach: And then just thinking similarly around the benefits line in the annuities segment, again, if we look at the negative benefits number on a reported basis and then adjust for those one-time items, we get to a normalized level of benefits of about $65 million pre-tax. Similarly, that seems relative low.

Well, the benefits, again, that you're getting the impact of the FAS 157 coming through. John Nadel - Sterne, Agree & Leach: Walter, I’m adjusting for those one-time items from the disclosed items page, so if I take the reported number -

I'm getting a slightly different - actually a higher - benefits number and a different DAC amortization numbers, so we can take it up after the call. I can reconcile it with you. John Nadel - Sterne, Agree & Leach: The last item would be just to think about your definition of core earnings. I know you're guiding us to think about $0.60, but there's a benefit in there from the early retirement of the debt. Is there some reason why we should think about that as ongoing? And then secondly on that, can you just talk to us about what your normal tax rate was in the quarter? Even if I adjust for the 35% statutory rate on the one-timers, it looks like the tax rate in the quarter was extremely low.

Yes, the tax rate has been low and it's been low for quite some time as we do effective tax planning. John Nadel - Sterne, Agree & Leach: Maybe you can help us with how to think about that going forward, then?

Well, I think we have given previous advice. Obviously, with the market situation as the PTI comes down you'll have a lower effective tax rate. Our previous guidance has been in the lower 20s and I think now that gets adjusted down to the lowest PTI, again, depending where markets go. So it will drop into the teens. Now as relates to the hybrid - I think you said retirement hybrid - I guess the way I look at it and obviously each person will have to form their own judgment, the conditions that created basically the drop in our core earnings, which we relate to equity markets and the spread, earning 20 basis points versus 200 basis points, and certainly the need to maintain a large liquidity pool, created the opportunity to generate and purchase our debt at $0.50 on $1. So is it going to be reoccurring? I think it's the same dislocation that's causing both. John Nadel - Sterne, Agree & Leach: Okay, I understand what you're saying. So equity markets return to a normal level, that sort of thing, we don't necessarily have a debt gain but we have the ability to earn better from just a core perspective. Got it.

Your next question comes from Colin Devine - Citigroup.

I'd like to come back to the annuity line because it seems to me, Walter, in trying to just work through the numbers - and obviously, for advice and wealth management and asset management, a tough quarter but certainly expected given the markets - but when you talk about FAS 157 adjustment, did you use a much higher discount rate this quarter to value the VA liability and that's why we've got this gain? Because I thought you did that in the third quarter, then you took that off in the fourth quarter. And are we back to using a wider discount rate because if we just want to total up benefits and DAC, your run rate's $160 to $180 million a quarter. It's pretty steady between the two. This looks to be a fairly significant swing off that, so if you can just help me through this.

Yes, well I think if you take a look the spreads did widen and obviously we're guided by the correlation that it creates between the insurance and the holding companies as we use comps to do that, so there's really not too much leeway on that. And obviously there was a substantial widening. I believe it went as high as 325 up from, I think, 225. That creates a fairly big gross factor when you adjust on the liabilities. When you finish through the DACing of that, it actually gets down to an appreciably small number that's about $70 some odd million. Then when you take into consideration the normal mean reversion and the death benefits, it pretty much neutralizes through.

But if we put this together, isn't the bottom line here the swing's about $80 million off any kind of run rate. I'm confused as to why you used the lower discount rate in the fourth quarter and now it's come back up again in the fore, which seems to have been what's driven this big swing in the expense line, unless I'm misinterpreting what you're saying.

Are you doing the discount rate on the FAS 157?

How you're valuing your living benefit liability. Is that what's driving the swing in this benefit line?

The benefit line is being impacted, yes, by the 157, the [inaudible] yes.

Then am I mistaken -

It's also the DAC - the total net expense change in the annuity segment, it's down $13 million pre-tax.

Hold on. Maybe you can walk me through, then, what happened in the third quarter versus the fourth versus the first here and why this extreme volatility because this is what's moving the whole earnings for the company up and down.

You want me to go back and reconcile the third and the fourth on this call?

Well, what I thought you'd done in the third was used a higher discount rate and you'd reversed that decision in the fourth, and now it looks like you've used a higher discount rate here in the first. Is that mistaken and if it is, then I got it wrong, but that's what I thought had happened in the fourth, which is why we saw the expense line come back up.

What we reversed in the fourth quarter was actually the DAC. We said that the FAS 157 conceptually will reverse itself. The spreads continue to widen so whatever the market does we have to carry into our valuation, but we don't have to assume they're going to stay there for our gross profits forecast. So that's one of the reasons why, when you look at this impact, the variable annuity benefit impact in the C pages, you're seeing a much higher percentage of DAC offset because we do not expect it to stay. We don't have a lot of options around the impact the spreads have on how we value our liabilities; we have to employ the guidelines under FAS 157. And the fact was that financial spreads widened in the quarter.

So what you're saying is that if we see spreads come in, we're going to see this negative $129 million expense, there's a really good chance that whole thing is going to reverse out?

Yes, it will reverse.

I'm trying to get at what are the economics here as to what's exactly going on with this block because I don't think this represents the economics. I'm not debating the accounting with you.

Well, I don’t make the rules on the 157.

I'm trying to get the economics, Walter.

Well, the economics are being reflected by the fact is, so to your point, as it will narrow, what you would then get is a reversal of the DAC going the other way and it will mitigate it coming back as it goes through. And that's what we're trying to manage through. [Inaudible] given on it, the economics, candidly, as we talked about, Colin, to me 157's an interesting philosophy as it relates to setting up credit default swaps for your paper.

But what you're saying here then is in terms of what helped earnings this quarter for the company was the wider spreads, debt spreads, here on the VA line and then also your ability to buy in the debt at a steep discount. So those two things helped and [inaudible] markets being down pushed it the other way.

Colin, let me say what I think it is and then you can see if we're in agreement or not. There is no question we got a benefit, as I said, from the credit spreads widening, okay? And that was reflected in the living benefits. Offsetting that was really the DAC reversion and the death benefits, which basically negate down. So the benefit to the bottom line was really not significant when you take into consideration both elements. As it relates to the element, as I explained before, yes, there is a benefit on the hybrid, but we're also carrying $0.62 worth of deterioration, which is the same dislocation that is causing me the capability of buying my hybrid in is causing me to carry huge liquidity pools at very low rates and actually suffering the impacts of the market. So yes, I am taking advantage of the other side of it.

Okay, and I have just some final -

[Inaudible] capital structure to do it.

Okay. And then the final, a different topic, do you have any update, Jim, in terms of the federal government programs and Ameriprise's position on what might be available since we have a few new ones since the fourth quarter?

Well, you know, regarding the TARP itself, we have heard nothing from the government. As you know, we applied when the government said that they wanted healthy companies to apply and we did that looking for continued ways to invest in our company potentially with the use of those funds. As you know and we just stated again, our capital position remains strong, our investment portfolio's of high quality, and so if those programs present opportunities we'd be interested, otherwise we think that we're in good shape. Regarding some of the other particular programs we're looking at from an investment perspective depending on what are the sort of guidelines and the sort of attachments to those things, including for our own clients to invest in some of those activities that we've managed the money in those programs. So those are the things we're exploring from an opportunity perspective, but again, we're trying to analyze what sort of stipulations the government has on those various programs as well because we feel that we're in good shape and we want to be able to control our destiny.

Then you are still asking for TARP funds as we stand here today?

We put in an application last year when the government said they wanted all good companies to apply. We have not heard anything, we have not done anything, and I'm not saying at this point in time it's still our viewpoint that we will take the funds.

You've not withdrawn it, though? You've not withdrawn the application?

No, not at this point in time because I think everything's sort of a wait and see on things, so we didn't have to make any decisions on it.

Your next question comes from Andrew Kligerman - UBS.

Let me start with some of the easier ones and then work to the DAC question and hopefully we can hit that real easily. One, on the excess capital, Jim and Walter, you state more than $1 billion. Could you give a little clarity around one, what your RBC ratio was at the end of the quarter, and two, how you get to that $1 billion plus number?

The RBC ratio at the end of the quarter was a bit over 500.

Yes, [ex the 798] S&P.

Ex 798.

And again, you know this is estimates, very rough. It's in that range.

When I calculate that now I get a lot more than just greater than $1 billion. I probably get more than $1.2 billion, maybe even more than $1.3 billion, just back of the envelope. Am I out of the ballpark?

We said $1 billion plus. It's a conservative number. As you know from our past, we've always not given an actual number out. But I would say it's a conservative number.

Then shifting to the statistical supplement, Page 10 of 49, the management and financial advise fees just kind of keep dribbling down. They were $367 million in the first quarter of '08, they fell to $292 million in the fourth quarter of '08, and now you're at about $268 million. Can you give a little color on where you think that kind of bottoming point is, what might drive it up, just a little more color around that one?

Well, you know, I think, as we've said to you in the past, when you have very volatile markets, the client really holds back. They sort of sit on the sidelines a little bit. We see money coming, as we said, some of the flows picked up in the first quarter a little bit. Some monies were redeployed back into equity markets, but a lot more was going into more fixed-type spread products. And so I think what you're seeing is really slow client activity as well as the depreciating markets on the assets under management that they generate fee revenue from in their wrap accounts. So if we see the markets improve, those fees will come back very quickly because the assets are still there. If on the chance that the markets do settle, there's a direction to the markets that people feel a little more comfortable with, we think a lot more money will go back to work. So, you know, I would just say I think the fourth quarter/first quarter looks like some of the low point, look like activity improved a bit in March. It really dropped off, as you would imagine, in January and February, as it did in December, so I think some of that started to come back a little bit but until there's a better direction to the market or at least when the client and the adviser feel there's some floor under it, I think that we'll have slow activity. Once that occurs I think that'll start to pick up. More activity right now is going into the spread products. That has picked up and continues to come in that way.

Now I'm just going to take my shot at the DAC question and hopefully keep it really tight here. Before the quarter, my team and I, we were looking at Page 76 of the 10-K and it provided a hypothetical DAC impact if the equity markets declined roughly 10% which, you know, maybe we were in that ballpark in the quarter. And the sense was that you would see a $160 million DAC and DSIC amortization hit as a result of that, and most of it would happen in the quarter when we discussed that with management. So then when we went to the reconciliation page, there was only a $46 million negative hit. So part one of it is why the differential there from the guidance around DAC? I would think that would be fairly straightforward. That's the part one. The part two is this variable annuity rider issue that I think Colin was getting into. And in that same hypothetical, a 10% drop in the market, you would see a $58 million negative hit. Now you mentioned the effect of spreads widening. That was written in the release; it's what you've just touched on. And the benefit was, I think, per this reconciliation page, $54 million. So the question on the spread widening, where? Could you give a little color on exactly or isolate out where that widening is to be observed?

The widening in the market is being observed?

Yes. I mean, I didn't see such a widening from point to point.

Oh, okay. That one is easy because basically what we do is we use comps and basically we look at insurance comps that have basically holding companies and an insurance company and you look at the differentials. And during those differentials on that basis they widen and they widen substantially. Yeah, you basically look at basically, you know, holding company and the insurance operating company, you look at the spread differentials and then we basically extrapolate on that basis. We don't issue basically out of our insurance company. And that's the way we create the spread situation. And that is done based on a series of comps that we look at and those comps widened in the quarter, as you would imagine, and that becomes the basis on which we do the calculation.

Maybe later on I could take a look -

Yes, I think we could take you offline and take you through that.

One thing I would like to point out, Andrew, is that the numbers you're referring to in this 10-K are annual numbers.

Yes, but when we discussed with management, the indication was that maybe 90% of the number would flow through to the quarter. That was the feedback, unless I misinterpreted it. But I got the sense 90% of the numbers we see here should flow through into the quarter. I thought that was pretty clear, but we could follow up if you want.

Yes, I think you were to the point, this is just the equity decline and not the other factors you were talking about.

So the DAC number as well involves other variables, including that credit spread widening? Is that right?

No. The DAC is a straight on [inaudible] DAC. Like I said, you know, in the quarter we basically evaluated what dropped in the marketplace, the drop that took place in the quarter, and then we basically are spreading the near-term rates and we're spreading that drop over the next five years, which we use for our mean reversion.

Right, okay, so there were a number of other factors aside of that basic 10% hypothetical then?

And like I said, we can take offline, reconcile it and try and get you back to some good numbers.

Your next question comes from Suneet Kamath - Sanford Bernstein.

Maybe we can focus on the operating business a little bit. A question about the 200 experienced advisers that you recruited in the quarter. Can you give us a sense where they're coming from? Just describe maybe the companies that they left. And then, in other words, were they the large warehouses or more regional firms? And then any sense of how their productivity would compare to the advisers that you have? Are they employee adviser type or franchisee adviser? Just some general thoughts on that. And then separately, I think you talked a little bit about this but I'm not so sure that I have a clean sense. Just you talked about activity picking up in March relative to February and January, but can you give us a sense of how things have trended so far? I know it's still only a couple of weeks, but in April? Other companies that have reported first quarter results have talked a little bit about things maybe improving a little bit more in April. Are you seeing that yet or are your clients still pretty much on the sidelines?

Well, I think the first is on the recruiting end. It's coming from all the major houses - Merrill, UBS, Wachovia, Banc of America. So I think the talent is coming in from a number of different places, and we see the pipeline continue to be there. The productivity really is consistent with our overall productivity that we have in the house. It ranges in the type of advisers, from a few 100 to [break in audio] but mainly we're probably talking in the 300 to 500 range is where we're attracting people that sort of fit with the type of franchise and the type of offers we're making based on also the type of business they want to do, which is more planning and advice-based, fee-based business. And so we think that we're attracting a segment that really is appropriate for us. Regarding activity, I think we're seeing it a bit consistent with what we saw in March and a bit of a pickup but, again, it's not where we were back to old levels by any stretch of the imagination because, as you know, a lot of our business is not transaction business, it's fee-based business and therefore a lot is based on the asset levels there. And so people deploy money more to it over time; we don't get big increases immediately. Where we're seeing more transactions is, as I said, more in the fixed product right now. As we saw, variable annuities on the equity side have slowed down, but it's really growing in fixed. We did move good inflows back into the wrap products in the first quarter but, again, those aren't the type of inflows compared to what we used to have in the past. So I think on one end it's a positive; on the other end, we're not saying that it's off to the races at this point in time.

In your answer to my question you mentioned 300 to 500 something and I don't know what that something is. Can you just expand that.

In production, overall production, so looking at trailing 12-month production levels.

Your next question comes from Thomas Gallagher - Credit Suisse.

First, not to beat a dead horse here but back on the annuity segment, excluding the FAS 157 adjustment can you talk a little bit about how your hedge asset performed relative to the change in the variable annuity liability because obviously, based on the magnitude of 157, it's a little bit difficult to figure that out.

Actually, considering the volatility that took place because obviously if you just look at the two end points it doesn't look like the liabilities moved as much as they did, within that element, actually the hedges performed within our tolerances, which are in the 95% range. But, again, you have to take all the points between the beginning point and the end point. The hedges actually work reasonably effectively. Certainly, it's a big swing that took place, but we were comfortable with it.

So no big deviation, is that fair to say?

That is fair to say.

Just a follow up question on that. You know, one thing we've been hearing from our derivatives desk is the supply of long-dated hedges is effectively done right now, so just curious, how do you think about managing the risk on what's effectively a long-term option you're giving to the client when the ability to hedge it on the other side appears to be, if not gone, very difficult right now?

Well, you know, we've heard that also in working with our risk management people. We have not experienced that. We are still getting the ability to cover our hedging. Remember, the volumes are down and things of that nature on the variable annuities, substantially down, so it's easier and at this time we've slowed down the hedging. But we still continue to get hedges where we adjust our book and manage them.

And we continue to be very focused. We also made sure, you know, with the lower volumes activity, the change in price, but we also will be changing our product set over the next few months as well. So in the interim period we feel we could manage for the level of activity we have as well as the hedges that we already have on the books.

And then last question is just on your excess capital. I know you'd talked about having more than $1 billion. I presume that does not include the $500 million of hold co cash and if that's true can you just talk about what are your annual cash flow needs at the holding company? Is it substantially less than $500 million? Can you just remind us?

It is substantially less than the $500 million. Obviously, we have good dividend flow coming in from all the subs and our debt service is in the 150 range. So on that basis it is substantially below the 500 we have and we constantly replenish it though [dividend]. I didn't get the first portion of your question about the 500. Can you repeat that, I'm sorry.

The only question is should we consider then some portion of the $500 million as excess?

Yes, absolutely. When we go through our calculation, actually the majority of our excess capital is outside the insurance company, actually.

The majority is outside the insurance company?

That's correct.

Then I guess I'm having trouble reconciling that because you're talking about a 500% risk-based capital in the insurance subsidiary, which would imply effectively all of your excess capital is there. So you're saying you have $1 billion in addition to that?

No, I said majority. We use factor base on that and when we analyze on a factor-based situation there is excess in the insurance company, but not to the level that you would calculate using a cash flow tested basis. So we strictly use a factor base, which creates a lower capital environment, a lower excess position at the insurance. And we have our excess capital positioned at the holding company and we also have it at the other subsidiaries.

So just to make sure I'm clear, so the 500 RBC plus suggests you need to maintain something close to 500 just because you're saying -

No, no. Remember, you get into - that gets into cash flow test base. We are looking at it on a factor base and on a factor base we have excess, but it is not at the level that, you know, when you do your calculation. We translate it through on factor base.

I would just say this: We're not reconciling to $1 billion. There is more than $1 billion in capital. There is excess in the life company, there's excess at the holding company, and we also have money in the other subs.

I'd like to interrupt just with a response on the 10-K disclosures. I think this might help everybody in interpreting this number going forward. In our 10-K disclosures we do not increase our near-term equity rate assumption. So you're looking at a 10% drop over the full five years and not only do we not assume a [break in audio] but also that the equity markets stay flat for the next 12 months.

So it's extremely conservative.

Your next question comes from Sam Hoffman - Lincoln Square Capital Management.

Can you comment on your strategy to improve your investment performance in your equity mutual fund?

Yes. First of all, we have seen some nice improvements. As we said, first of all, Threadneedle is performing very well, very strong, and that's consistent. Our fixed income product have improved nicely and is actually performing quite well. We have improvement in some of our value area. The tech area [inaudible] have been strong. Some of their value and growth is still good. We are still weak in a few of our core products and we're focused on that right now and making adjustments to our portfolios and looking at also the positions for the longer term. So people are working at it, but it's not where we want it to be right now and we'll continue to look at how we can improve that and continue to look at some opportunities to complement what we have in place.

The second question is: Can you give a bit more color on the recruitment of experienced advisers in terms of how their contracts are structured and whether they become profitable in their first year or how that all kind of plays out?

Well, the experienced recruits, we only put a portion of their package upfront. Activity has to occur, they have to bring over assets, their productivity has to hit certain levels to get their greater amount of incentives. We have arranged this so that we have a very good return on investment here, but it doesn't necessarily give you a return in the first year because people are transitioning over, they're bringing their book, then they've got to get under way in activity. So we've clearly not set this up so that it is set that we have to earn money in the first year on it, but we've compared it to particularly novice recruitment, etc., and it gives us much better returns. So by just shifting our resources and commitment to this area we'll actually improve our return tremendously from where we used to be with novice recruitment and development, particularly in a market like this. So we think it's a win-win for us and we did set this up so that it's not all upfront where we would put much at risk. We think that what we put at risk versus what the transition and the adviser would need to do is very balanced.

And one final question, just to get back to the annuity segment. If equity markets remain flat for the foreseeable future, what impact would that have on earnings from variable annuities?

Remain flat from this point on?

Yes, I mean for a few years let's say. What would be the impact on earnings from variable annuities?

I can't give you the exact number. It would have a negative impact, obviously, because the assumptions are predicated on normal growth of the markets.

It would hit us through the DAC being [reversed]. That would assume that markets do grow because you're tied to the equity markets, so if they didn't grow we would have to take another DAC reversion hit.

Right. And so when you go through your initial period, obviously one thing, but you get to your long-term rate, which is assuming 9% growth on equity markets - actually it's less dividends. So it would have a big impact, yes.

There's no way you can help us in terms of kind of tying it to what's happened in the last few quarters?

Well, the impact that you saw in the fourth quarter was substantial and in this quarter it certainly was impacted. Again, we're amortizing the decrease that took place in the quarter over five years until we get to our long-term rate, which is the 9. But again, as we indicated, we've got an offset as relates to the credit default swaps widening out, so the net impact was actually -

I mean, if you're talking this year, we assumed that this year wouldn't be a strong market, it would become flat or relatively weak in that sense, but we didn't necessarily assume that for the next five years the markets would be flat.

Yes, because what we assumed, it would be a slower recovery in this year and then as we moved away from the bottom [inaudible] you would have a spike, which we've seen in prior patterns, and that's what it was predicated on.

It's just hard for us to calculate, but we'll do our best.

It's hard for us to calculate.

The actuaries work on this all the time.

I'm not trying to be cute. It would have a devastating impact because really, it depends on market increases and what we're doing, we're adjusting our models now to reflect - and that's when you get different aspects of the business performing, in those situations. But in variable annuities it does depend on the markets appreciating and that's what estimated gross profits are based on.

Operator, we have time for one more question.

Your last question comes from Eric Berg - Barclays Capital.

I have a couple. I'll keep it to the two to give people a chance to get home in this evening hour here and I'll finish up with Laura separately. So I see that the number of branded financial advisers has increased by roughly 5% year-over-year to 10,550 from 10,000, but how do we see - maybe it's because I don't have your slides in front of me, just your news release and statistical supplement - can we see in your financial supplement how the quality of your sales force has improved? Because this talks to me only the numbers of people. The net sales actually went down, no surprise there, reflecting the market. Can we see in the supplement how the quality of these people has improved? That's my first question.

I'd say, Eric, I don't know how you would see that. First of all, you've got a number of variables being that you're in very weak markets compared to a year ago. And as you know, the fourth quarter and first quarter are weak and I think you'll find that across the industry. Second of all, if people are just coming onboard now they're not even producing yet, they're just joining the firm. So at the end of the day they're bringing over their assets, their [inaudible] and etc. You're not going to see productivity, particularly across a sales force of 10,000 from 200 people joining. So I think you've got to factor that all in, but what I would say is the way to think about it is this: In the past we brought on novices and novices had no book. It would take them months and even years to book that matured to a level of assets and productivity. And in this case we'll have people transfer in, those people clearly will be productive within weeks, they will bring their book over and that book over time will be up to more of an ongoing status of what our experienced people are doing. Therefore, as you look at that versus in the past and our numbers were a lot more novices not producing any, our averages will go up. And particularly you'll see them go up in our employee network first, but then overall, as they add more, depending on how many we bring in. So I do believe that it's not so much in the number of advisers, because we're bringing down the number of novices, which will save us money and cost and expense, but the people we are bringing onboard, even though the numbers may not be higher in total, but the numbers of experienced people that really have books of business can be productive very quickly. And so if you take that out a year or two and production comes back, meaning markets improve, it will give us a lot more leverage.

My second question deals with the annuity business and its sufficiently detailed, but I'm going to work with Laura on it, so why don't I cede back to you. Thank you.

Okay, that's as much time as we have tonight. I want to thank you for listening in and for your questions. Laura will be able to take any more of your questions tonight and tomorrow so that you can update your models with information. As I said, I do feel that we had a good relative quarter based on the market conditions. We think that we are managing the business prudently. We think we're managing it conservatively. We think that our financial position remains strong and gives us some degree of freedom as we move forward to take advantage of the opportunities that may be there. And so I would just say after the first quarter, which none of us like the environment, I still feel quite good about our position to navigate it and to deal with the things at hand. So I appreciate your time and thank you very much for listening.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may all disconnect.