Good morning, ladies and gentlemen, welcome to the Genworth Financial's First Quarter 2016 Earnings Conference Call. My name is Jim, and I'll be your coordinator today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer towards the end of the conference call. As a reminder, the conference is being recorded for replay purpose. Also, we ask that you refrain from using cell phones, speaker phones or headsets during the Q&A portion of today's call. I would now like to turn the presentation over to David Rosenbaum, Head of Investor Relations. Mr. Rosenbaum, you may proceed.

Thank you, operator. Good morning, everyone, and thank you for joining Genworth's first quarter 2016 earnings call. Our press release and financial supplement were released last night, and this morning our earnings presentation was posted to our website, and will be referenced during our call. We encourage you to review all of these materials. Today, you will hear from our President and Chief Executive Officer, Tom McInerney; followed by Kelly Groh, our Chief Financial Officer. Following our prepared comments, we will open the call up for a question-and-answer period. In addition to our speakers, Kevin Schneider, Chief Operating Officer and Dan Sheehan, Chief Investment Officer will be available to take your questions. During the call this morning, we may make various forward-looking statements. Our actual results may differ materially from such statements. We advise you to read the cautionary notes regarding forward-looking statements in our earnings release and related presentation, as well as the risk factors of our most recent Annual Report on Form10-K as filed with the SEC. This morning's discussion also includes non-GAAP financial measures that we believe may be meaningful to investors. In our financial supplement, earnings release and investor materials, non-GAAP measures have been reconciled to GAAP, where required in accordance with SEC rules. Also, when we talk about the results of our international businesses, please note that all percentage changes exclude the impact of foreign exchange. And finally, references to statutory results are estimates, due to the timing of the filing of the statutory statements. And now I'll turn the call over to our CEO, Tom McInerney. Thomas J. McInerney - President, Chief Executive Officer & Director: Thank you, David, and good morning, everyone. This morning, I will provide some perspectives on four areas. First, our first quarter 2016 financial results. Second, how we're working…

We will take our first question from Michael Kovac, Goldman Sachs. Michael Kovac - Goldman Sachs & Co.: Great. Thanks for taking the question. Tom, I wanted to follow up on some comments that you made in the prepared remarks, specifically around ultimately separating the Mortgage business from the U.S. Life Insurance business. I believe I heard that correctly, I just wanted to hear kind of your thoughts on what is core, in terms of International MIs, U.S. MIs, and kind of the remaining Life companies. Thomas J. McInerney - President, Chief Executive Officer & Director: Thanks for the question, Michael. And we have been saying for a period of time that our ultimate goal is to separate the Mortgage Insurance businesses from our U.S. Life division, and we think, the unstacking plan that we're pursuing really sets the basis for that. And on going forward, clearly from an MI perspective, U.S. MI, we think is one of our strongest businesses. We have said that in regards to Australia to the extent that there are opportunities to sell-down and it make sense, we would look to do that. I think, you've seen in the announcement that we made, and that GMA made that, there's significant opportunity for capital management in GMA. And so, for now, given the proceeds, we could receive if we sold shares versus the dividend and capital management capacity, we think that's – the better options to stick with our 52%, and take our share of the capital management that GMA is able to do. Michael Kovac - Goldman Sachs & Co.: Thanks. That's helpful. And then if I could, following-up on some of the conversations, you mentioned that you're having with regulators, have you submitted a plan to them or that sounds likes that's maybe in…

Moving on, we'll take our next question from Sean Dargan from Macquarie. Sean Dargan - Macquarie Capital (USA), Inc.: Thank you, and good morning. I just want to follow-up on Michael's question, because something that I've struggled with is, why would GLIC's primary regulator Delaware essentially allow for that entity's call on GLAIC's capital to no longer be there. And Tom, would it be a correct characterization to say that, perhaps the Delaware regulator understands the constraints that the holding company is facing. And net-net, perhaps the policyholders for which that body is responsible for, would be better off in an unstacking? Thomas J. McInerney - President, Chief Executive Officer & Director: Well, I would say, Sean, certainly all the operating subsidiary regulators understand that the parent has a heavy debt load, $4 billion of debt. And that we need dividends from the operating subsidiaries to service the interest and principal payments. So, all of the regulators – the last thing they want is a problem at the holding company to create an issue for all of Genworth, and then ultimately that puts the pressure on the operating subsidiary in terms of how you deal that, if there's a problem at the holding company. So, I do think, one, we have very constructive relationships with all four regulators. I think, we've done a good job over the years of being very clear with them as to what our challenges are. And I think, in the end, the regulators want Genworth to succeed, particularly Delaware which oversees GLIC, which has most of the LTC. They want us to remain and lead the private LTC business. They understand that we or no – no owner of the business will continue to put capital in LTC without getting the actuarially justified rate increases.…

Moving on, we'll take our next question from Ryan Krueger from KBW. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Hey, thanks. Good morning. First question was, what is the DAC balance that's backing the single premium annuity block, where you mentioned the margin is low? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Yeah. The DAC balance is roughly about (sic) $60 million [$16 million] (44:47). Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. Kelly L. Groh - Chief Financial Officer & Executive Vice President: I'm sorry, $16 million, I misstated that. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. So, is $16 million the risk we should think about, or is there also potential for reserve addition? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Really, the way it works is, you would first write-off your DAC and then you would set up reserves. But to give you an idea on sensitivities, we did include some sensitivities in the 10-K and we're planning on doing it in the 10-Q this quarter as well. So if rates overall from obviously a very low basis that we have right now, decreased about 50 basis points, it would have about a $27 million impact in total on the margin. So a small charge. We're not looking at huge numbers, but we've included some sensitivities there for your help. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Got it. Thanks. And then I think you said full-year Long Term Care earnings up modestly from 2015. And I guess so am I thinking about it right that that implies roughly flat or roughly breakeven earnings for the rest of year? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Ryan, there's going to…

Moving on, we'll take our next question from Suneet Kamath from UBS.

Thanks. Good morning. I wanted to follow up, if I could, on Sean's question and specifically, Tom, your answer to Sean's question. So if there's a problem with the holding company, I guess I'm trying to figure out what issues does that create for regulated life insurance entities that have RBC ratios that are well above regulatory minimums? Thomas J. McInerney - President, Chief Executive Officer & Director: First of all, I want to say I think we're working very constructively with the regulators and we're working towards the unstacking. If there's an issue with the parent holding company, then it could be the case that the regulators would have to step in and take over the operating subsidiaries. And I will say that I mentioned a little bit the Penn Treaty situation in my prepared remarks, Penn Treaty, that insolvency was created because they didn't get premium increases. And it's a big issue. They have 100,000 policyholders; we have 1.2 million. And the assumption in terms of discussions, because the state guarantee funds and, therefore, insurers are going to have to make that whole, is it could be several billion. So I do think that another big advantage of the unstacking is that by having all of the LTC business in GLIC, it allows both Delaware as well as all the other 49 states to clearly see the results and I think it makes it easier for them to give the actuarially justified premium increases. And we've been very clear with all the regulators that, given the issues we have with liquidity and capital and given where the high-yield market and where our spreads are, it's very unlikely without progress in LTC that we can refinance the debt. And we need more than two subsidiaries to pay the debt service. And so, again I think that they would like us to be able to manage the debt and the P&I at the holding company and they know that we can't keep going with no dividends from any of the Life subsidiaries.

Okay. I get that. But I guess I always thought about risk-based capital as the minimum capital that a subsidiary needs to satisfy all of its obligations. And based on your disclosures, it seems like your Life entities are all well above what those minimums are. So I guess I still struggle with why they would be so concerned with the holding company. Thomas J. McInerney - President, Chief Executive Officer & Director: They're concerned about the holding company because the holding company, if we can't pay principle and interest then there's an insolvency and that puts pressure then on the operating subsidiaries. And while it's true that GLAIC is very well capitalized and GLIC and GLICNY are well capitalized, they know that without future premium increases, the RBC of GLIC is not enough to meet the claim obligations of the future.

Okay. And then just a couple others on the holding company cash. I guess in the first quarter, the net other items was a negative $71 million. And I thought, Kelly, on the last call, you said the target for the full year was a negative $70 million. So is that target still reasonable? And then should we expect this net other items line item will be breakeven for the rest of the year? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Suneet, I guess the way I would think about it is, there were two, what I would call extraordinary items that occurred in the first quarter that wouldn't be part of our normal run rate. Obviously, we talked about the TMA payment or Tax Matters Agreement payment to GE is a part of our original IPO that will be ongoing. The LTC class-action lawsuit litigation settlement was not part of that overall $70 million estimate that won't be reimbursed from our subsidiary companies. The bond consents also were a holding company obligation, that were not in that forecast as well. While we do have ongoing litigation, and there could be some legal expenses associated with that, that come throughout the year, I would hope that would be within our overall holding company expense levels. So, really taxes for the rest of the year we anticipate to be positive to offset some of the first quarter tax payments, but in terms of expenses, I would anticipate it being a much lower level unless there was some other type of extraordinary item like class-action lawsuit settlement.

Okay. And just the last one on holding company cash is, given we're all so focused on this. What was the rationale for terminating the credit facility, and is there's some holding company cash savings that result from that? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Yeah, the rationale was really – the facility is expiring in September. We had no plans on drawing on it between now and then, just given our overall liquidity needs. We pay about 62 basis points in fees on an annual basis related to a $300 million facility that we weren't planning on drawing on. And frankly from an administrative perspective, over the next two quarters, there's activities that go on within the company, probably 40 hours, 50 hours of work to just verify compliance with that. And so, at this point in time, we just really didn't see a need for it, and it had really no impact on our ratings given the short maturity.

All right. Thanks.

Moving on, we'll take our next question from Steven Schwartz from Raymond James & Associates. Steven D. Schwartz - Raymond James & Associates, Inc.: Hey, good morning everybody. First a couple of follow-ups. Kelly, the discussion of the SPIA margin, I'm taking away from your discussion with Ryan that this discussion was GAAP; is there any STAT to think about? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Not at this time. We have adequate cash flow testing margins based on what we're looking at. From a statutory perspective, we aggregate all our products within the GLIC entities. So, as long as we've got margin overall, we're comfortable with it from a STAT perspective that is really a GAAP impact only. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. And then a follow-up again, just to make sure, here the LTC guidance that you're – that you've given is on a post-reserve release basis, I guess is the way to put it? Kelly L. Groh - Chief Financial Officer & Executive Vice President: I'm not quite sure exactly what you mean by that, but I guess from a GAAP income perspective, that's the guidance I was giving. We are not anticipate – or we're not assuming any assumption updates or anything like that, obviously we would keep you informed if something like that came up. Steven D. Schwartz - Raymond James & Associates, Inc.: No. What I was suggesting was, for example, you had the $77 million benefit in this quarter, this would include benefits for unreserveds going forward? Kelly L. Groh - Chief Financial Officer & Executive Vice President: It does include the benefit of... Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. All right. Kelly L. Groh - Chief Financial Officer & Executive Vice President: ...any reduced benefit option reserve impacts going forward. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. And then just two new ones; did the BLAIC UL repatriation affect RBC at all in the quarter? Kelly L. Groh - Chief Financial Officer & Executive Vice President: It did not – affect it in the quarter, it actually was done in April. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. Kelly L. Groh - Chief Financial Officer & Executive Vice President: And we wouldn't anticipate that to have a significant impact on RBC, maybe two points or so. Steven D. Schwartz - Raymond James & Associates, Inc.: Okay. And then one more; we'll see this in the 10-K, but until it's out, how much of the 2018 debt did you buyback in the quarter? Kelly L. Groh - Chief Financial Officer & Executive Vice President: We bought back $1 million. Steven D. Schwartz - Raymond James & Associates, Inc.: $1 million. Okay. So, just little bit. All right. Thank you very much, Kelly.

Ladies and gentlemen, we have time for one final question, that will come from Jimmy Bhullar from JPMorgan.

Hi, good morning. So, some of my questions were asked, but just on the U.S. MI business, can you discuss, what your views are on when you can actually start taking dividends out of that, and how that ramps up over time? Kevin D. Schneider - Executive Vice President & Chief Operating Officer: Yeah, Jimmy, this is Kevin. As I mentioned to one of the other questioners, our view is, it'll be in 2017 or later. Just to size it initially, I think something in the $50 million type range. It will require extraordinary dividend approval by the regulator, but we think, we have a good case for that discussion and that request from the regulator. And then think about it ramping up over time as our statutory income continues to grow over time, and we continue to strengthen our balance sheet.

And then just on the Long Term Care business, like if we are in this type of rate environment through the end of the year assuming no changes in claims patterns, do you expect to have to add to STAT or to GAAP reserves? Kelly L. Groh - Chief Financial Officer & Executive Vice President: Right now, given our GAAP margin of $2.5 billion to $3 billion, if we did anticipate that just given the rates, we would have actually evaluated it and taken a charge this quarter, we don't anticipate that at this time based on the rate environment, but we'll continue to look at it, and monitor our experience as we go through the year.

And then just lastly on investment income, it seems like you had high prepayment income in the Life business, but overall, as well. Can you quantify, what prepayment income was relative to normal, what you've seen like an average over the last few quarters? Kelly L. Groh - Chief Financial Officer & Executive Vice President: I'd be happy to. Really to tell you the amount in the quarter, in the Life Insurance segment, it was about $6 million after-tax, which was to be clear on the phone, it was a prepayment speed adjustment related to our residential mortgage-backed securities. So, for Life it was $6 million; for Long Term Care it was about a $3 million benefit; and for Annuities about $1 million; so $10 million in total.

Okay. Thank you.

Ladies and gentlemen, I'll now turn the call back over to Mr. McInerney for closing comments. Thomas J. McInerney - President, Chief Executive Officer & Director: Thank you, Jim, and thanks to all of you for your time and questions, today. Just to sum up, we're pleased with the continued strong performance of our MI businesses, and the improved results in U.S. Life Insurance during the quarter. As we've said, we've made progress on our as U.S. Life Insurance Restructuring Plan. We are proactively reducing debt, and we believe with the bond consent, we enhanced our strategic and financial flexibility. We remain focused on rebuilding shareholder value, and I want to thank you again for your continued interest in Genworth.

Ladies and gentlemen, this concludes Genworth Financial's first quarter earnings conference call. Thank you for your participation.