Good morning, ladies and gentlemen. My name is Stephanie and I will be your conference operator today. At this time, I would like to welcome everyone to the Horace Mann Educators Corporation fourth quarter conference call. (Operator instructions). I would now like to turn the call over to Dwayne Hallman, Senior Vice President of Finance. Please go ahead, sir.

Thank you. And good morning, everyone, and welcome to our fourth quarter and year-end 2008 earnings conference call. Yesterday after the market closed, we released our earnings report including financial statements, as well as supplemental business segment information. If you need a copy of the release, it is available on our website under Investor Relations. Today we will cover our results for the fourth quarter and year-end in our prepared remarks. The following management members will make presentations today, and as usual, we'll be available for questions later in the conference call, Lou Lower, President and Chief Executive Officer; Pete Heckman, Executive Vice President and Chief Financial Officer; Tom Wilkinson, Executive Vice President of Property and Casualty; and Steve Cardinal, Executive Vice President of Marketing. The following discussion contains forward-looking statements regarding Horace Mann and its anticipated or expected results from operations for 2008 or subsequent period. Our actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements were made based on management’s current expectations and beliefs as of the date and time of this call. For discussions of the risk and uncertainties that could affect actual results, please refer to the company’s public filings with the SEC and in the earnings press release issued yesterday. We undertake no obligation to publicly update or revise such forward-looking statements to reflect the actual results or changes, assumptions, or other factors that could affect these statements. Since this is year-end, we'd like to remind everyone that the company's financial statements are subject to an annual audit process that will not be considered complete until the filing of the company's 10-K. While some audit procedures are not yet complete, management does not anticipate any material changes to the earnings report being discussed today. Finally, this call is being recorded and is available live on our website. An Internet replay will be available on our website until March 5, 2009. Now I'll turn the call over to Lou Lower for his comments.

Thank you, Dwayne. Good morning, everyone and welcome to our call. Yesterday we reported fourth quarter net income before realized capital gains and losses of $0.51 a share. Despite the tax rate costs for the year of $74 million, the second worse in our history, we did close out the full year at $1.29 per share. For both the quarter and year, final results exceeded our revised guidance as well as consensus. While clearly not a year that we'd like to repeat, it did demonstrate large profitability to absorb the one-two punch that 2008 delivered to us and the industry in the form of significant catastrophes and a meltdown of the financial markets. All in all, we feel very good about the underlying fundamentals of profitability our operations and resiliency and strength of our balance sheet. Most importantly, despite the very difficult economic climate anticipated in 2009, we believe that the nature and characteristics of our target market will not only benefit us, but allow us to continue to move forward with continuing and greater success in the transformation of our distribution system. I'm not suggesting that we'll be immune to recessionary courses, just that our market did show characteristics that will serve to mitigate the impact of some of the broad environmental forces at work. Looking first at our balance sheet and financial strength, you'll note that absent the third quarter headlines of Freddie, Fannie, Lehman, and AIG, realized losses were significantly less sequentially as we had anticipated. Just to iterate what we communicated during our last call, the meaningful increase in our unrealized position over the course of last year was overwhelmingly resolved, a frozen credit markets where spreads and entices have become disconnected from rational valuation. After conducting a thorough analysis, along with our institutional investment advisors…

Thanks, Lou. I would like to provide some commentary this morning on Horace Mann's investment results and portfolio, our capital and liquidity position, the 2008 operating results, and our 2009 earnings guidance. But before I get into the details, let me first summarize by saying that our investment portfolio, capital levels and ratios, and liquidity position remain strong and in good shape, despite the persistent uncertainty and volatility in the financial market. Our underlying operating results continue to be solid with 2008 operating income finishing the year above the top end of our guidance range, which will provide a strong foundation to build upon in 2009. So turning first to our investment results, the performance of our $3.5 billion investment portfolio remains strong, with an overall quality rating of AA and is well diversified across industries, investment types, and individual issuers. That being said, our portfolio is certainly not immune from both realized and unrealized investment losses. Pre-tax net realized capital losses were 8.2 million for the fourth quarter, included in this amount was 5.8 million of incumbent write-downs on securities, which we continue to hold, but determined to have had other than temporary declines in market value as of quarter end. Of that amount, approximately 2.2 million relates to impairments for which the issuer's ability to pay future interest and principle based upon contractural terms has been compromised, including Lehman Brothers, Fannie Mae and Freddie Mac, which we initially impaired last quarter. The remaining 3.6 million relates to impairments of primarily high yield bonds and preferred stock, where we no longer have the intent to hold the security for a period time necessary to recover a substantial portion of the decline in value. We also realized 4.6 million of losses on impaired securities that we’ve sold during the quarter,…

Thanks, Pete, and good morning. This morning I'll discuss what's behind our combined ratio for the quarter and the full year, cover results by line, review trends in our book of business and finally, take a look at the year ahead. Starting with the combined ratio, the combined ratio for the quarter increased one point from the fourth quarter 2007 (inaudible) of 92.9%. Total catastrophe costs were almost $10 million in the quarter, with $7 million due to additional development and new estimates for the two third quarter hurricanes, Gustav and Ike. The total cat-cost contributed three points more to the combined ratio than prior year cat-costs. On the other hand, favorable prior year reserve re-estimates of $6.7 million were a point better than a year ago. So when you exclude cats and prior year activity, we posted an underlying combined ratio of 90.5%, which was a point better than last year. Looking at the full year, a combined ratio of 100.7% was 8.8 points above 2007 combined. The cat-serving net cost of $74 million, the second highest year in our history, equal a 13.7% of premium, up 9.3 points over last year. Favorable prior year reserve re-estimates of $18 million were less than prior year, contributing a slight combined ratio increase of 0.4% of a point. Our year-to-date underlying accident year combined ration ex-cat was 90.3%, about a point below prior year. And we had a favorable expense ratio variance of 0.7% of a point, and an underlying loss ratio about equal with prior year. Moving on to results by line, the auto accident year combined ratio excluding cats was 97.3% for the quarter, 3.8 points below prior year. Recorded frequency was, once again, lower than prior year, favorably impacted by the continued decrease in miles driven, but not…

Thanks, Tom. Total annuity sales were down 11% in the fourth quarter, compared to prior year, and down 9% for the full year. However, 2008 annuity sales exceeded our expectations and those prior year comparisons masked what I think is a pretty positive picture in this line of business, especially as far as our Horace Mann agents are concerned. As we expected, the IRS 403(b) transition rules had a negative impact throughout the year on single premium and rollover deposits due to interim restrictions on participate fund transfers, which resulted in total single premium sales being down 11% for both the quarter and year. Our independent agent channel, which accounts for only about 10% of our annuity sales, was impacted more significantly. However, Horace Mann agents' sales, in our core flexible premium business remained comparable to prior year in 2008, in spite of the 403(b) transition and difficult economic environment. Furthermore, our agent sales of new flexible premium contracts purchased primarily by new Horace Mann annuity customers increased more than 8% during the year, a very positive results as far as market penetration is concerned. As we discussed on previous calls, the new IRS regulations generally became effective on January 1st of this year and 2008 was clearly a transition year in the marketplace. Over the last 18 to 24 month, we deployed a variety of strategies to solidify our position and grow our business. We implemented numerous contact programs with our schools, including direct mail campaigns and distribution of compliance kits and established a website to facilitate information exchange. We also supplemented our agents' training so they could provide a high level of consultative support to school administrators. At this point in the process we've heard from virtually all of the more than 5,000 school districts where Horace Mann…

Thanks, Steve and good morning. I'd like to start by saying that I'm excited about the opportunity I have with the Horace Mann franchise and I'm equally excited to be working in an attractive market niche with a great team. With that said, I'll focus and balance my comments in three areas the status of the agency business model, or AMB, the agency force, exclusive agent agreement, and sales results in both the quarter and the year. So I'll start with the AMB. It was reported in the past and I'll continue to expand the four agents (inaudible) wrapped in the value of the concept and working from an outside office which is full house and most importantly licensed for research for transforming the operation, the AMB agents have become productive and our average clear rates are more productive than the home based agents. The entrapments of this model is evident in the percent of agents conducting business in outside offices, which grew in 2008 to nearly 75% from 60% of the total agency force. Conversely home based figures decrease by 40% with a majority of determination from 62% while (inaudible). There's more evidence our agency force is changing. The number of agents who are working in outside offices would like to producers group from less than 200 over 300 during 2008. The majority of these agents in these outside offices have attended our agency business school. ADF you'll recall updated focused and recognize industry best practices that help in other businesses in announcing office. As a result of that, their dedication is absent as well as we've seen in a number of license producers continue to grow. Licensed producers grew at 394 from 350 in the quarter. Although we've had a number of positive results the agents have declined…

Thank you, Steve. That concludes our prepared remarks. Obviously, we expand our remarks considerably but believe it is certainly prudent in the current environment. So, operator, if we could please move to the question and answer session.

Thank you. (Operator instructions).

At this time, you have no audio questions. I'm sorry you do have an audio question from the line of Robert Rodriguez of First Pacific Advisors. Robert Rodriguez – First Pacific Advisors: Good morning. Really I appreciate the details on the balance sheet disclosures that you had but could you go in a little bit more on some aspects. In terms of your commercial mortgage back securities, as to the types of securities those maybe or whether they are strip centers, or any detail that you can go into that? And secondly, in terms of your financial institution investments whether you could describe a little bit more about what's gone into both the preferred as well as the corporate bonds?

Yes, Bob, this Pete Heckman. Our CMBS our primarily conduit fusion securities certainly in excess of half of those with really minimal exposure to any single borrowers (inaudible) issues. The detail we provided on page 6 of the exhibit kind of lays that out by rating and by vintage year. We have some sell powers, some military housing, which are all AA and above, but again most of them are concentrated in the conduit fusion category. With regard to financial institutions again as you see in total on page 6 that portfolio is about I think 7% or so of our total holdings. And it's certainly still under stress although it's improved somewhat on the corporate bond side in the fourth quarter. We've got about a $60 million of financial institutions preferred stocks to a variety of holding including some European firms, but again feel as though with the broad U.S. and international support for financial institutions, including the TARP program and the like that, given the solid names that we posses in our portfolio that we are in good shape at this point. Robert Rodriguez – First Pacific Advisors: Okay, in terms of TNBS beyond sell towers, are these in residential – I should say into condominiums, commercial strips, or anything like – can you give any detail there?

Hi, this is Dwayne Hallman. Overall there is no significant concentration in any one class. Obviously we do have some retail exposure, some office tower exposure, but as far as condominiums type projects very limited exposure. Robert Rodriguez – First Pacific Advisors: Just FYI just for you, it's one of the areas that I have highlighted since seems like there's not that many people on the call. It's one of the areas I have highlighted for 2009. It's going to hit the financial institutions fairly severely. And on the financial institutions, security investments area, if I was that (inaudible) then bank index would not be setting an all time low today. So I just continue to caution as I have mentioned before in prior calls. Okay, thank you very much.

Thanks, Bob.

(Operator Instructions)

Operator?

Yes sir.

This is Dwayne Hallman. Sounds like we don’t have another caller at this time but we certainly appreciate everyone that participating and listening in and if you have any follow up questions, please feel free to give me a call. Have a good day everyone.

This concludes today's conference call. You may now disconnect.