Edward A. Spehar - Head of Investor Relations Steven A. Kandarian - Chairman, Chief Executive Officer, President and Chairman of Executive Committee John C. R. Hele - Chief Financial Officer and Executive Vice President William J. Wheeler - President of The Americas Christopher Townsend - Head of Asia Region

Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division A. Mark Finkelstein - Evercore Partners Inc., Research Division Ryan Krueger - Dowling & Partners Securities, LLC Suneet L. Kamath - UBS Investment Bank, Research Division Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division Thomas G. Gallagher - Crédit Suisse AG, Research Division John M. Nadel - Sterne Agee & Leach Inc., Research Division Christopher Giovanni - Goldman Sachs Group Inc., Research Division Sean Dargan - Macquarie Research John A. Hall - Wells Fargo Securities, LLC, Research Division Eric N. Berg - RBC Capital Markets, LLC, Research Division Steven D. Schwartz - Raymond James & Associates, Inc., Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter 2012 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Before we get started, I would like to read the following statement on behalf of MetLife. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of the federal securities laws, including statements relating to trends in the company's operations and financial results and the business and the products of the company and its subsidiaries. MetLife's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties, including those described from time to time in MetLife's filings with the U.S. Securities and Exchange Commission. MetLife specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. With that, I would like to turn the call over to Mr. Ed Spehar, Head of Investor Relations.

Thank you, John, and good morning, everyone. Welcome to MetLife's Fourth Quarter 2012 Earnings Call. We will be discussing certain financial measures not based on Generally Accepted Accounting Principles, or so-called non-GAAP measures. Reconciliations of these non-GAAP measures and related definitions to the most directly comparable GAAP measures may be found on the Investor Relations portion of metlife.com, in our earnings press release and our quarterly financial supplements. A reconciliation of forward-looking financial information to the most directly comparable GAAP measure is not accessible because MetLife believes it's not possible to provide a reliable forecast of net investment and net derivative gains and losses, which can fluctuate from period to period and may have a significant impact on GAAP net income. Now joining me this morning on the call are Steve Kandarian, Chairman, President and Chief Executive Officer; and John Hele, Chief Financial Officer. After their prepared remarks, we will take your questions. Also here with us today to participate in the discussions are other members of management, including Bill Wheeler, President of Americas; Steve Goulart, Chief Investment Officer; Michel Khalaf, President of EMEA; and Chris Townsend, President of Asia. Before we begin, I'd like to highlight that we will be including additional disclosures in our 2012 10-K on our variable annuity business and the sensitivity of earnings to a sustained low interest rate environment. With that, I'd like to turn the call over to Steve.

Thank you, Ed, and good morning, everyone. We are pleased to report fourth quarter 2012 operating earnings of $1.4 billion, up 10% over the fourth quarter of 2011. Operating earnings per share were $1.25, above the guidance range of $1.12 to $1.22 provided on the December 2012 guidance call, and 7% over the fourth quarter of 2011. For the full year 2012, we reported operating earnings per share of $5.28, up 21% (sic) [22%] from 2011, and an operating return on equity of 11.3%. We are very pleased with these results given the challenging macroeconomic environment. John Hele will discuss our financial results in detail. I would like to highlight a few items. First, despite growing pressure in the U.S. from low interest rates, our investment spread margins were up in 3 of our 4 U.S. business lines. The strength of our investment spread margins reflects our prudent asset liability management and the benefits of our interest rate hedge program. We continue to manage the risks of low interest rates and take actions as appropriate. Second, we continue to execute on the strategy that we outlined at our May Investor Day. One of our cornerstone initiatives is to refocus the U.S. Business, which includes shifting our business mix away from market-sensitive, capital-intensive products to our protection-oriented, lower-risk products. On February 4, we introduced a new living benefit variable annuity product, GMIB Max V, to replace GMIB Max IV, which is no longer being sold. The biggest change between the 2 products is a reduction in the rollup rate from 5% to 4%. We believe that the new product will improve the risk profile of our VA sales and generate a higher expected return on economic capital. These changes are important components of our plan to reduce U.S. variable annuity sales…

Thank you, Steve, and good morning, everyone. Today, I'll cover our fourth quarter results, including a discussion on insurance margins, investment spreads, expenses and business highlights. I'll give you some color on the interest rate disclosure Ed referenced and then conclude with some comments on our cash and capital. To begin, MetLife reported operating earnings of $1.4 billion or $1.25 per share, up 10% over the fourth quarter of 2011. This quarter included a few notable items, which I highlighted during the -- our December guidance call. These 4 items dampened operating earnings by a net $13 million or $0.01 per share, better than the net $0.07 estimated in December. Let me give you some detail on the 4 items. The first was in our P&C business. Higher-than-budgeted catastrophe losses of $70 million after tax, primarily due to Superstorm Sandy, were partially offset by a favorable prior year reserve development of $13 million after tax. The net impact was $0.05 per share. The gross loss due to Sandy was approximately $150 million. Adjusting for reinsurance recoveries and taxes, the impact to operating earnings was $90 million. Both the gross and net loss were within the estimated ranges provided in December. The second notable item resulted from our annual assumption review. The portion related to operating earnings was a net unfavorable $13 million after tax, or $0.01 per share. In December, we'd estimated the assumption review would reduce operating earnings by $0.05 per share. We had a net positive of $37 million from DAC unlocking and reserve changes. The favorable unlocking related to our lower lapse assumption for VA was partially offset by negative unlocking for reductions in our general account and separate account return assumptions. Also included is a onetime $50 million after-tax write-down in Group, Voluntary & Worksite Benefits…

[Operator Instructions] And first, from the line of Jeff Schuman with KBW. Jeffrey R. Schuman - Keefe, Bruyette, & Woods, Inc., Research Division: I just wonder if you can give a little bit more color about the international growth outlook. If we look at the fourth quarter or 2012 as a whole, I think Latin America premium growth was pretty modest relative to your normalized expectations, and yet I think you forecasted pretty big acceleration in 2013. I just wonder if you can remind us why that is. And I guess, if you could touch on Asia a little bit. But even before the recent devaluation, your outlook there was, I think, for premium growth to decelerate quite significantly relative to what we've seen recently. And so maybe you can remind us kind of what the factors are there, please.

Jeff, it's Bill Wheeler. I'll talk about Latin America. The -- so revenue growth on a constant currency basis was about 4%. We are forecasting, I guess, on a constant currency basis too, 10% for next year. We had very good sales volumes. Our sales volumes in Latin America were up to 26% year-over-year. What held back the overall PFO growth rate was there's a couple of group cases that we have lost, one in Mexico, one in Chile, that are large. They weren't terribly profitable. And so that's affected our top line growth. Now we've -- I think we've said this before on other calls, especially in the third quarter, the comparison, especially the one in Mexico, we lost at the beginning of this year. So that comparison will go away next year. And Latin America, except for noise like these group cases, is I think more like a 10% grower.

And with regard to Asia -- this is John. With -- our bank channel was down, which has a large premium -- these are joint [ph] single premium products, so it's quite an impact when you look at the premiums. But we're seeing growth in the independent agency channels and other areas across Asia. So we're pleased that we're remaining disciplined as we grow all of our channels.

Our next question is from Mark Finkelstein with Evercore Partners.

Just a couple of questions on Provida. Should we assume that the 70% of GAAP earnings, which I think you characterized as $200 million, would you expect that to be fully dividended to the holding company?

We expect that to be a good distribution. It may go to the international holding companies because it's in the international operations, but we expect that to be available.

Okay. And then just a few quick questions. The -- I think you characterized the returns on this as at least equal to your weighted average cost of capital. I mean, how should we think about the IRRs on this trade? I mean, I would assume it would be above your weighted average cost of capital. Should we look at this, given growth, et cetera, as low-teens, mid-teens, high-teens? How did you -- what's the IRR that you're projecting on this?

We're looking at this as a mid-teen return. And we think, given -- that's a good return given the Chilean economy and environment. It's one of the best places to be investing in, if you call it an emerging market. It's a very stable government and economy. So we're very pleased with that type of return.

Okay. And then maybe just -- I guess, just going back to the comment about -- that Steve made on buybacks and an impact going out to 2016 if there were 0 buybacks. Obviously, the difference between 0 and $8 billion is a very wide range. And I think it's helpful to frame out kind of what I would hope to be kind of a downside scenario, but is there any feel for how we should be thinking about or moderating capital deployment expectations out to 2016? I mean, is that -- I assume the answer isn't 0, but is there any feeling for maybe what management is kind of thinking about as a reasonable range?

I can't give you a lot of guidance at this very moment. As things unfold here in the coming months, I think we'll be able to provide more clarity, but we're still doing our analysis. We're still trying to understand the regulatory environment and what the capital rules may be, going forward, for us. So unfortunately, I can't give you more than that.

Okay. And then just one final question, if I may. With the Provida acquisition and the free cash flow generated from that, is there any change in your view on the deleveraging that you're expecting it -- as part of your capital model looking out to '13?

No, not really. I mean, Provida will close sometime later on this year, so -- and it's uncertain when that might close, so it's hard to predict exactly the cash and earnings impact it would have in 2013.

The next question is from Ryan Krueger with Dowling & Partners. Ryan Krueger - Dowling & Partners Securities, LLC: First question was, could you just remind us of your operating EPS sensitivity to the equity market? Because I think that the market is probably running 4% or 5% better than in your original assumption at this point.

For about 1% change in the S&P 500, it's about $0.01. Ryan Krueger - Dowling & Partners Securities, LLC: $0.01, annually?

In our EPS? Ryan Krueger - Dowling & Partners Securities, LLC: Yes.

Off of EPS, yes. Ryan Krueger - Dowling & Partners Securities, LLC: Yes, okay. And then back to the group nonmedical health business. When you gave the 2013 outlook, did -- were you fully -- did you kind of have all the information on the fourth quarter and some of the weakness that occurred in -- was that factored into the outlook for '13?

Well, in terms of the group, the full year was within our targeted range, so we still believe our targeted range is appropriate for 2013.

Our next question is from Suneet Kamath with UBS.

First question is just on the long-term ROE target without buyback, the 11% to 13%. I guess I'm pleasantly surprised that that's up from what you're doing -- what you did in 2012 at the midpoint. So 2 questions on that. First, what is the interest rate environment that's predicated in that 11% to 13%? And then second, in terms of the $8 billion of capital that you would not be buying back in this scenario, what is the return that you're getting -- or the assumption for the return that you're getting on that capital?

With regard to the first question, I think that we've said that should rates remain generally flat, we expect to be at the lower end of that 12% to 14% with the buybacks. And now without the buybacks, the 11% to 13% range, we'll be at the low end of that range. And could you say your second question again? I didn't get that.

Just on the $8 billion of capital that you would not be using for share buybacks, what's the return assumption in this scenario? Or how is that capital being used?

That's in a series of investments, so it would be high-quality liquid investments...

But it's like a bond return, as opposed to, like, a...

Yes, yes, shorter-term bond returns.

Okay. And then I guess, the other question, on the VA DAC. I think at the guidance -- on the guidance conference call, you characterized half of the roughly $700 million impact being related to a change in your fixed income return assumption, your separate account growth model from, I think it was like, 7.5% to 7.25%. So I guess, first is that accurate? And then second, how does that return compare to your assumption for equity? And then I guess, related to that, if that 7.25% maybe has to come down again because interest rates are rising and bond returns are falling, could we be looking at another sizable DAC hit at some point down the road?

So of the total charge, about 1/2 was lapsed; and 1/4, returns; and 1/4 for other. And with regard to the -- that's a separate account assumption, which is a blended assumption, which is an equity bond assumption weighting. But people also have the opportunity to switch to a general account if bonds rise, so if interest rates rise and bond funds go down. So we're comfortable with this return.

Okay. And then just lastly, on the comments that you made, John, about the year-end stat net income versus operating income, does any of that change the cash flow roll-forward that you guys provided to us in terms of your outlook? The $3 billion to $3.5 billion of subsidiary dividends, is that still in place? Or is this affected somehow by that net income loss?

No, this is within our range that we had expected.

Our next question is from Jimmy Bhullar with JPMorgan. Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: I had a few questions, first on the Latin American business. The reported earnings seem close to the level that they've been in recent quarters. You didn't call anything out, but it seems like there's a tax benefit, because on a pretax basis, the earnings are a lot weaker than they've been in recent quarters. And then for Steve, could you just discuss how ALICO is tracking versus your initial assumptions? Because if you look at Asia earnings, they've been weaker than expected the last few quarters. You ended up taking a reserve charge this quarter as well. And then finally, on just your capital deployment philosophy. Assuming that you are able to de-register as a bank holding company, would you want to wait for SIFI guidance before you do something with the dividend or buybacks? Or could one -- or could you raise the dividend even before the SIFI guidance comes out? How would you view that if you -- assuming that you are able to de-register as a bank holding company over the next few months?

Yes, I hope we got all these questions, Jimmy. On the Latin American business, there was an $18 million tax benefit. It's in Latin America, but it's offset in corporate, so it's not a total change to our normalized earnings. If you could repeat the second question. Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: The second, just views on, like, how the ALICO business is tracking versus initial assumptions, given the weakness in Asia earnings recently.

So overall, ALICO is tracking well. There's ups and downs and there's some of the markets that we're in with ALICO that are tracking a little bit below our expectations, some of the markets were above. So overall, the ALICO transaction is still very much on target for what we assumed going into the transaction. We're very happy that we did the deal and think it's a very attractive transaction on many bases, strategic as well as financial. In terms of our dividend, Jimmy, I -- it's the same issue that we have around share buybacks. We're going to assess all these factors, regulatory factors. We're going to talk our board, obviously, and get board approval before we make any changes on our dividends. So that still is to come. Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: Okay. And then just following up on Latin America. The -- on a pretax basis, what drove the weakness there in earnings?

Well, we've been growing direct marketing and a lot of the new business channels, moving to our multiple distribution channels throughout Asia -- throughout Latin America. And that's had some higher costs associated with that. Direct marketing doesn't get DAC-ed as much, so you have just higher fixed cost in the year. Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: Okay. And I did notice that you added the P&C income statement, so I guess we could thank Ed for that.

You can definitely thank Ed for that, yes.

And next, we go to Tom Gallagher with Credit Suisse. Thomas G. Gallagher - Crédit Suisse AG, Research Division: A few questions for John. Can you just explain again what was the driver of the statutory loss for the quarter and why, with the loss, RBC came in higher than expected? Was there something going on, some moving parts there?

Sure. So this was for an investment that we had that had unrealized losses, and that was deducted from capital. And we -- there was a change in statutory accounting or an interpretation in statutory accounting. We're now reflecting more of this through net income. So we moved from an unrealized loss to a realized loss through net income, but it was just a geography change to the income statement and had no impact on capital. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Did you say that was -- was that limited partnership investments? So what type of investments were those?

It was a joint venture and limited partnership type investment. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Got it. And was that $1 billion? Or how big was that?

It's a series of them, and it was about that amount. Thomas G. Gallagher - Crédit Suisse AG, Research Division: And then -- and how -- why did the RBC go up?

Just from core favorable markets and good operating earnings. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Got it. So the impact of the loss was, I guess -- was that already being factored in when it was an unrealized loss and so it wasn't much of a change on the RBC? I'm just a little confused as to why that wouldn't have...

Yes, well, because it's not in your capital. It's not counted as part of your capital. It's an unrealized loss. Thomas G. Gallagher - Crédit Suisse AG, Research Division: Understood. The other question I had for you was on the variable annuity policyholder behavior charge, $342 million. I guess, just a general question on it. How do we get confidence that you've taken enough on this? We don't have any parameters to really measure this around, just that, I guess you got more conservative, you lowered the lapse rate. Because we've seen other competitors of yours with similar product structure take multiple charges. So is there any way you can give us confidence that we're not going to -- this isn't the first of a series of charges.

Okay, well, this was done after several years of study as customers who are in or close to the money get off of their surrender charge period. And we've had a few years of experience now. We also participated in an industry study of almost many of the major players, and our experience is tracking very well or almost exactly to that industry study. So I think we're pretty comfortable with where we are now, both we've had a few years of experience of this and how people behave as they get close to the money. When we looked at this, our assumptions are pretty good when people are well out of the money and well in the money. The curve for this dynamic lapse function, where we had to adjust it, was how people react when they get close to being in the money. And people are a little more sensitive than we had all initially assumed. We had benchmarked our original assumptions somewhat 10 years ago against people and we were pretty close to what others had done. But we've now adjusted, I think, to be what the experience is truly coming out. We had to wait until people get off their surrender charge period and also see people who might be closer in the money, so you can really see the experience of how to calibrate this loss function. But we've had, not only experience of a few years, but also industry experience. Thomas G. Gallagher - Crédit Suisse AG, Research Division: But John, hasn't the progression been worse, meaning lapses have continued to decline on sort of a consistent basis? And if that -- are you assuming continued shrinkage of the lapse rate? Or how should I think about that?

Well, it depends how people move in and out of the money and what happens to the equity markets and interest rates, so it is quite dynamic in how we price this and reserve for it. So it's not a simple answer that I can give you, but we have reflected our experience and I think we're comfortable right now with where we stand on this function.

Our next question is from John Nadel with Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: I have a question for Steve. I'm just curious if you could give us any color around what the process was like gaining approvals from -- in particular, from the Federal Reserve for the Provida deal.

John, we weren't required to actually get an approval from any federal regulator on this, but we certainly talked to our regulators when there's any significant transaction we're engaged in. So there was communication, but there was not an approval process. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Yes, I understand that. I'm -- I guess I'm just wondering if there was any real back-and-forth real questions about -- or many -- any indication maybe as part of that dialogue as to what specific capital levels or specific ratios or items were of most concern to the Federal Reserve around this deal around your capital levels.

Yes, I'm not -- I don't wish to speak about confidential conversations with federal regulators. Probably not a good thing to do. John M. Nadel - Sterne Agee & Leach Inc., Research Division: I figured I had to give it a shot. The incremental disclosure around rate sensitivity, in particular, I guess, around the annuities business. I understand, so the impact on an operating earnings basis when we look out the next couple of years is relatively modest, but you didn't really speak to anything below the line as it relates to DAC charges or reserve adjustments or any such thing. I was wondering, is there any help you can provide there? Because I assume we'd see some impacts as well there.

Well, below the line, if rates stay lower, our derivatives are going to be higher, so we'd have gains from where we are now, so it's hard to predict what. Because a lot of this is noneconomic when you get to the net income side. John M. Nadel - Sterne Agee & Leach Inc., Research Division: So I guess we should just assume that below-the-line impact to the 1.69% 10-year for the next couple of years will be essentially immaterial relative to your base plan?

No, I wouldn't -- the net income is quite sensitive to how markets move, and most -- the vast majority of this movement is noneconomic in nature. The dynamic lapse function change we did to VAs, that was an economic change. But the rest of it is really noneconomic in nature and it's -- I can't predict how that's going to move quarter to quarter. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Okay. Last question is just thinking about the annuity segment in the core earnings. If I look back at the last several quarters and then look at fourth quarter, you're suggesting to us that the core earnings level for this segment has increased from the first 3 quarters of the year, somewhere around $240 million average rates -- average quarterly earnings level, to now $320 million in the fourth quarter. And if we were to run-rate off of a $320 million, that puts your guidance for the annuity segment for 2013 -- I think it clearly indicates that guidance would be very conservative. So is there something still inside the fourth quarter core number that we should be thinking about as not something that's going to recur as we move forward?

Well, the retail annuity business has a lot of ups and downs. It's sensitive to the marketplace and what goes on in that business. So we're not updating our guidance on that at this time. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Well, sorry, I mean, the first 3 quarters of the year, though, on a core basis, the volatility in those earnings was not nearly as severe. I guess to the extent that there's any help you can provide, it would be appreciated.

We're not going to update our guidance at this time.

Our next question is from Chris Giovanni with Goldman Sachs.

So I guess you guys are doing a good job slowing down sort of the run-on of VA sales, but curious if you're considering any strategies to accelerate the runoff of VAs, either through buyout programs or if there are any structures or vehicles out there that you would explore.

Chris, it's Bill Wheeler. We aren't -- I think our strategies about VA is obviously, we're driving down GMIB sales and we're making product changes to do that. I think you'll see us make some announcements about new product introductions later this year, and that will -- as we sort of change the character of that business. In terms of buying out in-force, I -- we've examined that. We've looked at what others have done. I don't think that's an option we're considering at this time.

Okay. And are you still committed to the GMIB product? Or would you consider other living benefit features?

Well, it -- I'm not sure this is well appreciated. We sell more than a GMIB today. We sell a healthy amount of lifetime withdrawal benefit. And I think what you're going to see going forward is a much more diverse annuity new business model going -- in terms of what we're going to sell.

Okay. And then just a one quick follow-up, just on the returns of the new 4% rollup rate versus what you were selling before. How much different are your expected returns?

Well, so GMIB IV, with the 5% rollup rate but the lower dollar-for-dollar, had an ROI in the fourth quarter of about 15.8%. And GMIB V, with the 4% rollup rate, has our ROI modeled as over 18%. So it's a meaningful jump.

And then one just quick question for John. I guess, book value x AOCI is up just $0.04 year-over-year and it's grown, I guess, just 3% since '08. So what can be done to accelerate the growth in book? Or is your hedging strategy to protect economic capital, versus maybe smoothing GAAP results, really just put you at the mercy of below-the-line charges that are kind of out of your control?

Well, clearly, it moves around a lot and we just have to continue to focus on it. And it's one of those metrics, I think, that it's even hard year-over-year to look at -- you have to look at it over a long-term time horizon. But we want to make sure that we have it in our sight and we are -- we will slowly, over time, we believe that this can improve.

Our next question is from Sean Dargan with Macquarie.

Following up on the notion that book value ex AOCI is not growing much. Your long-term ROE target, is that impacted at all by book value perhaps being lower than where people were thinking about at the time of your Investor Day?

No, other than for the adjustments we've already announced in terms of the goodwill.

Okay. Just in thinking about long-term care, are we correct to think that if interest rates stay where they are and mortality and utilization is consistent with what you saw in the fourth quarter, in that scenario, there would only be a couple of penny impact to 2013 EPS?

Yes.

The next go to John Hall with Wells Fargo Securities.

This question's for Steve. As I think about the de-banking process, I guess the way we think about it is it's ultimately going to occur and then you must also be planning, in some fashion, for it to occur. So I guess the question has to do with, do you have sort of a series of contingency plans about the de-banking process that, when you get actual word of it, you can move quickly, depending upon when that word comes, whether it's perhaps 2 weeks from now or 6 months from now?

John, we are obviously planning for it. And there's still some work being done on our side in terms of assessing the regulatory landscape. We do get insights on an ongoing basis. That's why I'm reluctant at this point in time to make any pronouncements around share repurchases, dividend changes and the like, because the landscape does evolve. And until we get to that point when we're able to take capital actions, we don't think it's prudent for us to make pronouncements that may end up changing over time.

Understood. But say you got word in 2 weeks, do you have a contingency plan to roll forward to the board on whatever your decision would be?

We have ongoing conversations and have for many quarters with our board on these issues. So it's not as if we're going to start with them in a few weeks to have this discussion. But we're doing a lot of analysis internally around all kinds of measures that can impact us from a capital perspective, and that has to be taken into account as we decide how we address the issue of capital.

And next we'll go to Eric Berg with RBC Capital Markets.

Two questions. First, admittedly, the Europe and the Eastern Europe -- or Europe, Middle East and Africa business is the smallest of your 3 international units. But there too, there seems to be a revenue issue in the quarter on a constant currency basis. I think the revenues were flat or down there or very -- essentially flat. What's happening there? And then my second question relates to Japan. I'm just hoping you can provide additional detail on the nature of the products that are subject to this intense competition that you referenced. Is it -- and the nature of the competition. Is it pricing? Is it terms? And who is proving to be the troublemaker here? Is it indigenous companies? Is it foreign competitors?

Let me answer the question on Europe. We stopped selling in the U.K. annuities, so we're down $57 million year-on-year in PFOs on that and sales. So that makes a difference. We also have weakness in Western Europe, but that's been offset by strong growth in Russia, Turkey and also the AVIVA acquisition. So it's kind of balanced out some negatives with some positives, and that's why you're seeing it sort of flattish.

Actually, before we go on to -- I appreciate that. Just one quick question about this premium fees and other that you referenced. I'm just wondering, given the transition that Met is effecting away from high capital-intensive products -- so let's just say, given the transition that you contemplated that you're beginning here towards more, let's say, insurance products, you continue to publish this statistic and highlight it, which suggests to me that you think it's important, but I'm just wondering whether you're giving thought to and whether you might go in the direction of looking at total operating revenues if investment income figures -- if in fact it will be the case that investment income will figure increasingly prominently in your revenue mix. I just don't know and I'd like to know how you're thinking about that.

Well, we'll take that under consideration, but I think we're comfortable now with how we record our revenues.

Okay. Now if you could just talk about Japan a little bit, I would be grateful.

Actually, I missed your question. Could you repeat Japan?

Sure. So earlier in the conversation, there was the discussion about -- I think there was reference to certain competition in the bank channel. And I was just looking for a little bit more detail about the specific products that are being subject to competition. Is it explicit pricing? Is it other terms on the contracts that are the subject of the competition? And who are proving to be the troublesome competitors? Is it indigenous companies, or is it your foreign competitors?

Okay, so what's still in the bank channel are mainly single premium style products, both in yen, U.S. dollar and Australian dollar and some other currencies. And of course, as interest rates move throughout 2012, these products can become more or less attractive. And you have to be very careful with these product lines. You have to adjust your crediting rates quickly, and if you don't, you can get a large volume of lower ROE business. And so we have been diligent in ensuring that the business that we do sell to the bank channel meets our profitability hurdles.

And let me just add to that. It's Chris Townsend here. So as John referenced, the minus 34% in the bank channel earlier, I think the way for you to look at Japan would be look at the breadth of distribution of product that we have. So while the bank channel is down, I assure you that we're growing very fast in terms of the A&H products through the bank channel. We grew at 76% for the quarter. And we're selling A&H through 40 different banks at the moment in Japan, and also our independent agency grew at about 26% for the quarter. So we've got different levers to pull to make sure we're adhering to the discipline that both Steve and John referenced earlier.

Eric, let me just make one other comment. This is Steve. When we did our Investor Day in May of last year, we did not give guidance on the top line, and that was very intentional. And that was a signal of a shift in thinking at our company about what we should be focusing on in the near term as we look at our strategic initiatives, as we try to refocus our business on markets that we think will create shareholder value for us. So it's not that we don't have internal targets on top line, but we're trying to signal we're not going run this company based upon the top line, drive sales that may end up being sales that come back later and with low ROEs for us. And that is I think, a cultural shift here. And again, we are looking to grow our business but we are looking to grow profitably, are looking to get business on the books that is in excess of our cost of equity capital and that really is the driving force here for us.

Our final question will come from the line of Steven Schwartz with Raymond James. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: If I could just quickly, and then go into some other things. Chris, maybe you could touch on the A&H business in Japan. I think Aflac came out and said, April 1, they're going to hold their rates steady. I think Sumitomo said that they were going to lower rates 3%. What's Met doing, come April 1?

We've promised a 15% EC [ph] ROI, and that's consistent across all of our product range, including A&H. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay, so no change there. If I may, Steve, a little bit of a conflict I have here in my thinking. Most companies would say, "I've got $8 billion to deploy. I'm going to deploy that through either acquisitions or through share repurchase." You don't -- is it fair to say you don't see it like that, that you don't think that $2 billion for Provida comes out of that $8 billion?

I think it does. I mean, we have X amount of capital available to either make acquisitions with or to do share buybacks or to raise our dividend, yes. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. So I guess I don't get the downside guidance of if we don't do this $8 billion. Shouldn't it be, if we don't do this $6 billion?

Well, we did have baked into our guidance for -- through 2016, the plan, some acquisition activity. Some was in there. It wasn't any super large deals, but there were some ongoing acquisitions that we assumed in that plan. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: Okay. John, if you could -- I don't know. You guys haven't done this before, I don't think, but it might be worthwhile in this case, if you're willing. A point on the actual to expected in individual life, what does that equal to in earnings?

I think 1 point is about $2 million. Steven D. Schwartz - Raymond James & Associates, Inc., Research Division: 1 point is about $2 million, okay. And then finally, the guidance that you gave, it was a little unclear. The guidance that you gave on the interest rate assumption, that was cumulative, so it was 45 in the first year, going up another 95. So that was a cumulative thing, that wasn't another 150?

150 is the combined number.

Okay, thank you very much for joining us. Have a good day.

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.