Ladies and gentlemen, thank you for standing by, and welcome to the MetLife Second Quarter 2015's Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. 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, including in the Risk Factors section of those filings. 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 Ed Spehar, Head of Investor Relations.

Thank you, Greg. Good morning everyone, and welcome to MetLife's second quarter 2015 earnings call. We will be discussing certain financial measures not based on Generally Accepted Accounting Principles, 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 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. After prepared remarks, we will have a Q&A session. In fairness to all participants, please limit yourself to one question and one follow-up. With that, I'd like to turn the call over to Steve.

Thank you, Ed, and good morning everyone. We are pleased to report strong results for the second quarter of 2015. Operating earnings were $1.8 billion, up 11% from the second quarter of 2014. And operating earnings per share were $1.56, a 12% increase over the prior year period. Operating return on equity was 12.5% in the quarter, and tangible return on equity was 15.3%. Second quarter results were negatively impacted by the strong dollar. Operating earnings grew 11% on a reported basis, and 16% on a constant currency basis. Favorable tax items, improvement in both investment and underwriting margins, and growth in this business more than offset the negative impact from foreign currency translation. Investment margins remain healthy in the quarter with an average investment spread for U.S. product lines of 227 basis points, versus 215 basis points in the prior year period. This spread has been in the range of 210 to 240 basis points during the past few years, which highlights the resilience of our investment margins despite a multiyear period of low interest rates. Underwriting margins were also favorable in the quarter. After adjusting for notable items, this is the fourth consecutive quarter that underwriting margins have improved versus the prior year period. In the second quarter, underwriting margins were better in Retail Life, Group Life, Group Non-Medical Health and Property Casualty. Turning to regulatory matters, I will begin with a brief update on our appeal of the government's designation of MetLife as a Systemically Important Financial Institution or SIFI. Tomorrow the Financial Stability Oversight Counsel will file a brief opposing MetLife's motion for summary judgment, and supporting its own position. On August 21st, MetLife will file a final reply brief. At this time, the judge has not informed us whether she will be holding an oral…

Thank you, Steve, and good morning. Today, I'll cover our second quarter result, including a discussion of insurance margins, investment spreads, expenses, and business highlights. I will then conclude with some comments on cash and capital. Operating earnings in the second quarter were $1.8 billion, up 11% from the prior year period, and up 16% on a constant currency basis. Operating earnings per share were $1.56, up 12% from the prior year period, and 17% on a constant currency basis. This quarter included one notable item in our Asia business. As discussed on our first quarter earnings call, effective April 1st, the Japanese corporate tax rate was reduced from 31% to 29%. As a result, we've recorded a one-time tax benefit of $174 million in the second quarter. The operating earnings portion of the one-time benefit was $61 million, or $0.05 per share. We estimate that the current year tax benefit from the rate reduction will be approximately $24 million in 2015. Adjusting for notable items in the current and the prior year period, operating earnings were up 10% and 16% on a constant currency basis. The key drivers of growth on a constant currency basis were favorable investment margins, business growth, lower taxes, and under writing improvements. Higher expenses were a partial offset to these favorable items. Turning to our bottom line result, second quarter net income was $1 billion or $0.92 per share. Net income was $723 million less than operating earnings, primarily because of derivative losses. These losses were driven by higher interest rates and weakening of the U.S. dollars against certain currencies. The second quarter variance between operating earnings and net income includes asymmetrical and non-economic accounting of $856 million after tax. Net income adjusted for asymmetrical and non-economic accounting was above operating earnings primarily due…

Thank you. [Operator Instructions] Your first question comes from the line of Eric Berg from RBC Capital Markets. Please go ahead.

Thanks very much. John, you have indicated that because of Met's status as what I believe is the only listed New York-domiciled life insurance so the only listed large New York-domiciled life insurer, the other big New York companies are mutuals of course, that you've accumulated substantial additional reserves above and beyond what would have been the case if you were, say, a New Jersey company or domiciled in any other state. What is the status of your efforts to -- not to release, but what is the schedule under which you would release these reserves in connection with the rise in interest rates?

As a New York company and other NIC companies, we do annual cash flow testing. And these are typically done under the NIC guidelines set by the actuaries of the company and the chief actuary of the company signs off on how these reserves are tested. These are done every year at the -- based on the yields at the end of the year, and there are shocks down from there based on typically prescribed rates. New York through prescribed letters they send to us each year suggest more conservative reserves often than our actuaries would set on a normal basis. And this is some of the additional reserves that we hold in New York. Of course, as interest rates rise slowly over time, and we continue to do the cash flow testing, some of the reserves that have been set up for lower interest rates would be released. But it depends each year on how New York suggests to us to set our assumptions for those reserves, and it would be released over time. Because often the reserve increases are over a period of time, or they could be immediate, so it depends on the type of testing that we are doing. So slowly over time the answer is how we would expect that some of this would be released as interest rates rise.

One question for Steve to wrap up; Steve, you've said publicly that, and I won't quote you I don't remember exactly what you said, but I think the spirit of what you said is that I think you said at one of the conferences where you gave a presentation that you're feeling better than you have been feeling about the tone coming out of Washington, and the general outlook for, that you were hopeful about a reasonably positive outcome for Met and others with other systemically important financial institutions regarding capital requirements. What exactly is happening? What's the basis for your optimism or increasing hope that we're going to get a favorable outcome here? And am I characterizing your position, your thinking correctly? Thank you.

Eric, we've been working closely with policymakers and regulators over the last several years since Dodd-Frank was passed. And the nature of our conversations and tone of our conversations provide me more optimism than I had, let's say, three or four years ago. But again, we try to be cautious in our optimism because obviously if we were to be too aggressive on capital management and the rules were disadvantageous to us, we would not want to have to go to the marketplace and raise large amounts of equity to meet rules that, again, we don't have yet in draft form. So I am more optimistic that the conversations have developed over the years, where I think there's a better understanding of the insurance business model as compared to the banking model that regulators in Washington have historically been involved with. But the optimism is tempered by caution on our side in terms of being certain that we are well capitalized as these draft rules finally do come out at some point in the future.

Okay thank you.

Your next question comes from the line of Ryan Krueger from KBW. Please go ahead.

Thanks, good morning. Steve, in the last call I think you said that you would evaluate potential buyback again in the back half of this year. Can you give us an update on how you're thinking about that?

Sure, Ryan. If you recall, the second repurchase program that we've announced for the last year or so was announced in December, and began in January in terms of execution. So when we put that plan in place, we had an expectation that it would be completed by the fall of this year. As we had said, when we announced the plan, we would be opportunistic buyers of our stock. And you may recall that in the first part of the year our stock dropped a fair amount, and was below $50 a share for a period of time. So that program was completed in three months, roughly, versus the time period we expected, which was really off into the fall. So our view now is that we will look at this again later in the year, as you mentioned. We'll have a conversation with our Board in the fall, and we'll make some decisions at that point in time.

Okay, thanks. And then a question for Bill on the Group business, it seems like growth has decelerated a little bit. Can you talk about the dynamics there and your outlook for growth?

Sure, Ryan. Well, I think there's a couple of things going on, one is, in certain segments of the market, especially I think the dental business I think the competitive environment has gotten more challenging. And I think that therefore our wins on new businesses are lower than they otherwise might be. Secondly, remember, we've been being pretty aggressive about renewals and new business in our disability area, feeling that we needed to kind of catch up a little bit on our pricing. And I think that's depressed sales a little bit in disability. You can certainly see it in numbers. Our disability new sales are pretty low. Renewals are good in terms of we're getting our price on renewals, but the new business we're getting is pretty low. So I think those two factors are causing the premium growth in the group business to be a little lower than you might otherwise expect.

Okay, thank you.

Your next question comes from the line of Jimmy Bhullar from JP Morgan. Please go ahead.

Hi, good morning. The first question is just on interest rates. I think when you had given guidance or targets for the various businesses you had assumed a 10-year treasury yield of around 2.8% by the end of the year. So assuming if rates stay where they are through the next few months of the year, how much of a downside risk is that to your targets? And are there things in the business that are going better than expected that maybe might help offset some of the weakness? And then also I had a question on the hedge for Asia earnings. I think last time you had mentioned that about two thirds of the 2015 income was hedged at a rate of JPY107 to the dollar. But I wanted to see if there's a change in that.

Let me do the -- it is John. Let me do the Japan hedges first. We've actually increased our hedges. So we're now a 100%, and for 2015 the strike is at 107. And we've extended it out to 2016 as at 108, and the 2017 is at 122. And we've fully hedged all Yen earnings from Japan.

Through 2017? Fully hedged through 2017, you said?

Oh, well, as we get further out, it maybe between 85 to 100.

Okay.

Yes. And I'm sorry, your first question, you wanted interest rates…

So just on interest rates, how much of a risk is the current level of rates if we stay here through the end of the year versus your guidance or target that you had assumed of 2.8%, how much of a risk is that to your returns overall?

Well, we gave some sensitivities in our 10K. That shows by segment how things moved compared to a stress down compared to what our plan is at. So I would point you towards that. Let me also point out it's not just the long end moving up, we are sensitive a bit to the short end, because we had a very steep short yield curve, and so we benefited over the last few years from better earnings and securities lending. And that's impacted where we have asset intensive businesses in particular. We've seen a benefit from that in CBF over the past few years, maybe slightly higher earnings than people had thought, but that's because the short end of the curve was down. So it really depends on what's going to happen here, but I point you back to the 10K, because there would be some sensitivity there for you to analyze.

Okay. And lastly, Steve you mentioned the DoL standard briefly, besides the annuity business, is there risk in other parts of the business because of at least what the preliminary standards look like?

Jimmy, it's largely the annuity business that we're focused on in terms of the DoL rule.

Okay. Thank you.

Your next question comes from the line of Tom Gallagher from Credit Suisse. Please go ahead.

Good morning. John, your comment that you're now targeting variable annuity growth of greater than 20% from the old guidance of greater than 50%, what's driving that? Is that DoL fiduciary standards related? Can you give some color there?

Tom, it's Bill, I'll take that one. It doesn't have anything to do with the DoL. It really is just the pace of adoption of the new product versus what we had assumed in our plan for this year. Remember, this is a different type of rider, right? It's not just that we've tweaked the features a little bit. It's the withdrawal benefit versus a GMIB. And so I think that that's causing adoption to be a l slower than we had assumed as producers get more comfortable with the product. We've seen this phenomenon before with our indexed annuity product called Shield. Sales were lower for a while than we had originally thought, and now they are seeming to accelerate now that we have had the product out for a little over a year. And we probably should have been a little smarter about how the pace of adoption here. We do, and I think John alluded to this, we do expect to see increasing sales of FlexChoice in the latter half of 2015.

Okay, and Bill, just a follow-up on that related to DoL, so if the proposal does get past without any we will call it meaningful changes, how big of an impact do you see this being for the VA industry overall from a sales standpoint? Is it a game changer? Do you see it being meaningful or manageable?

It's hard to make that call. It's obviously going to be meaningful. A lot of it will ultimately depend on what exemptions the DoL allows down the road. Remember, a lot of their rulemaking is really built on exemptions to existing policies. And it's hard to know if this is at the end of the day more of a disclosure issue, or how behavior is really going to change.

Okay, thanks.

Your next question comes from the line of Seth Weiss from Bank of America. Please go ahead.

Hi, thank you, good morning. Steve, I wanted to follow-up on your comments on cash flow and capital. You commented on granular analysis of improving capital characteristics in certain segments. Could you give a little bit more color on some of the specific areas for improvement that you have already identified?

That was still in the early stages of the analysis, and what we'll be doing as a company is looking at various parts of the business, and then making some decisions and tradeoffs, meaning, some parts of the business we'll try to accelerate, other parts of business we'll have to redesign some products to make it more efficient from a cash perspective. So the work that we're doing really is interactive between all parts of the company. And we're not yet at the point where it made found decisions about any one part of out business. So it would be premature for me at this point to say what we'll be doing in terms of specific products, and essentially signal something before we really have completed our analysis. Other companies have engaged in this type of analysis before, and particularly European companies. It was a multiyear process that they went through. We're trying to accelerate that process, kind of learning from what others before us have done to shorten the timeframe, but it's not something that gets done in one or two quarters.

Okay, thank you. And then on comments in terms of if SIFI either is overturned or rules come in less onerous than feared you commented on maximizing the balance sheet. Just curious if this specifically means more share repurchases as we all think about it or if there are other tools in terms of maximizing the balance sheet beyond simply share repurchase, increased dividends.

Well, we look at share repurchases, we look at dividends, we look at acquisitions as all valid uses of any excess capital that we hold. And at the point in time when we have greater clarity about the found decision on our judicial appeal in the capital rules for non-bank SIFIs, we'll look at the landscape at that point in time and make a decision about where we utilize our capital.

Okay, so this is utilization of capital, not really structure of the balance sheet?

Hi, Seth this is John. It may also be how we think about our balance sheet. We have been over the past few years essentially de-leveraging. We've had less debt equity ratios. And that's been improving each and every period. And the question will be if we were free of the SIFI, what is the best balance sheet, and that could include debt, it include preferreds. I mean we have to rethink all that. We've been conservative so far. So we have maximum flexibility kind of what the SIFI rules are, because there could be Tier II, and it could be more complex, and might be different, so that we've been deliberately being a little underlevered [ph] compared to some of our targets, so that we have this flexibility. But when we're out of this one way or the other we'll optimize our balance sheet for the best returns, for the shareholder with a conservative for our safety for all of our customers.

Great, thank you.

Your next question comes from the line of Erik Bass from Citigroup. Please go ahead.

Hi, thank you. Can you talk a little bit more about the sales trends in Latin America? It looks like even adjusting for the Mexico Group case growth has slowed a bit there. And maybe also put into context how much the U.S. Direct business is contributing to sales?

Yes, sure. Erik, it's Bill, I'd hate to just look at any one quarter and add a context in Latin America, and say, "Geez, it's look like things are slowing down." I don't really think that's the case. For instance, the sales were a little suppressed this quarter relative to what we would normally expect our sales growth is. But if you look underneath, what you'll see is our Mexican AFORE, which is the private pension system in Mexico is, sales are much lower there. There have been certain sales practice changes, which makes switching between accounts much less prevalent for AFORE providers. And so gross sales, I'd say, are much lower, but at the same time retention rates are higher. Maybe a better indicator of sort of what's really going on in Mexico or in Latin America is just PFOs. On a constant rate, PFO growth this quarter was 13%. And that's right where we would expect it to be. Things will move up and down in Latin America over time, but I'd say the growth trend is still in place.

Got it. And then on the Direct side or that's probably still small piece of sales now, but if you can talk about how that's trending? I think you said that the level of investment spending will go down in the second half of the year and then obviously off the variable cost as sales come through.

Yes, so Direct is a start-up. It's still I'd say this is a -- I'd call this is a transitional quarter in that we had some small reserve adjustments. They had a couple of bad homeowner's claims. We do sell Auto and Homeowners direct through that channel. And we clearly had some growth strain, because year-over-year premium growth or sales growth is 70%, which obviously I don't think we're going to continue to grow at that rate, but we're growing this business. We think that in the second half of the year there will still be operating losses, but they will be much less than what we reported in the second quarter. And the other thing I'd say is this business is just -- if the model is coming together in that, we're seeing our mortality experience begin to improve, our retention rates are beginning to improve, so I think the trends are all in the right direction.

All right, thank you.

Your next question comes from the line of John Nadel from Piper Jaffray. Please go ahead.

Hi. Good morning and thanks for taking the question. Maybe, Bill, just a follow-up on a response to an earlier question about increasing competitive pressure in the Group Insurance side, I think you mentioned certain segments -- is it fair to assume that you're talking about the large case market given that's where I think Met's prevalence is, or is there more to add there?

Yes, well, I think I talked about the Dental business. Dental business is actually, well, what we would mid case. I think the rest of the industry calls that large case, but we're talking under between 1000 and 5000 lives. We're seeing just a little context here, John. MET is the largest for-profit dental insurer provider in the United States. So we're the market share leader. People come at us from time to time. We're currently seeing that in the mid-market. We tend to just be very disciplined about this. Dental margins are generally pretty thin to begin with. So we'll let that business go, and it will probably come back around within a year or two.

Got it. And then bigger picture on the Group Insurance side, you guys are the largest non-medical insurer in the U.S. I think by just about any metric. I'm curious what opportunities do you believe may develop given the ongoing consolidation that we're seeing amongst the largest medical insurers in the US. Are you seeing any ramifications from that currently in the market? And I guess over the next couple of years as this all figures its way out do you think it will result in any strategic opportunities for MET including the potential to acquire non-medical operations from these medical providers?

Well, most of these big medical carriers do sell life, disability, dental, and it's a bit of a -- it's obviously not the remaining focus. So the logic has always been maybe they'll as they continue to get more focus on the medical side of the benefits equation that they'll potentially divest. We haven't really seen much of that happen, though that's always been the theory. So I guess the potential is always there that there might be some strategic opportunities, but I think we're just going to have to wait and see.

Okay, so nothing yet. And in terms of the immediate response in the market, is there anything really coming up as a result of this?

No, other than I think the intermediaries are all very distracted right now dealing with all the consolidation both in health insurance and in commercial line. Q –John Nadel: Got it, thank you. And then just a real quick one for you, Steve; given Bill's retirement next month, I was wondering if you could update us on what kind of management structure you expect to have in place over the Americas.

John, we haven't made any decisions on that.

Okay, thank you.

Your next question comes from the line of Jay Gelb from Barclays. Please go ahead.

Thank you. I was wondering if you could give us your thoughts on potentially reinsuring out guaranteed living benefits on the variable annuity portfolio given what we've seen in terms of trends in the marketplace among some other major annuity writers.

Hi, Jay, it's John. So up till now the deals that have been done have been on WBs not on IBs. So much of our in-force, and we had been selling until recently are IBs. We look and evaluate these. I think they share 50% of the risk to the reinsurer on this. And of course we're always evaluating the cost benefit of all of these ideas. We haven't done a transaction as of yet.

Okay. And then a separate issue for you, John. How should we think about the share count for the full year? So if you make a simplifying assumption that there's no more share buybacks for the remainder of 2015, can you given the exercise or issuance of stock-based compensation where would you see share count ending out for the year on a fully diluted basis?

Well, I think if you go back over the past years and look at the issuance of share account and the timing of that by quarter to see how the large amounts are exercised and are issued for our employee benefit programs, and of course individual exercising is hard to predict, if that makes some material difference, usually it doesn't. And then we've got any buyback activity, which again Steve's mention would be reevaluated and looked at and discussed with the board this fall. But you can look back to historical patterns. I don't have it at the top of my head. But you can see it year-by-year.

It's typically way towards 4Q, right?

I don't think so, I think it will be more in the first half of the year when we do our big awards, but again, you just go back and check. You can see it quarter-by-quarter.

Will do. Thank you.

Your next question comes from the line of Yaron Kinar from Deutsche Bank. Please go ahead.

Good morning. Steve, you had mentioned looking at free cash flow optimization and I guess considering the fact that we've seen a lot of appetite coming in from overseas insurers for U.S. businesses. Would you consider selling U.S. businesses if you deemed them not free cash flow friendly or not free cash flow oriented?

Well, again Yaron, we haven't made any firm decisions, but everything is on the table in terms of how does analysis comes out. Certain things will want to do more of. Some things will do less of. Some businesses will have to redesign their products. And we don't rule out selling businesses.

Okay. And then you had mentioned that Dental utilization was a bit high in the second quarter just catching up on weather in the first quarter. I think that last year we saw a similar pattern but that also [technical difficulty] where utilization was still a little bit high. Do you see that being the case this year again?

Yaron, I'm not sure if it will or not. It looks very similar to the experience we had last year, where of course we had two bad winters in a row. I will say this Dental utilization if you look at the first six months is right on plan. And so my expectation is that it will –-- the third quarter will probably moderate. But you can't get surprised here a little bit. Q –Yaron Kinar: Thank you.

Your next question comes from the line of Michael Kovac from Goldman Sachs. Please go ahead.

Hi, thanks for taking the question. Just wondering going back to the Department of Labor fiduciary standards, if the rule is passed in a way that it looks today what sort of impacts would you expect on the way that you compensate producers for variable annuities that you're selling? And then also on that can you give us a sense of the percent of variable annuities that you sell in retirement versus non-retirement?

Sure. I think what you meant in your second question is how much your variable annuities do you sell on qualified plans. It's all retirement, right?

That's right.

But it's about 70% of our VAs today are sold in group qualified assets. And so it's an issue for us. Today we have already changed our compensation policies a couple of years ago to, I'd say, equalize comp between proprietary and non-proprietary annuities for our producers. That's kind of a bridge we've already crossed. With that said, we might still have to make other compensation adjustments to our producers based on how the DoL rule comes out. But I think we feel like we've already made -- we've already climbed part way up that hill.

Great, thanks. And then John mentioned conversion of a securities accounting system contributed about I think five basis points was the number. Can you describe in a little more detail what's going on there and if there's any continuation from that going forward?

Hi, this is John. Yes, we convert over to a new accounting system from investment portfolio. And we do it for the U.S. portfolio this past quarter. As you can imagine with the size of our U.S. portfolio, small little rounding and different slight different impacts in amortization can have an impact. The impact we mention this quarter is a one-time event.

Great, thanks.

. :

Yes, thanks and good morning. I just want to come back to the DoL proposal one more time. And I'm just wondering what the proposal if enacted as proposed would do to lapsation rates in variable annuities? And where I'm going with this is that perhaps contract holders are not turned into new contracts when the penalty period expires as often. Is that something that you're concerned about?

We probably have mixed feelings about that, Sean. Obviously we like, as a general rule, we like low lapse rates. There is some of the in-force where the guarantees are relatively high, and some of our competitors from time to time have actually tried to buy out that business with policyholders. We've not done that by the way. A little bit of it will depend I think in terms of the macroeconomic factors. If interest rates go up, we feel a lot better about our GMIB in-force. And I'd think in general we would then think lower lapse rates would be a pretty clear in that positive for the annuity business for Met. So I don't think that's going to be a big driver for us. I don't that will end up being much of an issue.

Okay, thanks. And just one follow-up about your focus on cash and cash flow generation, is that at odds or is that on the same page with how the Fed is thinking to the extent that you've had discussions with the Fed about your strategy to focus on cash flow?

This is unrelated to the Fed.

Okay. Thanks.

Your next question comes from the line of Humphrey Lee from Dowling & Partners. Please go ahead.

Thanks, good morning. Just a question about the spread compression that we're seeing in annuities, the base spread came down around 27 basis points and my understanding is that's in part because of some of the interest rate protection rolled off in the quarter. How should we think about the rolling off schedule of your interest rate hedges and this kind of 20 basis point impacts that we've seen in the second quarter would that be an ongoing thing? I guess in a sense how are those kind of interest rate hedges contracts were staggered throughout over the next several years?

Humphrey, I apologize. I'm not sure I got all your question, but I think I got the just of it. So yes, there was an investment margin decline in the annuity business this quarter. And yes, it was driven by the maturity of a particular interest rate floor. MET had well over a decade ago, or roughly a decade ago had invested a lot of interest rate floors for just the kind of scenario that we've gone through. Those are starting to mature now, and therefore -- because interest rates are still low, our margins are starting to decline as they lapse. So we had a decent-sized one that was supporting the annuity business lapses mature this quarter. So that investment margin that we lost there is permanent, right? It's not going to come back. And these things will continue to mature over the next number of years. So depending on what happens to interest rates that will obviously -- could have an impact on our interest margins in another part of the company.

So you've had [technical difficulty] matured in this quarter but [technical difficulty] going to be every quarter we'll see a 20 basis point impact but more like depending on the schedule. And then in that case can you maybe give us a sense of how like when will we see maybe another big one that will be maturing?

I don't remember when the next one comes. We know there's not another one coming up this year, for instance. There's not going to be any more maturities of floors coming up this year I think. I can't quite recall when the next one is coming up.

Okay, thanks. And then, just one quick follow-up on John's comment earlier about high expenses in the quarter related to regulatory expenses. Can you give us a sense of how much was that in the quarter?

Well, as I said about, half of the higher ratio was due to lower PFOs and single premium sales, and either half was due to expenses.

But in terms of that expenses is what portion is related to regulatory-related expenses versus other things?

There were some pieces within that, and they're all split between three different items.

Okay, thanks.

Okay. We are past the top of the hours. Thank you very much for your participation. Have a good day.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.