And thank you so much, ladies and gentlemen, for standing by. Welcome to the Fourth Quarter 2011 Prudential Financial Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to our host, Mr. Eric Durant. Please go ahead.

Thank you, Karen, and thank you to all of you for joining our earnings call. But first, in our 11th year as a public company, participants on today's call include: John Strangfeld, CEO; Mark Grier, Vice Chairman; Rich Carbone, CFO; Ed Baird, Head of International Operations; Charlie Lowrey, Head of Domestic Operations; and Peter Sayre, Principal Accounting Officer. I'll read a quick commercial message and then we'll get started. In order to help you to understand Prudential Financial, we will make some forward-looking statements in the following presentation. It is possible that actual results may differ materially from the predictions we make today. Additional information regarding factors that could cause such a difference appears in the section titled Forward-Looking Statements and Non-GAAP Measures of our earnings press release for the fourth quarter of 2011, which can be found on our website at www.investor.prudential.com. In addition, in managing our businesses, we use a non-GAAP measure we call adjusted operating income to measure the performance of our Financial Services businesses. Adjusted operating income excludes net investment gains and losses as adjusted and related charges and adjustments, as well as results from divested businesses. Adjusted operating income also excludes recorded changes in asset values that are expected to ultimately accrue to contract holders and recorded changes in contract holder liabilities resulting from changes in related asset values. Our earnings press release contains information about our definition of adjusted operating income. The comparable GAAP presentation and the reconciliation between the 2 for the quarter and year ended December 31 are set out in our earnings press release on our website. Additional historical information relating to the company's financial performance is also located on our website. John.

Thank you, Eric. Good morning, everyone. Thank you for joining us. Now that we've closed the books on 2011, I will kick things off with some high-level comments on the year as a whole. First, earnings. Earnings per share, based on after-tax adjusted operating income of the Financial Services businesses, were $6.41 compared to $6.17 a year ago. This modest improvement in EPS does not reflect our progress during the year. If you remove the market-driven and discrete items we've disclosed each quarter, which Rich and Mark will review with you for the fourth quarter, the EPS increase would be 22%. Second, capital. Our capital position remains exceedingly strong. We are well positioned to pursue business opportunities, and we have capacity to remain strongly capitalized even in stressed environments. As for capital management, we will continue to seek acquisitions where we can realize attractive returns and are comfortable with the execution risk such as our acquisition of Star and Edison. At the same time, we take a balanced approach to investing in businesses and returning capital to shareholders. During the second half, we returned about $1.7 billion of capital to shareholders through our share repurchase program and increased dividend. We did this while maintaining a solid balance sheet and growing book value. Third, commercial momentum. We are a leader in the markets we've chosen to compete in, and you can see strong commercial momentum reflected in our business drivers. Solid sales and flows drove underlying growth in our U.S. businesses, with headlines in Retirement and Asset Management. Prudential Retirement’s gross deposits and sales reached a record high of $44 billion, driven by strong sales in the Institutional stable value wrap market and including groundbreaking defined benefit risk transfer sales. Account values in Annuity and Retirement registered significant gains from a year earlier, and AUM and Asset Management exceeded the $600 billion mark for the first time. As you know, we strengthened our International business with the Star and Edison acquisitions last February. Business integration is well on track, with the successful completion of the merger of Star and Edison into Gibraltar on January 1 being a major event. We remain confident that we will achieve planned expense savings on schedule. In International Insurance, we're benefiting from expanding distribution and continued growth in the Life Insurance Protection and Retirement markets. Among our milestones in 2011 was more than $3 billion of annualized new business premiums, including the initial contribution from Star and Edison and a growing contribution from the bank channel in Japan. So to conclude, Prudential had a very good year, driven by the quality of our individual businesses, by the mix of those businesses, by our financial strength and, we believe, by the talent of our people. Our solid results enhance our confidence that we will achieve our ROE aspiration of 13% to 14% for 2013. With that, I'll turn it over to Rich.

Thanks, John. Good morning, everyone. Last night, we reported common stock earnings per share of $1.97 for the fourth quarter based on adjusted operating income for the Financial Services business. Now this compares to the $1.76 per share in the year ago quarter. We have a short but not insignificant list of market-driven and discrete items affecting current quarter results. In the Annuities business, the equity market increase in the quarter caused us to release a portion of our reserves to guaranteed minimum death and income benefits and led to a favorable DAC unlocking, resulting in a benefit totaling $0.28 per share. In Individual Life, the equity market increase in the quarter drove a reduction in net amortization of DAC and related items for a benefit of $0.03 per share. In the International Insurance, Gibraltar Life and other operations benefited by $0.15 per share from the sale of our stake in a pension fund manager in Mexico. This benefit was largely offset by the integration cost of $0.13 relating to the Star/Edison acquisition. In total, the items I just mentioned had a net favorable impact of about $0.33 per share on the fourth quarter results. The year-ago quarter benefited about $0.32 per share from unlockings and reserve releases mainly from the 10% increase in the S&P 500 in that quarter and from the gain on the partial sale of the indirect investment in the China Pacific Life group. Taking these items out of both the current and the year-ago quarters would produce an EPS increase of about $0.14 per share, driven largely by organic business growth and the contribution of Star/Edison earnings x the onetime charges, of course. Moving on to the GAAP results of our Financial Services business. We reported net income of $606 million or $1.26 per share…

Thank you, Rich. Good morning, good afternoon or good evening, whichever is appropriate. I'll start with our U.S. businesses. Our Annuity business reported adjusted operating income of $391 million for the fourth quarter compared to $345 million a year ago. The reserve true-ups and DAC unlocking that Rich mentioned had a net favorable impact of $180 million on current quarter results. This includes a benefit of $121 million from the release of a portion of our reserves for guaranteed minimum death and income benefits and a further benefit of $59 million from reduced amortization of deferred policy acquisition and other costs, in both cases, reflecting favorable market performance. Results for the year-ago quarter included a net benefit of $146 million from a favorable DAC unlocking and reserve true-ups, largely driven by the 10% increase in the S&P 500 that quarter. Stripping out the unlockings and true-ups, Annuity results were $211 million for the current quarter compared to $199 million a year ago or an increase of $12 million. This increase represents the net effect of growth in our fees at a very solid pace, partly offset by a higher level of base DAC amortization and by higher expenses and interest charges in the current quarter. Policy charges and fee income in the quarter increased by $57 million or 14% from a year ago, reflecting an increase of $10 billion in average variable annuity separate account values, driven by $13 billion in net sales over the past year. However, we've accelerated our base level of DAC amortization in the current quarter, following our negative unlocking in the third quarter. In addition, current quarter expenses were higher than a year ago, partly as a result of business development costs. And interest expense was also higher, reflecting the financing of commissions and other…

[Operator Instructions] Mr. Suneet Kamath, Sanford Bernstein. Suneet Kamath - Sanford C. Bernstein & Co., LLC., Research Division: My first question is on the pace of share buybacks. Obviously, lower in the fourth quarter versus the third quarter, it certainly came as a surprise to me, perhaps others as well. So just want to get a sense of kind of what governed that decision in terms of your thinking about third quarter and then ultimately what happened in the fourth quarter.

Yes, this is Mark. I guess I'd start the answer by saying don't try to read something into it that isn't there. We take a fairly long view of capital deployment, and we were uncharacteristically opportunistic in the third quarter. And almost by definition, if you speed up a little bit sometimes, you're going to slow down a little bit some other time, and it's nothing more than that. We're on track with respect to implementing our capital deployment plans, balance sheet is very strong, liquidity is very strong. And so I would encourage you to take a longer view than just a quarter-to-quarter fluctuation. This is not a trading environment for us. Again, we were opportunistic in the third quarter, but we're on track with respect to our longer-term objectives and comfortable with the trajectory. Suneet Kamath - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And I guess my second question on capital is if I go back to the investor slide that you put out, I think it was in December, you talked about the required capital increasing by about $2 billion in the 2011 year. Given kind of where we sit today, Annuities are slowing down at least relative to the first quarter. And then you have these institutional investment products, and I guess I'm not quite sure what the capital requirements on those are and how they compare to Annuities. And then you have this longevity risk transfer business that you're adding. Kind of when you think about the business mix shifts that are occurring in terms of new business, any changes to the kind of $2 billion number in terms of incremental capital that you needed last year as you think about this year?

You hit on all the right points. It's going to depend on the business, but all of that capital, one way or another, is going to be deployed at rates that are going to support our 13% to 14% ROE goal. Whether they're used in buybacks or they're used in business, they're going to support that goal for 2013. Suneet Kamath - Sanford C. Bernstein & Co., LLC., Research Division: Understood. I guess maybe just to track it a little bit, if we compare Annuities to Institutional investment products, obviously, the requirements for Annuities have gone up over time. How do those 2 businesses compare in terms of their capital needs?

Well, there are 2 different metrics of which their capital needs are driven, right? Annuities capital needs are driven by -- mostly by the deferred acquisition costs that we pay upfront and in the other products, they're driven a lot by longevity and credit risk. So I'm loath to give you a rule of thumb that's going to reconcile pi to Avogadro's number.

Suneet, the capital requirements on the investment-only stable value products are pretty small. Annuities are more capital-intensive, and that's the directional answer. But as Rich points out, it does depend on some of the specifics of the products. But Annuities would be more capital-intensive than investment-only stable value. Suneet Kamath - Sanford C. Bernstein & Co., LLC., Research Division: Okay. So perhaps favorable mix shift.

Yes, favorable mix shift, if Annuities slow down and investment-only stable value speeds up, yes. The wildcard is the defined benefit risk transfer. Suneet Kamath - Sanford C. Bernstein & Co., LLC., Research Division: And how would those compare to Annuities?

Well, off the top of my head, I'd have to say maybe it's sort of in the middle. But that's one where we could do quite a lot of business if the market really does get going. So the wildcard there that I'm referencing is more the potential volume in a market that's just developing.

Yes, I'd say that was a push. But once again, I want to make the point that the ROEs in these products are supporting that 13% to 14% return.

Nigel Dally, Morgan Stanley.

Another question on capital. So to move the ROE towards your 2013 target, you're obviously going to need to redeploy a substantial amount of the $4 billion to $4.5 billion of excess capital. In addition to buybacks, you mentioned potential acquisition opportunities in your comments. Should we imply from that, that the pipeline of potential targets is beginning to improve? And also, can you provide a pecking order of what products or geographies are of greatest interest to you? Then -- perhaps if we start then I’ll follow up.

Okay. So, Nigel, if I don't cover it, you tell me. So this is John. So a couple thoughts about this. First, vis-à-vis the ROE targets. The way we think about achieving the aspiration, as Rich described, as I've mentioned in my prepared comments, there are 3 primary things that are going to get us there. One is the successful integration of Star/Edison, and you’ve heard the progress we're making on that front. The second is the continuing growth of our high returning businesses, and you're seeing strong fundamentals in those businesses. And the third is also successful deployment of our excess capital, both that which we have and that which we create over time. When we think in terms of M&A, I have to sort of step back versus -- let's just talk about opportunity sets first and then go to M&A, at the risk of giving you a longer response than what you're looking for. But I think it's more representative of how we think about this, which is that -- clearly, in our mind, organic is cheaper and it's a less intrusive way to develop the business. And at times like this, the combination of a strong brand, strong capital and unquestioned commitment that aligns a business in which we're in have been very advantageous, and you see that showing up in our fundamentals. And that's the first sort of priority we have in terms of growing our business over time. And it's not just a theory; it's reality and you can see it. And that's where our business leadership is focused. And in some cases, it manifests itself in new products as well or new distribution channels and in new business areas as Mark mentioned with defined benefit risk transfer and the progress there. So we're…

Great, very helpful. Second question was just on group disability. Clearly, somewhat challenging backdrop there. Can you discuss what you've done with pricing in that business and how quickly that potentially could flow through to improve the overall results?

Sure, Nigel. It's Charlie. Obviously, disability, we had a challenging quarter this quarter. And I think that really reflects the continuing effects of the economy. And I think in terms of pricing, when we -- most of our cases are large cases, which means that they're experiential. And since we've had relatively poor experience, we are able to increase the pricing. So we're doing that and we've been doing that since probably halfway through last year. Most of our cases are 2 years or less. So we're beginning to work our way through the pipeline, so to speak.

Mark Finkelstein, Evercore Partners.

Actually, just a follow-up to the prior question. Can you give us some benchmark as to what are the average rate increases that you're guiding on the cases that you are renewing?

Yes, it's -- I don't mean to dodge the question, but they really are experiential. And so you get some that are in the low single digits, you get some that are in the double digits. It really depends on the experience. But I think it's fair to say that we are -- we're looking at it extremely closely, and we are getting price increases as we go forward.

Okay. Then maybe just one follow-up as well on capital. You have $500 million left in the authorization. On the last call, Mark characterized it as a fluid evolving process that you look at continually. But last year, you spent about what you generated, call it $1.5 billion. What is it -- what do you need to see? Or what is it that has to happen to really start dipping into that what you characterize as readily deployable capital, which you characterized as half of that $4 billion to $4.5 billion?

There's another ingredient to that mix, right? And that's the absolute leverage ratio. And we've got this targeted 25% debt to capital ratio. It's important for us, it's important for our rating. That is one ingredient in there that we're always mindful of. And other than that, as capital becomes available at the holding company, we'll reevaluate our buybacks and we'll reevaluate our dividends.

Yes, Mark, we have a plan for the way in which capital emerges and the way in which it's deployed in the businesses, and we'll be looking at a range of variables, including financial ratios that Rich mentioned. But we're pretty comfortable with where we are and the deployment track and the business track to realize the objective that we've set out there. Keep in mind though that when we set an objective of 13% to 14%, we didn't qualify it by saying it's easy. That reflects what we believe is the earnings power of the company, supported by an appropriate capital structure. And we've got to manage to realize that earnings power, and we have to deploy the capital. And Rich emphasized earlier that everything we do is focused on ensuring that we're accretive to that capital outcome. And so the context of this is that we do have a vision of earnings power and capital that we'll realize our objective and we're going to manage to it.

Our capital plans are hard wired into that 13% to 14% return.

Okay. One just very quick follow-up to that is, if I go back, call it 3, 4, 5 years, you used to give sensitivities to S&P movements kind of in a range of, say, 30 to 50 RBC points for every 100-point move in the S&P. Again, I know it's totally changed right now, and so those old metrics are no longer that useful. But is there anything that we can point to, to just think about how S&P moves drive capital?

Hey Mark, it's Eric. Maybe my memory is failing me, but that is not something that we've done in the past. And we're not going to start that today.

Chris Giovanni, Goldman Sachs.

I wanted to see if you could talk some about sort of the current status today as a savings and loan company. I believe you're working with the Federal Reserve Bank of Boston which I think your overseer here on the supervisory side to deregister. As a savings and loan, I wanted to kind of walk through this process and sort of what you deem is the benefits to the extent that you get deregistered.

Yes, this is Mark. I'll start and maybe I'll ask Charlie to make a comment on the business if he wants to. I’d use a little bit broader framework than just deregister. We're in the process of managing the thrift in a way that will remove us from automatic coverage by the Volcker rules. And the issue with respect to the impact of the Volcker rules is concentrated for us in the Asset Management Business where we do sponsor funds and co-invest and the level of activity and market expectations in that arena for us are both inconsistent with compliance with the Volcker rules. So we're looking at the options that we have. You indicated working with regulators. We are working with regulators to assess our options. And we anticipate that over the next few months, we will manage the thrift to a situation where we won't be automatically subject to the Volcker rules. I don't know if Charlie wants to add something to the Asset Management business piece of it, but the objective here is related to our business models and asset management and our ability to execute what is a very, very successful business for us.

Yes. No, I think that covers it well.

Okay. That's helpful. And then just second question in terms of the VA business. I guess your largest competitors made a commitment here to dial back noticeably in the market and I wanted to see if here early in 1Q, if you're seeing sales levels pick up as they look to retrench or how you're seeing the VA marketplace today, and similar along those lines, how you're viewing your current product.

Okay. I can't really talk about the first quarter, but what I can do is just talk about the consistency of our sales. I mean, we really look for sustainable profitable growth. And if you look what we did at the beginning of last year, we reduced the benefits and increased the pricing with the acknowledgment that interest rates were probably going to be low and stay low for quite a period of time. That allowed us to have a consistency of product with a sustainable profitability over the long term. And that's what really we look for. So the last 3 quarters have been -- including the fourth quarter, have had a sustainable and fairly level rate of sales. And so we feel comfortable with that level, and we'll look to see what happens this year. But we feel comfortable with what happened last year and where we are in terms of product.

Jimmy Bhullar, JPMorgan. Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: I had a few questions. The first, on your Japan business, your sale in the bank channel obviously grew at a strong pace versus the previous year but declined sequentially in the fourth quarter. So I just wanted to get an idea on if you think you've saturated the market there or do you think there's opportunity for further growth. And then on the Retirement business, in the Full Service Retirement side, you’ve had negative flows for the last several quarters. And your views on that business have gotten more negative as -- over the past couple of years. So I just wanted to see what you see -- what your outlook is for the Full Service Retirement. And then lastly, on the Institutional Retirement side, if you can just talk about the pipeline. Obviously, this quarter, you had a couple of pretty large longevity risk transactions. But just -- where do you see the pipeline and what type of pricing do you have -- are you seeing in that business given that a lot of competitors have actually dropped out?

We'll start with Japan and Ed.

Jimmy, it's Ed Baird. The fourth quarter bank channel sales were -- as you pointed out, they were actually up 32%, which is a meaningful increase over the comparison quarter. But if you compare it to the preceding quarter, not as strong, and I think that might be the first time that, that's happened in several years because this channel, of course, has grown at an extraordinary rate. I don't attribute any meaningful significance to that other than the fact that the third quarter was up around 70%. So the fact that the fourth quarter wasn't able to exceed that by going up only 32% is not a point of concern. One of the big banks was a little lower than they had been in the prior quarter, but we continue to add banks and we continue to deepen our penetration with them. So I think as the long term trend here continues to be quite positive with any third-party distribution, you're going to see a characteristic fluctuation quarter-to-quarter. But I think if you look at this on any rolling quarter basis, this has an extraordinary amount of momentum in it.

Charlie?

Okay. Let me answer -- you had 2 questions. I'll answer the one about Full Service outflows first. The backdrop here is that we are in the mid to large end of the market. And there that we're still seeing what we saw before, which is low plan formation, not a lot of RFPs out there, and that's affecting plan sales. We're also seeing, as we talked about before, further unbundling in the marketplace and fee disclosures, all of that affects, I think, over time the profitability of the business. So we look at the business and we still like the business, but we're going to exhibit, I think, a fair amount of price discipline in what we choose to take or what we let lapse. And you've seen some of that this quarter. So I think that begins to explain at least some of the outflows that we see. And we're comfortable with the business we're writing, and we're comfortable with the business we're letting lapse. The other side of the business though, as you talk about the IIP business as we call it and the investment-only stable value, we're still very pleased with. We think there is a dearth of this kind of product in the marketplace, pricing is holding up very well. And we continue to see a fair amount of opportunity in this side of the business. So we'll continue to focus on both sides. But in terms of near-term opportunity, I think the IOSB business is -- has a lot of growth potential left.

Jimmy, was your question about investment-only stable value or about defined benefit risk transfer? Jamminder S. Bhullar - JP Morgan Chase & Co, Research Division: No, just on the defined benefit risk transfer because you had a couple of large cases, I think, in the U.K. market in the fourth quarter.

Yes, sorry. I missed that. In terms of defined benefit risk transfer, I'll take the U.K. and then the U.S. In the U.K., we did do some interesting deals, and they were reinsurance deals on the longevity side. We see that as a market that will continue. The U.K. is, I think, well ahead of the U.S. and has been for years in terms of pension risk transfer and especially longevity risk. And we are participating in that and see a fair amount of opportunity. In the U.S., I think as I just said, the market is a little further behind. We do think this will be a business going forward, but it's challenging obviously given the low interest rates now and the underfunding of the pension plans. But it's a business that we have built up significant capabilities in and think that there will be, over the long term, some significant opportunities going forward.

Jay Gelb, Barclays Capital.

I had 2 issues I'd like to cover. The first is on Star/Edison. For those expense savings, should we expect all those to fall to the bottom line or will there be any offsets in investments or otherwise? And the second issue would be for Mark, if you can update us on the nonbank SIFI classification. There’s a one -- we might expect to -- for that to be implemented and steps Prudential will take ahead of that.

Jay, this is Ed Baird. Let me just refresh some of the numbers that were given because we're completely consistent and on track with the numbers originally outlined a year ago when we announced this deal. And that is that the expenses are onetime expenses which will accumulate to a total of around $500 million, and that the savings which will be ongoing will accumulate to about $250 million. So the difference is clearly in terms of the onetime versus the sustainable earnings. And that will drop, as you said, to the bottom line, and we're very well on pace with that. By the end of this year, we're going to be probably in the $170 million range or so, meaning 2012 towards the $250 million target. And on the expenses, we're going to probably be as much as 75% or 80%.

And Jay, any top line, I thought you might have inferred there that you were thinking about the top line erosion. Any top line erosion was tested with shock lapse in the deal economics, and they're all contemplated in the returns that we've provided to you in the past. So we've contemplated the savings and loss in revenues and the onetime costs. They're all in the ROEs and they're all in our future projections. No surprises.

And this is Mark on the second question about systemically important financial institutions. Process-wise, there's not a lot of concrete things to point to. There certainly is constructive thinking going on around the question of which kind of institutions might be systemically significant and how to think about those companies. But it's not really clear yet where this will go. Remember that there's a process that would involve the nomination of a company for consideration by the Financial Stability Oversight Council and then a discussion with the company and an opportunity to talk about what it looks like and what that might mean and then questions going forward about exactly how any particular company might be regulated with respect to the metrics and the calibration of those metrics as a nonbank SIFI in the case of Prudential. We continue to engage with respect to discussions on the financial dynamics of insurance companies, particularly in contrast to banks, and we continue to engage on understanding products and risk. One of the sensitivities that I've talked about repeatedly is the need to understand statutory reserving practices because we have capital spread all over the place up and down our liability side because of the way we recognize our sobasic [ph] liabilities. And we continue to get opportunities to engage on that front. So Federal Reserve did put out a paper that contemplated the treatment of nonbank SIFIs. And in the paper, the statement was that they would be looked at the same way banks are looked at. But it really, I believe, was an opportunity to engage and a chance for the nonbank SIFI world in general, the insurance world and then Prudential more specifically to comment on the impact of that and how we would think about it. The specific question about how effective that might be and understanding unintended consequences are all important there. So we have the opportunity over the next couple of months to engage seriously on the issue that we've always thought was most important, which is how we would be looked at if we were a nonbank SIFI, and we'll be prepared to make a constructive comment on that framework and on the issues that we're thinking about in terms of possibly regulated as a SIFI. So the headline is a bit of uncertainty still process-wise and even with respect to whether or not we would be designated systemically important and the opportunity right now to engage on substantive issues around what it might mean if we were.

John Nadel, Sterne Agee. John M. Nadel - Sterne Agee & Leach Inc., Research Division: A couple quick ones. I realize acquisitions are all unique in terms of the financial metrics. But just generally speaking, I'm interested in how you would characterize your capacity to execute a deal with no external financing. Should we focus more on the $2 billion of what Rich referred to as readily deployable? Or could we focus on something closer to the $4 billion to $4.5 billion of total capital capacity?

It depends on where the acquisition is, right? So acquisitions made out as a holding company, you need to focus on the $2 billion to $2.3 billion. Acquisitions that can be done partially inside those regulated entities with that other capital capacity, we could absorb that capital capacity with some -- with that excess RBC. John M. Nadel - Sterne Agee & Leach Inc., Research Division: Okay, interesting. That's helpful. And then just a follow-up on your commentary, Rich, on the debt to capital or leverage ratio. I thought the 25% ratio was frankly far less critical, particularly given the DAC accounting changes that are getting implemented as of January 1. And I thought the rating agencies were focused much more on interest coverage where you guys seem to be in excellent shape. So you're telling us to focus on 25% target. I just would look for some clarification on that.

Sure. That 25.3 is before the DAC adjustment. When we reduce the equity, the 25.3, I'm not going to get it this perfect, 26.4 maybe, it goes up to 26.4 after the reduction and the denominator. Now -- but there's also -- Eric is giving me a thumbs up, maybe it's 27. I just didn't remember. Is it 27, Eric?

Yes.

I'm sorry. So it's 27. And, okay, so we'll get a little hiatus on bringing that back down by the ratings agencies we are expecting, but eventually, that's got to work back down to 2. But you make a great point. Cash flow coverage is important, but the -- when the ratio breaks through the 25, that also has a ripple effect on the cash flow coverage. Now we still have cash flow coverages under our measures that meet our standards, but there is strain on them when you push in 25 -- over 25. And that, coupled with the 27 optic, even though it's an optic, needs to be moderated. John M. Nadel - Sterne Agee & Leach Inc., Research Division: So I guess the takeaway and my takeaway, it seems to be that you get a relatively short-term period of time where the rating agencies don't respond to a higher than 25, but they expect you still nonetheless despite the accounting change to bring it back down over time?

That's correct. Can I just add one -- let me just add one point to that. In an acquisition, where there is cash flow provided by the earnings of that acquisition to cover the fixed charge coverage that you rightfully brought up, that would bump up above the 25 dependent upon the cash flow coming with the acquisition.

And it's one of the things to think about. Asset quality is very strong, liquidity is very strong, earnings power has a lot of momentum. So it's one thing to think about, and I think Rich explained it well.

Due to timing constraints, our last question will come from Joanne Smith, Scotiabank.

I have a couple questions. The first is just as a follow-up to the discussion about nonbank SIFIs. It just seems to me that there's a lot more going on than just nonbank SIFIs. It seems like every time Geithner has a press conference, he talks about all financial institutions being more regulated over time. And I was just wondering if you could talk about that a little bit more in a broader context. And then second, just on the universal life, I know that you're not concentrating heavily on Individual Life Insurance products anymore. But given the fact that there were such strong sales in the quarter, I hear a lot, everybody has heard a lot about a lot of people increasing prices because of low interest rates. And I'm wondering if you have already done that, and so now you are kind of even with those that are just now raising prices. I'm just wondering what the competitive dynamics are with respect to that and rising prices.

Let's start with the second question first. Charlie?

Sure. It's actually a great story, and that is, you have the story exactly right. In 2009, we raised prices twice, in May and November, both in term and our universal life and watched in 2010 our sales plummet as a result of that. But we wanted to retain the profitability of the product as we saw going into these markets. The reason why universal life has come back in terms of sales is that our competitors have begun to raise prices up to match ours. So that when you look at our product and you spreadsheet our product, as the financial advisors do, we have gone from third quartile to second quartile in terms of pricing and therefore, we have been able to sell more product. But we have -- again, it's a consistent story. We have been consistent with sort of our anticipation of pricing and our aggressive repricing of product for the markets. And both in Annuities and here and universal life, you've seen our competitors kind of come up to match us.

And just quickly on your other question about more regulation in general. Beyond the comments that our own Secretary of the Treasury has made, there's a broader international view that some companies fell through the cracks in a sense as a result of inadequate group supervision. And I think SIFI or not, there will be an emerging group or holding company regulatory environment that we will have to deal with, whether it comes from the franchise of our state regulators extended or from a federal entity here in the U.S. or possibly even something that may emerge from the discussions about international regulation. So I think that's a fact of life that will be a reality for us over the next few years, whether we're a SIFI or not. And, again, the most important concern that we have is that we have a regulatory regime that is sensitive to what our business models look like and what our financial dynamics are and ensure that we play on a level playing field but also balance risk and capital to make sure that the public policy needs to have stability and financial services are also met. So I would say it's something we expect, we think about, we work on and it will be part of life for us, however, it emerges in terms of group or holding company supervision, but I don't think we’ll be the end of the world. We will manage through with our own financial targets probably more aggressive than the regulatory targets anyway.

Mark, do you think that it just automatically means more capital requirements for the industry? And do you think that, that could possibly go beyond, say, a 375%, 400% RBC ratio as being the new standard?

I don't think so. I wouldn't make that kind of an abstract absolute statement. I think it means there will be careful consideration of the dynamics of the balance sheet and the stress test, which I think will ultimately be the cornerstone of the whole capital management regime. But I think it's going to be carefully considered in the context of what's really there and how it moves. So no, I don't think it's an automatic add-on to the current benchmarks.

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