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<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 2 — Recent Accounting Pronouncements <br /><br />Other-than-temporary impairments. On April 1, 2009, the Company adopted Financial Accounting Standards Board (FASB) Staff Position (FSP) No. FAS 115-2, “Recognition and Presentation of Other-Than-Temporary Impairments”. This FSP provides new guidance for evaluating whether an impairment is other than temporary for fixed maturities with declines in fair value below amortized cost. It requires assessing the Company’s intent to sell or whether it is more likely than not that the Company will be required to sell such fixed maturities before their fair values recover. If so, an impairment loss is recognized in net income for the excess of the amortized cost over fair value. The Company must also determine if it does not expect to recover the amortized cost of fixed maturities with declines in fair value (even if it does not intend to sell or will not be required to sell). In this case, the credit portion of the impairment loss is recognized in net income and the non-credit portion of an impairment loss is recognized in a separate component of shareholders’ equity. A reclassification adjustment from retained earnings to accumulated other comprehensive income is required for previously impaired fixed maturities that have a non-credit loss as of the date of adoption, less related tax effects. <br /><br />The cumulative effect of adoption increased the Company’s retained earnings with an offsetting decrease to accumulated other comprehensive income of $18 million, with no overall change to shareholders’ equity. See Note 9 for information on the Company’s other-than-temporary impairments including additional required disclosures.<br /> <br />Noncontrolling interests in subsidiaries. Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51," through retroactive restatement of prior financial statements and reclassified its $6 million of noncontrolling interest as of January 1, 2009 and 2008 from Accounts payable, accrued expenses and other liabilities to Noncontrolling interest in total equity. In addition, for the six months ended June 30, 2008, net income of $1 million attributable to the noncontrolling interest has been reclassified to be included in net income, with a reduction to net income to determine net income attributable to the Company’s shareholders (“shareholders’ net income”). <br /><br />Earnings per share. Effective January 1, 2009, the Company adopted FSP EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities." This FSP requires unvested restricted stock awards that contain rights to nonforfeitable dividends to be included in the denominator of both basic and diluted earnings per share (“EPS”) calculations. Prior period EPS data have been restated to reflect the adoption of this FSP. See Note 4 for the effects of this FSP on previously reported EPS amounts.<br /><br />Business combinations. Effective January 1, 2009, the Company adopted SFAS No. 141 (revised 2007, referred to as SFAS No. 141R), "Business Combinations”. This standard requires fair value measurements for all future acquisitions, including contingent purchase price and certain contingent assets or liabilities of the entity to be acquired; requires acquisition related and restructuring costs to be expensed as incurred and requires changes in tax items after the acquisition date to be reported in income tax expense. There were no effects to the Company’s Consolidated Financial Statements at adoption. <br /><br />Derivatives disclosures. Effective January 1, 2009, the Company adopted SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” This standard expands required disclosures to include the purpose for using derivative instruments, their accounting treatment and related effects on financial condition, results of operations and liquidity. See Note 10 for information on the Company’s derivative financial instruments including these additional required disclosures. <br /><br />Fair value measurements.  Effective January 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements.”  This standard expands disclosures about fair value measurements and clarifies how to measure fair value by focusing on the price that would be received when selling an asset or paid to transfer a liability (exit price). In addition, the FASB amended SFAS No. 157 in 2008 to provide additional guidance for determining the fair value of a financial asset when the market for that instrument is not active. See Note 8 for information on the Company’s fair value measurements. <br /><br />The Company carries certain financial instruments at fair value in the financial statements including approximately $12.7 billion in invested assets at June 30, 2009.  The Company also carries derivative instruments at fair value, including assets and liabilities for reinsurance contracts covering guaranteed minimum income benefits (GMIB assets and liabilities) under certain variable annuity contracts issued by other insurance companies and related retrocessional contracts. The Company also reports separate account assets at fair value; however, changes in the fair values of these assets accrue directly to policyholders and are not included in the Company’s revenues and expenses.  At the adoption of SFAS No. 157, there were no effects to the Company’s measurements of fair values for financial instruments other than for GMIB assets and liabilities discussed below. In addition, there were no effects to the Company’s measurements of financial assets of adopting the 2008 amendment to SFAS No. 157.<br /> <br />At adoption, the Company was required to change certain assumptions used to estimate the fair values of GMIB assets and liabilities. Because there is no market for these contracts, the assumptions used to estimate their fair values at adoption were determined using a hypothetical market participant’s view of exit price, rather than using historical market data and actual experience to establish the Company’s future expectations.  For many of these assumptions, there is limited or no observable market data so determining an exit price requires the Company to exercise significant judgment and make critical accounting estimates. On adoption, the Company recorded a charge of $131 million after-tax, net of reinsurance ($202 million pre-tax), in Run-off Reinsurance.<br /><br />The Company’s results of operations related to this business are expected to continue to be volatile in future periods because underlying assumptions will be based on current market-observable inputs which will likely change each period.  See Note 8 for additional information.<br /><br />In the first quarter of 2009, the Company adopted the provisions of SFAS No. 157 for non-financial assets and liabilities (such as intangible assets, property and equipment and goodwill) that are required to be measured at fair value on a periodic basis (such as at impairment).  The effect on the Company’s periodic fair value measurements for non-financial assets and liabilities was not material.<br /><br />In addition, the Company adopted recent amendments to SFAS No. 157 that provide additional guidance in determining fair value when the volume and level of activity for an asset or liability have significantly decreased and in identifying transactions that are not orderly. There were no effects to the Company’s Consolidated Financial Statements at adoption. <br /><br />Variable interest entities. In 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” which amended existing guidance to require periodic qualitative analyses to determine whether a variable interest entity must be consolidated by the Company. In addition, this standard requires the Company to disclose any significant judgments and assumptions made in determining whether it must consolidate a variable interest entity. Any changes in consolidated entities resulting from these requirements must be applied through retrospective restatement of prior financial statements beginning in 2010. The Company is presently evaluating the impact of these new requirements.<br /><br />Transfers of financial assets. In 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140,” to provide greater transparency about transfers of financial assets. This guidance changes the requirements for recognizing the transfer of financial assets and requires additional disclosures about a transferor’s continuing involvement in transferred financial assets. The guidance also eliminates the concept of a “qualifying special purpose entity” when assessing transfers of financial instruments. The recognition and measurement provisions of this guidance must be applied to transfers that occur on or after January 1, 2010. The Company is presently evaluating the impact of these new requirements.</p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 3 — Acquisitions and Dispositions <br /><br />The Company may from time to time acquire or dispose of assets, subsidiaries or lines of business.  Significant transactions are described below.<br /><br />Great-West Healthcare Acquisition.  On April 1, 2008, the Company acquired the Healthcare division of Great-West Life and Annuity, Inc. (“Great-West Healthcare” or the “acquired business”) through 100% indemnity reinsurance agreements and the acquisition of certain affiliates and other assets and liabilities of Great-West Healthcare. The purchase price of approximately $1.5 billion consisted of a payment to the seller of approximately $1.4 billion for the net assets acquired and the assumption of net liabilities under the reinsurance agreement of approximately $0.1 billion.   Great-West Healthcare primarily sells medical plans on a self-funded basis with stop loss coverage to select and regional employer groups.  Great-West Healthcare’s offerings also include the following specialty products:  stop loss, life, disability, medical, dental, vision, prescription drug coverage, and accidental death and dismemberment insurance.  The acquisition, which was accounted for as a purchase, was financed through a combination of cash and the issuance of both short and long-term debt.<br /><br />In the first quarter of 2009, the Company completed its allocation of the total purchase price to the tangible and intangible net assets acquired based on management's estimates of their fair values without material changes from December 31, 2008. <br /></p></font></div><div><font size="2"><p>The results of Great-West Healthcare are included in the Company’s Consolidated Financial Statements from the date of acquisition.<br /><br />The following table presents selected unaudited pro forma information for the Company assuming the acquisition had occurred as of January 1, 2008.  The pro forma information does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of that date or what such results will be for any future periods.        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>(Unaudited)</b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="34"><font size="2"> </font></td><td colspan="2" width="94" height="34" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Six Months Ended June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2"><i>(In millions, except per share amounts)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">Total revenues</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 9,800 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">Shareholders' income from continuing operations</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 349 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">Shareholders' net income</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 351 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">Earnings per share:</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">  Shareholders' income from continuing operations</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">    Basic</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1.24 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">    Diluted</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1.23 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">  Shareholders' net income</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">    Basic</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1.25 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="607" align="left" height="17"><font size="2">    Diluted</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1.24 </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 4 — Earnings Per Share<br /><br />Basic and diluted earnings per share were computed as follows:<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="2" width="95" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Effect of </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><i>(In millions, except per share amounts)</i></font></td><td colspan="2" width="118" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Basic</b></font></td><td colspan="2" width="95" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Dilution</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Diluted</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><b>Three Months Ended June 30,</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="right" height="17"><font size="2"><b>2009 </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Shareholders' income from continuing operations</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 435 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 435 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="16"><font size="2">Shares (in thousands):</font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Weighted average</font></td><td style="background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 274,086 </font></td><td style="background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 274,086 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Options</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 969 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 969 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Total shares</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 274,086 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 969 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 275,055 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>EPS</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1.59 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (0.01)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1.58 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="right" height="17"><font size="2"><b>2008 </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Shareholders' income from continuing operations</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 273 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 273 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Shares (in thousands):</font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Weighted average</font></td><td style="background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 280,070 </font></td><td style="background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 280,070 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Options</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,850 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,850 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="16"><font size="2"><b>Total shares</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 280,070 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,850 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 281,920 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>EPS</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 0.97 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 0.97 </font></td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="2" width="95" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Effect of </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><i>(In millions, except per share amounts)</i></font></td><td colspan="2" width="118" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Basic</b></font></td><td colspan="2" width="95" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Dilution</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Diluted</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2"><b>Six Months Ended June 30,</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="right" height="17"><font size="2"><b>2009 </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Shareholders' income from continuing operations</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2"><b>$</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 642 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 642 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Shares (in thousands):</font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Weighted average</font></td><td style="background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 273,342 </font></td><td style="background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 273,342 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Options</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 623 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 623 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Total shares</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 273,342 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 623 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 273,965 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>EPS</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2"><b>$</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 2.35 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2">(0.01)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 2.34 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="right" height="17"><font size="2"><b>2008 </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Shareholders' income from continuing operations</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 328 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 328 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Shares (in thousands):</font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Weighted average</font></td><td style="background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 280,818 </font></td><td style="background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 280,818 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="17"><font size="2">Options </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,220 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,220 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>Total shares</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 280,818 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 2,220 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 283,038 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="425" align="left" height="18"><font size="2"><b>EPS</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="43" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1.17 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="20" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (0.01)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1.16 </font></td></tr></table></div><div><font size="2"><p>As described in Note 2, effective in 2009, the Company adopted FSP EITF 03-06-1, which requires the Company’s unvested restricted stock awards to be included in weighted average shares instead of being considered a common stock equivalent. Prior period share information has been restated as follows. <br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td colspan="7" width="357" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Three Months Ended June 30, 2008</b></font></td></tr><tr><td height="17" width="355" align="left"><font size="2"> </font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Basic</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Diluted</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="34"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="34"><font size="2"><i> </i></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As originally reported</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As adjusted</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As originally reported</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As adjusted</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="left" height="18"><font size="2">Shareholders' income from continuing operations</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 0.98 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 0.97 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 0.98 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 0.97 </font></td></tr><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td colspan="7" width="357" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Six Months Ended June 30, 2008</b></font></td></tr><tr><td height="17" width="355" align="left"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Basic</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Diluted</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="34"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="34"><font size="2"><i> </i></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As originally reported</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="right" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As adjusted</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As originally reported</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="34"><font size="2"><b>As adjusted</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="left" height="18"><font size="2">Shareholders' income from continuing operations</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1.18 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1.17 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1.17 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1.16 </font></td></tr></table></div><div><font size="2"><p>The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect would have increased diluted earnings per share (antidilutive) as their exercise price was greater than the average share price of the Company's common stock for the period.<br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="396" align="left" height="17"><font size="2"><i> </i></font></td><td colspan="2" width="148" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Three Months Ended</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="34" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="148" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="396" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="148" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="34" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="148" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="396" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2"><b>2009 </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2"><b>2008 </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="34" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2"><b>2009 </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="396" align="left" height="17"><font size="2">Antidilutive options</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2">9.9 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2">4.9 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="34" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2">10.6 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="74" align="center" height="17"><font size="2">4.3 </font></td></tr></table></div><div><font size="2"><p>The Company held 78,223,221 shares of common stock in Treasury as of June 30, 2009, and 75,590,075 shares as of June 30, 2008.        </p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 5 — Health Care Medical Claims Payable<br /><br />Medical claims payable for the Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not yet reported, those which have been reported but not yet paid (reported claims in process) and other medical expense payable, which primarily comprises accruals for provider incentives and other amounts payable to providers. Incurred but not yet reported comprises the majority of the reserve balance as follows:<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Incurred but not yet reported</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 808 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 782 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Reported claims in process</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 116 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 114 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="16"><font size="2">Other medical expense payable</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="16"><font size="2"> 23 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="16"><font size="2"> 28 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Medical claims payable</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 947 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 924 </font></td></tr></table></div><div><font size="2"><p>Activity in medical claims payable was as follows:<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="18"><font size="2"> </font></td><td colspan="4" width="188" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>For the period ended</b></font></td></tr><tr><td height="18" width="523" align="left"><font size="2"> </font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Balance at January 1,</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 924 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 975 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Less: Reinsurance and other amounts recoverable</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 211 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 258 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Balance at January 1, net</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 713 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 717 </font></td></tr><tr><td height="3" width="523" align="left"><font size="2"> </font></td><td height="3" width="19" align="right"><font size="2"> </font></td><td height="3" width="75" align="right"><font size="2"> </font></td><td height="3" width="19" align="right"><font size="2"> </font></td><td height="3" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Acquired April 1, 2008 net</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> - </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 90 </font></td></tr><tr><td height="5" width="523" align="left"><font size="2"> </font></td><td height="5" width="19" align="right"><font size="2"> </font></td><td height="5" width="75" align="right"><font size="2"> </font></td><td height="5" width="19" align="right"><font size="2"> </font></td><td height="5" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="16" width="523" align="left"><font size="2">Incurred claims related to:</font></td><td height="16" width="19" align="right"><font size="2"> </font></td><td height="16" width="75" align="right"><font size="2"> </font></td><td height="16" width="19" align="right"><font size="2"> </font></td><td height="16" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Current year</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 3,563 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 7,312 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Prior years</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (35)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (60)</font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Total incurred</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,528 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 7,252 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Paid claims related to:</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Current year</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 2,867 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 6,716 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Prior years</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 625 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 630 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">   Total paid</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,492 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 7,346 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Ending Balance, net</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 749 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 713 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Add: Reinsurance and other amounts recoverable</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 198 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 211 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="523" align="left" height="16"><font size="2">Ending Balance</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="16"><font size="2"> 947 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="16"><font size="2"> 924 </font></td></tr></table></div><div><font size="2"><p>Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for minimum premium products and certain administrative services only business where the right of offset does not exist. See Note 11 for additional information on reinsurance. For the six months ended June 30, 2009, actual experience differed from the Company’s key assumptions resulting in favorable incurred claims related to prior years’ medical claims payable of $35 million, or 0.5% of the current year incurred claims as reported for the year ended December 31, 2008. Actual completion factors resulted in a reduction in medical claims payable of $15 million, or 0.2% of the current year incurred claims as reported for the year ended December 31, 2008 for the insured book of business. Actual medical cost trend resulted in a reduction in medical claims payable of $20 million, or 0.3% of the current year incurred claims as reported for the year ended December 31, 2008 for the insured book of business.<br /><br />For the year ended December 31, 2008, actual experience differed from the Company's key assumptions, resulting in favorable incurred claims related to prior years’ medical claims payable of $60 million, or 0.9% of the current year incurred claims as reported for the year ended December 31, 2007. Actual completion factors resulted in a reduction of the medical claims payable of $29 million, or 0.4% of the current year incurred claims as reported for the year ended December 31, 2007 for the insured book of business. Actual medical cost trend resulted in a reduction of the medical claims payable of $31 million, or 0.5% of the current year incurred claims as reported for the year ended December 31, 2007 for the insured book of business.<br /><br />The favorable impact in 2009 and 2008 relating to completion factors and medical cost trend variances is primarily due to the release of the provision for moderately adverse conditions, which is a component of the assumptions for both completion factors and medical cost trend, established for claims incurred related to prior years. This release was substantially offset by the provision for moderately adverse conditions established for claims incurred related to the current year.<br /><br />The corresponding impact of prior year development on shareholders’ net income was not material for the three months and six months ended June 30, 2009 and 2008. The change in the amount of the incurred claims related to prior years in the medical claims payable liability does not directly correspond to an increase or decrease in the Company's shareholders’ net income recognized for the following reasons:<br /><br />First, due to the nature of the Company's retrospectively experience-rated business, only adjustments to medical claims payable on accounts in deficit affect shareholders’ net income. An increase or decrease to medical claims payable on accounts in deficit, in effect, accrues to the Company and directly impacts shareholders’ net income. An account is in deficit when the accumulated medical costs and administrative charges, including profit charges, exceed the accumulated premium received. Adjustments to medical claims payable on accounts in surplus accrue directly to the policyholder with no impact on the Company’s shareholders’ net income. An account is in surplus when the accumulated premium received exceeds the accumulated medical costs and administrative charges, including profit charges.<br /><br />Second, the Company consistently recognizes the actuarial best estimate of the ultimate liability within a level of confidence, as required by actuarial standards of practice, which require that the liabilities be adequate under moderately adverse conditions. As the Company establishes the liability for each incurral year, the Company ensures that its assumptions appropriately consider moderately adverse conditions. When a portion of the development related to the prior year incurred claims is offset by an increase deemed appropriate to address moderately adverse conditions for the current year incurred claims, the Company does not consider that offset amount as having any impact on shareholders’ net income.<br /><br />The determination of liabilities for Health Care medical claims payable required the Company to make critical accounting estimates. See Note 2(O) to the Consolidated Financial Statements in the Company’s 2008 Form 10-K.</p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 6 — Cost Reduction<br /><br />During the second quarter of 2009, the Company continued its previously announced comprehensive review of its ongoing businesses. As a result, in the second quarter of 2009 the Company recognized in other operating expenses a total charge of $14 million pre-tax ($9 million after-tax), for severance resulting from reductions of 465 positions in its workforce. The Company expects to pay substantially all of this charge in cash during 2009. The Health Care segment reported substantially all of this charge.<br /><br />The following table presents the activity related to the cost reduction initiatives begun in the fourth quarter of 2008:<br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="453" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>Severance</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>Real estate</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>Total</b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="453" align="left" height="17"><font size="2">Balance, January 1, 2009</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 44 </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 11 </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 55 </font></td></tr><tr><td height="17" width="453" align="left"><font size="2">Less: Payments on 2008 charges</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (21)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (2)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (23)</font></td></tr><tr><td height="17" width="453" align="left"><font size="2">  Subtotal - 2008 cost reduction actions</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 23 </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 9 </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 32 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="453" align="left" height="17"><font size="2">Add: Second quarter 2009 charge</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 14 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 14 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="453" align="left" height="18"><font size="2">Balance, June 30, 2009</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 37 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="left" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 9 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="left" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 46 </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 7 ― Guaranteed Minimum Death Benefit Contracts<br /><br />The Company’s reinsurance operations, which were discontinued in 2000 and are now an inactive business in run-off mode, reinsured guaranteed minimum death benefits (GMDB), also known as variable annuity death benefits (VADBe), under certain variable annuities issued by other insurance companies.  These variable annuities are essentially investments in mutual funds combined with a death benefit.  The Company has equity and other market exposures as a result of this product. In periods of declining equity markets and in periods of flat equity markets following a decline, the Company’s liabilities for these guaranteed minimum death benefits increase. Conversely, in periods of rising equity markets, the Company’s liabilities for these guaranteed minimum death benefits decrease.<br /><br />In order to substantially reduce the equity market exposures relating to guaranteed minimum death benefit contracts, the Company operates a dynamic hedge program (GMDB equity hedge program), using exchange-traded futures contracts. The hedge program is designed to substantially offset both positive and negative impacts of changes in equity markets on the GMDB liability. The hedge program involves detailed, daily monitoring of equity market movements and rebalancing the futures contracts within established parameters. While the hedge program is actively managed, it may not exactly offset changes in the GMDB liability due to, among other things, divergence between the performance of the underlying mutual funds and the hedge instruments, high levels of volatility in the equity markets, and differences between actual contractholder behavior and what is assumed. The performance of the underlying mutual funds compared to the hedge instruments is further impacted by a time lag, since the data is not reported and incorporated into the required hedge position on a real time basis. Although this hedge program does not qualify for GAAP hedge accounting, it is an economic hedge because it is designed and operated to substantially reduce equity market exposures resulting from this product. The results of the futures contracts are included in other revenue and amounts reflecting corresponding changes in liabilities for these GMDB contracts are included in benefits and expenses, consistent with GAAP when a premium deficiency exists.<br /><br />The GMDB reinsurance business is considered premium deficient because the expected present value of future claims and expenses exceeds the expected present value of future premiums and investment income using revised assumptions based on actual and expected experience. The Company performs a reserve review on a quarterly basis using current market conditions and assumptions. Under premium deficiency accounting if the recorded reserve is determined insufficient, an increase to the reserve is reflected as a charge to current period income. Consistent with GAAP, the Company does not recognize gains on premium deficient long duration products. <br /><br />The Company had future policy benefit reserves for GMDB contracts of $1.5 billion as of June 30, 2009, and $1.6 billion as of December 31, 2008.   The determination of liabilities for GMDB requires the Company to make critical accounting estimates.  The Company estimates its liabilities for GMDB exposures using a complex internal model, run using many scenarios, and based on assumptions regarding lapse, future partial surrenders, mortality, interest rates (mean investment performance and discount rate) and volatility. Lapse refers to the full surrender of an annuity prior to a contractholder’s death. Future partial surrender refers to the fact that most contractholders have the ability to withdraw substantially all of their mutual fund investments while retaining the death benefit coverage in effect at the time of the withdrawal. Mean investment performance refers to market rates to be earned over the life of the GMDB equity hedge program, and market volatility refers to market fluctuation. These assumptions are based on the Company’s experience and future expectations over the long-term period, consistent with the long-term nature of this product. The Company regularly evaluates these assumptions and changes its estimates if actual experience or other evidence suggests that assumptions should be revised.  If actual experience differs from the assumptions (including lapse, future partial surrenders, mortality, interest rates and volatility) used in estimating these liabilities, the result could have a material adverse effect on the Company’s consolidated results of operations, and in certain situations, could have a material adverse effect on the Company’s financial condition.<br /><br />The following provides information about the Company’s reserving methodology and assumptions for GMDB as of June 30, 2009:<br /><br />The reserve represents estimates of the present value of net amounts expected to be paid, less the present value of net future premiums.  Included in net amounts expected to be paid is the excess of the guaranteed death benefits over the values of the contractholders’ accounts (based on underlying equity and bond mutual fund investments).<br />The reserve includes an estimate for future partial surrenders that essentially lock in the death benefit for a particular policy based on annual election rates that vary from 0-27% depending on the net amount at risk for each policy and whether surrender charges apply.<br />The mean investment performance assumption is 5% considering the Company’s GMDB equity hedge program using futures contracts.  This is reduced by fund fees ranging from 1-3% across all funds.  The results of futures contracts are reflected in the liability calculation as a component of investment returns.<br />The volatility assumption is based on a review of historical monthly returns for each key index (e.g. S&P 500) over a period of at least ten years. Volatility represents the dispersion of historical returns compared to the average historical return (standard deviation) for each index. The assumption is 16-30%, varying by equity fund type; 4-10%, varying by bond fund type; and 2% for money market funds. These volatility assumptions are used along with the mean investment performance assumption to project future return scenarios.<br />The discount rate is 5.75%.<br />The mortality assumption is 70-75% of the 1994 Group Annuity Mortality table, with 1% annual improvement beginning January 1, 2000.<br />The lapse rate assumption is 0-21%, depending on contract type, policy duration and the ratio of the net amount at risk to account value.<br />The reserve includes a provision for future policy maintenance and hedging expenses.<br /><br />Although the year to date results include a first quarter charge of $73 million pre-tax ($47 million after-tax) to strengthen GMDB reserves following an analysis of experience, no additional reserve strengthening was required for GMDB during the second quarter of 2009, primarily due to the stabilization and recovery of equity markets. The components of the first quarter charge were:<br /><br />adverse impacts of overall market declines of $50 million pre-tax ($32 million after-tax). This is comprised of (a) $39 million pre-tax ($25 million after-tax) primarily related to the provision for future partial surrenders, and (b) $11 million pre-tax ($7 million after-tax) related to declines in the values of contractholders’ non-equity investments such as bond funds, neither of which is included in the GMDB equity hedge program;<br />adverse volatility-related impacts of $11 million pre-tax ($7 million after-tax) due to turbulent equity market conditions, including higher than expected claims and the performance of the diverse mix of equity fund investments held by contractholders being different than expected; and<br />adverse interest rate impacts of $12 million pre-tax ($8 million after-tax). Interest rate risk is not covered by the GMDB equity hedge program, and the interest rate returns on the futures contracts were less than the Company’s long-term assumption for mean investment performance.<br /><br />Activity in future policy benefit reserves for the GMDB business was as follows:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="18"><font size="2"> </font></td><td colspan="4" width="188" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>For the period ended</b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="18"><font size="2"> </font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Balance at January 1</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,609 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 848 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Add: Unpaid Claims</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 34 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 21 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Less: Reinsurance and other amounts recoverable</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 83 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 19 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="16"><font size="2">Balance at January 1, net</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,560 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 850 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Add: Incurred benefits</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 50 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 822 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Less: Paid benefits</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 100 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 112 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Ending balance, net</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,510 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,560 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Less: Unpaid Claims</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 42 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 34 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Add: Reinsurance and other amounts recoverable</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 74 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 83 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="18"><font size="2">Ending balance</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1,542 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1,609 </font></td></tr></table></div><div><font size="2"><p>Benefits paid and incurred are net of ceded amounts.  Incurred benefits reflect the favorable or unfavorable impact of a rising or falling equity market on the liability, and include the charges discussed above.  As discussed below, losses or gains have been recorded in other revenues as a result of the GMDB equity hedge program to reduce equity market exposures.</p></font></div><div><font size="2"><p>As of June 30, 2009, the aggregate value of the underlying mutual fund investments was $15.8 billion.  The death benefit coverage in force as of that date (representing the amount that the Company would have to pay if all of the approximately 615,000 contractholders had died on that date) was $9.6 billion. As of December 31, 2008, the aggregate value of the underlying mutual fund investments was $16.3 billion. The death benefit coverage in force as of that date (representing the amount that the Company would have to pay if all of the approximately 650,000 contractholders had died on that date) was $11.1 billion.  The death benefit coverage in force represents the excess of the guaranteed benefit amount over the value of the underlying mutual fund investments.<br /><br />As discussed above, the Company operates a GMDB equity hedge program to substantially reduce the equity market exposures of this business by selling exchange-traded futures contracts, which are expected to rise in value as the equity market declines and decline in value as the equity market rises. In addition, the Company uses foreign currency futures contracts to reduce the international equity market and foreign currency risks associated with this business. The notional amount of futures contract positions held by the Company at June 30, 2009 was $1.3 billion.  The Company recorded in other revenues pre-tax losses of $188 million for the three months ended June 30, 2009 and $71 million for the six months ended June 30, 2009, and pre-tax gains of $6 million for the three months ended June 30, 2008 and $48 million for the six months ended June 30, 2008.<br /><br />The Company has also written reinsurance contracts with issuers of variable annuity contracts that provide annuitants with certain guarantees related to minimum income benefits (GMIB). All reinsured GMIB policies also have a GMDB benefit reinsured by the Company. See Note 8 for further information.</p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 8 ― Fair Value Measurements<br /><br />The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives.  Other financial instruments are periodically measured at fair value, such as when impaired, or, for commercial mortgage loans, when classified as “held for sale.”<br /><br />Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date.  A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.<br /><br />Fair values are based on quoted market prices when available.  When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality.  In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.  These valuation techniques involve some level of estimation and judgment by the Company which becomes significant with increasingly complex instruments or pricing models.  Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used.<br /><br />The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.  The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement.  For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).   The levels of the fair value hierarchy are as follows:<br /><br />Level 1 – Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.<br />Level 2 –  Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument.  Such inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.<br />Level 3 – Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.<br />Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis<br /><br />The following tables provide information as of June 30, 2009 and December 31, 2008 about the Company’s financial assets and liabilities measured at fair value on a recurring basis.  Similar disclosures for separate account assets, which are also recorded at fair value on the Company’s Consolidated Balance Sheets, are provided separately as gains and losses related to these assets generally accrue directly to policyholders.<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="334" align="right" height="17"><font size="2"><b>June 30, 2009</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2"><i>(In millions)</i></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"><i> </i></font></td><td colspan="2" width="94" height="15" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Quoted Prices in Active Markets for Identical Assets(Level 1)</b></font></td><td colspan="2" width="94" height="15" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Other Observable Inputs(Level 2)</b></font></td><td colspan="2" width="94" height="15" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Unobservable Inputs(Level 3)</b></font></td><td colspan="2" width="94" height="15" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Total</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Financial assets at fair value:</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Fixed maturities:</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Federal government and agency </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 45 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 546 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 592 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  State and local government</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,478 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,478 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Foreign government</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 960 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 13 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 973 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Corporate </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 7,357 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 486 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 7,843 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Federal agency mortgage-backed </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 35 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 35 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Other mortgage-backed </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 116 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 7 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 123 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Other asset-backed </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 52 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 399 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 451 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Total fixed maturities</font></td><td style="background-color: #FFFFFF;" width="28" align="right" height="17"><font size="2"> (1)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 45 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 11,544 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 906 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 12,495 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Equity securities </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 7 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 69 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 17 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 93 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">    Subtotal</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 52 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 11,613 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 923 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 12,588 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Short-term investments</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 105 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 105 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">GMIB assets</font></td><td style="background-color: #FFFFFF;" width="28" align="right" height="15"><font size="2"> (2)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 685 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 685 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Other derivative assets</font></td><td style="background-color: #FFFFFF;" width="28" align="right" height="15"><font size="2"> (3)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 21 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 21 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Total financial assets at fair value, excluding separate accounts</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 52 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 11,739 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,608 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 13,399 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Financial liabilities at fair value:</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">GMIB liabilities </font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 1,224 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 1,224 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Other derivative liabilities</font></td><td style="background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 19 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 19 </font></td></tr><tr><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Total financial liabilities at fair value</font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="28" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 19 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,224 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,243 </font></td></tr><tr><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="28" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="738"><font size="2"><i>(1) Fixed maturities includes $174 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $4 million of appreciation for securities classified in Level 3.</i></font></td></tr><tr></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="738"><font size="2"><i>(2) The Guaranteed Minimum Income Benefit (GMIB) assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts. The assets are net of a liability of $14 million for the future cost of reinsurance.</i></font></td></tr><tr></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="738"><font size="2"><i>(3) Other derivative assets includes $17 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $4 million of interest rate swaps not designated as accounting hedges.</i></font></td></tr><tr></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">December 31, 2008</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"><i> </i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Quoted Prices in Active Markets for Identical Assets(Level 1)</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Other Observable Inputs(Level 2)</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Unobservable Inputs(Level 3)</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Total</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Financial assets at fair value:</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Fixed maturities:</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Federal government and agency </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 38 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 724 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 762 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  State and local government</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,486 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,486 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Foreign government</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 923 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 21 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 944 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Corporate </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6,526 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 330 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6,856 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Federal agency mortgage-backed </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 37 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 37 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Other mortgage-backed </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 121 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 125 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">  Other asset-backed </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 57 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 514 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 571 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="17"><font size="2">Total fixed maturities</font></td><td style="background-color: #FFFFFF;" width="29" align="right" height="17"><font size="2"> (1)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 38 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 10,874 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 869 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 11,781 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Equity securities </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 8 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 84 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 20 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 112 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">    Subtotal</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 46 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 10,958 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 889 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 11,893 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Short-term investments</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 236 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 236 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">GMIB assets</font></td><td style="background-color: #FFFFFF;" width="29" align="right" height="15"><font size="2"> (2)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 953 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 953 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Other derivative assets</font></td><td style="background-color: #FFFFFF;" width="29" align="right" height="15"><font size="2"> (3)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 45 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 45 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Total financial assets at fair value, excluding separate accounts</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 46 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 11,239 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,842 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 13,127 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Financial liabilities at fair value:</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">GMIB liabilities </font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 1,757 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 1,757 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2">Other derivative liabilities</font></td><td style="background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 36 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 36 </font></td></tr><tr><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="16"><font size="2">Total financial liabilities at fair value</font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="29" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 36 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,757 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 1,793 </font></td></tr><tr><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="334" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="29" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="15"><font size="2"> </font></td></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="739"><font size="2"><i>(1) Fixed maturities includes $514 million of net appreciation required to adjust future policy benefits for run-off settlement annuity business including $111 million of appreciation for securities classified in Level 3.</i></font></td></tr><tr></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="739"><font size="2"><i>(2) The Guaranteed Minimum Income Benefit (GMIB) assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts. The assets are net of a liability of $17 million for the future cost of reinsurance.</i></font></td></tr><tr></tr><tr><td align="left" colspan="10" height="30" rowspan="2" style="background-color: #FFFFFF;" width="739"><font size="2"><i>(3) Other derivative assets include $40 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $5 million of interest rate swaps not designated as accounting hedges.</i></font></td></tr></table></div><div><font size="2"><p>Level 1 Financial Assets<br /><br />Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company’s investment assets are classified in this category. <br /><br />Level 2 Financial Assets and Financial Liabilities<br /><br />Fixed maturities and equity securities.  Approximately 92% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities and preferred stocks do not trade daily, fair values are often derived using recent trades of securities with similar features and characteristics.  When recent trades are not available, pricing models are used to determine these prices.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.<br /><br />Typical inputs and assumptions to pricing models include, but are not limited to, benchmark yields, reported trades, broker-dealer quotes, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.<br /><br />Short-term investments. Short-term investments are carried at fair value, which approximates cost. On a regular basis the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. <br /><br />Other derivatives. Amounts classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts.  Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices.  Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties, and determined that no adjustment for credit risk was required as of June 30, 2009 or December 31, 2008.  The nature and use of these other derivatives are described in Note 10.<br /><br />Level 3 Financial Assets and Financial Liabilities<br /><br />The Company classifies certain newly issued, privately placed, complex or illiquid securities, as well as assets and liabilities relating to guaranteed minimum income benefits in Level 3.<br /><br />Fixed maturities and equity securities.  Approximately 7% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category, including:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Mortgage and asset-backed securities</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 406 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 518 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Primarily private corporate bonds</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 411 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 270 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="16"><font size="2">Subordinated loans and private equity investments</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="16"><font size="2"> 106 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="16"><font size="2"> 101 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 923 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 889 </font></td></tr></table></div><div><font size="2"><p>Fair values of mortgage and asset-backed securities and corporate bonds are determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices and spreads, liquidity and economic events.  For mortgage and asset-backed securities, inputs and assumptions to pricing may also include collateral attributes and prepayment speeds.  Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research as well as the issuer’s financial statements in its evaluation. Subordinated loans and private equity investments are valued at transaction price in the absence of market data indicating a change in the estimated fair values.<br /> </p></font></div><div><font size="2"><p>Guaranteed minimum income benefit contracts.  Because cash flows of the GMIB liabilities and assets are affected by equity markets and interest rates but are without significant life insurance risk and are settled in lump sum payments, the Company reports these liabilities and assets as derivatives at fair value. The Company estimates the fair value of the assets and liabilities for GMIB contracts using assumptions regarding capital markets (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments), future annuitant and retrocessionaire behavior (including mortality, lapse, annuity election rates and retrocessional credit), as well as risk and profit charges. At adoption of SFAS No. 157 in 2008, the Company updated assumptions to reflect those that the Company believes a hypothetical market participant would use to determine a current exit price for these contracts, and recorded a charge to shareholders’ net income as described in Note 2. As certain assumptions used to estimate fair values for these contracts are largely unobservable, the Company classifies GMIB assets and liabilities in Level 3. The Company considered the following in determining the view of a hypothetical market participant:<br /><br />that the most likely transfer of these assets and liabilities would be through a reinsurance transaction with an independent insurer having a market capitalization and credit rating similar to that of the Company; and<br />that because this block of contracts is in run-off mode, an insurer looking to acquire these contracts would have similar existing contracts with related administrative and risk management capabilities.<br /><br />These GMIB assets and liabilities are estimated using a complex internal model run using many scenarios to determine the present value of net amounts expected to be paid, less the present value of net future premiums expected to be received adjusted for risk and profit charges that the Company estimates a hypothetical market participant would require to assume this business.   Net amounts expected to be paid include the excess of the expected value of the income benefits over the values of the annuitants’ accounts at the time of annuitization. Generally, market return, interest rate and volatility assumptions are based on market observable information.  Assumptions related to annuitant behavior reflect the Company’s belief that a hypothetical market participant would consider the actual and expected experience of the Company as well as other relevant and available industry resources in setting policyholder behavior assumptions.   The significant assumptions used to value the GMIB assets and liabilities as of June 30, 2009 were as follows:<br /><br />        The market return and discount rate assumptions are based on the market-observable LIBOR swap curve.<br />        The projected interest rate used to calculate the reinsured income benefits is indexed to the 7-year Treasury Rate at the time of annuitization (claim interest rate) based on contractual terms.  That rate was 3.19% at June 30, 2009 and must be projected for future time periods. These projected rates vary by economic scenario and are determined by an interest rate model using current interest rate curves and the prices of instruments available in the market including various interest rate caps and zero-coupon bonds. For a subset of the business, there is a contractually guaranteed floor of 3% for the claim interest rate.<br />        The market volatility assumptions for annuitants’ underlying mutual fund investments that are modeled based on the S&P 500, Russell 2000 and NASDAQ Composite are based on the market-implied volatility for these indices for three to seven years grading to historical volatility levels thereafter. For the remaining 57% of underlying mutual fund investments modeled based on other indices (with insufficient market-observable data), volatility is based on the average historical level for each index over the past 10 years.  Using this approach, volatility ranges from 16% to 35% for equity funds, 4% to 11% for bond funds and 1% to 2% for money market funds.<br />        The mortality assumption is 70% of the 1994 Group Annuity Mortality table, with 1% annual improvement beginning January 1, 2000.<br />        The lapse rate assumption varies by contract from 2% to 23% and depends on the time since contract issue, the relative value of the guarantee and the differing experience by issuing company of the underlying variable annuity contracts.<br />        The annuity election rate assumption varies by contract and depends on the annuitant’s age, the relative value of the guarantee, whether a contractholder has had a previous opportunity to elect the benefit and the differing experience by issuing company of the underlying variable annuity contracts.  Immediately after the expiration of the waiting period, the assumed probability that an individual will annuitize their variable annuity contract is up to 80%.  For the second and subsequent annual opportunities to elect the benefit, the assumed probability of election is up to 30%.  With respect to the second and subsequent election opportunities, actual data is just beginning to emerge for the Company as well as the industry and the estimates are based on this limited data.<br />        The risk and profit charge assumption is based on the Company’s estimate of the capital and return on capital that would be required by a hypothetical market participant.<br /><br />In addition, the company has considered other assumptions related to model, expense and non-performance risk in calculating the GMIB liability.<br /><br />The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities by considering how a hypothetical market participant would set assumptions at each valuation date.  Capital markets assumptions are expected to change at each valuation date reflecting current observable market conditions. Other assumptions may also change based on a hypothetical market participant’s view of actual experience as it emerges over time or other factors that impact the net liability.  If the emergence of future experience or future assumptions differs from the assumptions used in estimating these assets and liabilities, the resulting impact could be material to the Company’s consolidated results of operations, and in certain situations, could be material to the Company’s financial condition. <br /><br />GMIB liabilities are reported in the Company’s Consolidated Balance Sheets in Accounts payable, accrued expenses and other liabilities.  GMIB assets associated with these contracts represent net receivables in connection with reinsurance that the Company has purchased from two external reinsurers and are reported in the Company’s Consolidated Balance Sheets in Other assets, including other intangibles.  As of June 30, 2009, Standard & Poor’s (S&P) has given a financial strength rating of AA to one reinsurer and a financial strength rating of A- to the parent company that guarantees the receivable from the other reinsurer.</p></font></div><div><font size="2"><p>Changes in Level 3 Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis<br /><br />The following tables summarize the changes in financial assets and financial liabilities classified in Level 3 for the three months and six months ended June 30, 2009 and 2008.  These tables exclude separate account assets as changes in fair values of these assets accrue directly to policyholders. Gains and losses reported in these tables may include changes in fair value that are attributable to both observable and unobservable inputs.</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>For the Three Months Ended June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="27"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="27"><font size="2"> </font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>Fixed Maturities & Equity Securities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Assets</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Liabilities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Net</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Balance at 4/1/09</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 910 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 908 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1,641)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (733)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>Gains (losses) included in shareholders' net income:</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">  Results of GMIB</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (198)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 362 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 164 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">  Other</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (6)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>Total gains (losses) included in shareholders' net income</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (6)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (198)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 362 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 164 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Gains included in other comprehensive income</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 29 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Losses required to adjust future policy benefits for settlement annuities</font></td><td style="background-color: #FFFFFF;" width="37" align="right" height="17"><font size="2"> (1)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (31)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Purchases, issuances, settlements</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (7)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (25)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 55 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 30 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Transfers into Level 3</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 28 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>Balance at 6/30/09</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 923 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 685 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (1,224)</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (539)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>Total gains (losses) included in income attributable to </b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>  instruments held at the reporting date</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (6)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (198)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 362 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 164 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="9"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="9"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td></tr><tr><td colspan="10" width="775" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Amounts do not accrue to shareholders.</i></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>For the Three Months Ended June 30, 2008</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>Fixed Maturities & Equity Securities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Assets</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Liabilities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Net</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="27"><font size="2"><i>(In millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="27"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Balance at 4/1/08</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 726 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 515 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (965)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (450)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>Gains (losses) included in shareholders' net income:</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">  Results of GMIB, excluding adoption effect</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (58)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 107 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 49 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">  Other</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2"><b>Total gains (losses) included in shareholders' net income</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (58)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 107 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 49 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Gains included in other comprehensive income</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Losses required to adjust future policy benefits for settlement annuities</font></td><td style="background-color: #FFFFFF;" width="37" align="right" height="17"><font size="2"> (1)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (16)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Purchases, issuances, settlements</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 17 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (10)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 22 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 12 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="17"><font size="2">Transfers out of Level 3</font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (42)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>Balance at 6/30/08</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 695 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 447 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (836)</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (389)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>Total gains (losses) included in income attributable to </b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="18"><font size="2"><b>  instruments held at the reporting date</b></font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 3 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (58)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 107 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 49 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="362" align="left" height="9"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="37" align="left" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td></tr><tr><td colspan="10" width="775" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Amounts do not accrue to shareholders.</i></font></td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>For the Six Months Ended June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="27"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="27"><font size="2"> </font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>Fixed Maturities & Equity Securities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Assets</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Liabilities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Net</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Balance at 1/1/09</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 889 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 953 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1,757)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (804)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Gains (losses) included in shareholders' net income:</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">  Results of GMIB</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (236)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 432 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 196 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">  Other</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (10)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Total gains (losses) included in shareholders' net income</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (10)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (236)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 432 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 196 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Gains included in other comprehensive income</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 10 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Losses required to adjust future policy benefits for settlement annuities</font></td><td style="background-color: #FFFFFF;" width="27" align="right" height="17"><font size="2"> (1)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (107)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Purchases, issuances, settlements</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (10)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (32)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 101 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 69 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Transfers into Level 3</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 151 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>Balance at 6/30/09</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 923 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 685 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (1,224)</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (539)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>Total gains (losses) included in income attributable to </b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>  instruments held at the reporting date</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (10)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (236)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 432 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> $ </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 196 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="9"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="9"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td></tr><tr><td colspan="10" width="758" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Amounts do not accrue to shareholders.</i></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="27" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>For the Six Months Ended June 30, 2008</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>Fixed Maturities & Equity Securities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Assets</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Liabilities</b></font></td><td align="center" colspan="2" height="44" rowspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94"><font size="2"><b>GMIB Net</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="27"><font size="2"><i>(In millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="27"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Balance at 1/1/08</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 732 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 173 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (313)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (140)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Gains (losses) included in shareholders' net income:</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">  Effect of adoption of SFAS No. 157</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 244 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (446)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (202)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">  Results of GMIB, excluding adoption effect</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 67 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (120)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (53)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">  Other</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Total gains (losses) included in shareholders' net income</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 311 </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (566)</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (255)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Losses included in other comprehensive income</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (3)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Losses required to adjust future policy benefits for settlement annuities</font></td><td style="background-color: #FFFFFF;" width="27" align="right" height="17"><font size="2"> (1)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (34)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Purchases, issuances, settlements</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 11 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (37)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 43 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Transfers out of Level 3</font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (10)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>Balance at 6/30/08</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 695 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 447 </font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (836)</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (389)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>Total gains (losses) included in income attributable to </b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2"><b>  instruments held at the reporting date</b></font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 3 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 311 </font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (566)</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (255)</font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="9"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="27" align="left" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 3px double #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td></tr><tr><td colspan="10" width="758" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Amounts do not accrue to shareholders.</i></font></td></tr></table></div><div><font size="2"><p>As noted in the tables above, total gains and losses included in shareholders’ net income are reflected in the following captions in the Consolidated Statements of Income:<br /> <br />Other than temporary impairments on debt securities, net; other realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities; and<br />Guaranteed minimum income benefits (income) expense for amounts related to GMIB assets and liabilities.<br /><br />Reclassifications impacting Level 3 financial instruments are reported as transfers in or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Typically, investments that transfer out of Level 3 are classified in Level 2 as market data on the securities becomes more readily available.<br /><br />The Company provided reinsurance for other insurance companies that offer a guaranteed minimum income benefit, and then retroceded a portion of the risk to other insurance companies.  These arrangements with third party insurers are the instruments still held at the reporting date for GMIB assets and liabilities in the tables above.   Because these reinsurance arrangements remain in effect at the reporting date, the Company has reflected the total gain or loss for the period as the total gain or loss included in income attributable to instruments still held at the reporting date.  However, the Company reduces the GMIB assets and liabilities resulting from these reinsurance arrangements when annuitants lapse, die, elect their benefit, or reach the age after which the right to elect their benefit expires.<br /><br />Under SFAS No. 157, the Company’s GMIB assets and liabilities are expected to be volatile in future periods because the underlying assumptions will be based largely on market-observable inputs at the close of each reporting period including interest rates and market-implied volatilities.<br /> <br />The net gain for GMIB was $164 million for the three months ended June 30, 2009 and $196 million for the six months ended June 30, 2009, and was primarily due to the following factors:<br /><br />increases in interest rates ($129 million for the three months and $206 million for the six months ended June 30, 2009); <br />increases in underlying account values in the period, driven by favorable equity market and bond fund returns, resulting in reduced exposures ($51 million for the three months and $32 million for the six months ended June 30, 2009); and <br />updates to the risk and profit charge estimates ($20 million for the three months and $18 million for the six months ended June 30, 2009).<br /><br />These favorable effects were partially offset by:<br /><br />increases to the annuitization assumption, reflecting higher utilization experience ($21 million for the three months and six months ended June 30, 2009); <br />updates to the lapse assumption (none for the three months and $14 million for the six months ended June 30, 2009); and<br />other amounts (including experience varying from assumptions, model and in-force updates) ($15 million for the three months and $25 million for the six months ended June 30, 2009).<br /><br />For the second quarter of 2008, gains on the GMIB liabilities and offsetting losses on the GMIB assets were primarily the result of increases in interest rates. For the six months ended June 30, 2008, excluding the implementation impact of SFAS No. 157, losses on the GMIB liabilities and offsetting gains on the GMIB assets were primarily the result of declines in equity markets.</p></font></div><div><font size="2"><p>Separate account assets<br /><br />Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are not included in the Company’s revenues and expenses.  As of June 30, 2009 and December 31, 2008 separate account assets were as follows:<br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="257" align="right" height="18"><font size="2"><b>June 30, 2009</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="18"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="18"><font size="2"><b> </b></font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Quoted Prices in Active Markets for Identical Assets(Level 1)</b></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Other Observable Inputs(Level 2)</b></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Unobservable Inputs(Level 3)</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Total</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="18"><font size="2">Guaranteed separate accounts (See Note 17)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 231 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 1,532 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1,763 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="17"><font size="2">Non-guaranteed separate accounts (1)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 1,409 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 2,740 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 625 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4,774 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="18"><font size="2"><b>Total separate account assets</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 1,640 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 4,272 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 625 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 6,537 </font></td></tr><tr><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="9"><font size="2"> </font></td></tr><tr><td colspan="9" width="738" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Non-guaranteed separate accounts include $2.1 billion in assets supporting the Company's pension plans, including $590 million classified in Level 3.</i></font></td></tr><tr><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"><i> </i></font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><i> </i></font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="257" align="right" height="18"><font size="2"><b>December 31, 2008</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="18"><font size="2"><b> </b></font></td><td colspan="2" width="129" height="18" align="center" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;"><font size="2"><b> </b></font></td><td colspan="2" width="129" height="18" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b> </b></font></td><td colspan="2" width="129" height="18" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="18"><font size="2"><b> </b></font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Quoted Prices in Active Markets for Identical Assets(Level 1)</b></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Other Observable Inputs(Level 2)</b></font></td><td colspan="2" width="129" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Significant Unobservable Inputs(Level 3)</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Total</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="18"><font size="2">Guaranteed separate accounts (See Note 17)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 233 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 1,557 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 1,790 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="17"><font size="2">Non-guaranteed separate accounts (1)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 1,093 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 2,506 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 475 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4,074 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="18"><font size="2"><b>Total separate account assets</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 1,326 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 4,063 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 475 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 5,864 </font></td></tr><tr><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="257" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="9"><font size="2"> </font></td></tr><tr><td colspan="9" width="738" height="17" align="left" style="background-color: #FFFFFF;"><font size="2"><i>(1) Non-guaranteed separate accounts include $1.5 billion in assets supporting the Company's pension plans, including $435 million classified in Level 3.</i></font></td></tr></table></div><div><font size="2"><p>Separate account assets in Level 1 include exchange-listed equity securities.  Level 2 assets primarily include:<br /><br />equity securities and corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and<br />actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value which is their exit price.<br /><br />Separate account assets classified in Level 3 include investments primarily in securities partnerships and real estate generally valued at transaction price in the absence of market data indicating a change in the estimated fair value.  Values may be adjusted when evidence is available to support such adjustments.  Evidence may include market data as well as changes in the financial results and condition of the investment.<br /><br />The following tables summarize the changes in separate account assets reported in Level 3 for the three months and six months ended June 30, 2009 and 2008.        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Three Months Ended</b></font></td></tr><tr><td height="17" width="523" align="left"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Balance at 4/1</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 597 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 411 </font></td></tr><tr><td height="18" width="523" align="left"><font size="2">Policyholder gains (losses) (1)</font></td><td height="18" width="19" align="right"><font size="2"> </font></td><td height="18" width="75" align="right"><font size="2"> (21)</font></td><td height="18" width="19" align="right"><font size="2"> </font></td><td height="18" width="75" align="right"><font size="2"> 3 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Purchases, issuances, settlements</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 49 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 16 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Transfers out of Level 3 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="18"><font size="2"> (13)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Balance at 6/30</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 625 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 417 </font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="7"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="19" align="left" height="7"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="75" align="left" height="7"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="19" align="left" height="7"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="75" align="left" height="7"><font size="2"> </font></td></tr><tr><td align="left" colspan="5" height="17" width="711"><font size="2"><i>(1) Includes losses of $21 million and gains of $3 million attributable to instruments still held at June 30, 2009 and June 30, 2008 respectively.</i></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td height="17" width="523" align="left"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="18" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="17"><font size="2">Balance at 1/1</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 475 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 403 </font></td></tr><tr><td height="18" width="523" align="left"><font size="2">Policyholder gains (losses) (1)</font></td><td height="18" width="19" align="right"><font size="2"> </font></td><td height="18" width="75" align="right"><font size="2"> (67)</font></td><td height="18" width="19" align="right"><font size="2"> </font></td><td height="18" width="75" align="right"><font size="2"> 20 </font></td></tr><tr><td height="17" width="523" align="left"><font size="2">Purchases, issuances, settlements</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 57 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 9 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Transfers in (out) of Level 3 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="18"><font size="2"> 160 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="18"><font size="2"> (15)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="523" align="left" height="18"><font size="2">Balance at 6/30</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 625 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 417 </font></td></tr><tr><td style="border-top: 1px solid #000000;" width="523" align="left" height="6"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="19" align="left" height="6"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="75" align="left" height="6"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="19" align="left" height="6"><font size="2"> </font></td><td style="border-top: 2px solid #000000;" width="75" align="left" height="6"><font size="2"> </font></td></tr><tr><td align="left" colspan="5" height="17" width="711"><font size="2"><i>(1) Includes losses of $67 million and gains of $6 million attributable to instruments still held at June 30, 2009 and June 30, 2008 respectively.</i></font></td></tr><tr><td height="17" width="523" align="left"><font size="2"> </font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="left"><font size="2"> </font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="left"><font size="2"> </font></td></tr></table></div><div><font size="2"><p>Assets and Liabilities Measured at Fair Value on a Non-recurring Basis<br /><br />Certain financial assets and liabilities are measured at fair value on a non-recurring basis, such as commercial mortgage loans held for sale and investments in real estate entities that are impaired. In the second quarter of 2009, impaired real estate entities carried at cost of $41 million were written down to their fair values of $8 million, resulting in realized investment losses of $33 million. These fair value measurements were based on discounted cash flow analyses using significant unobservable inputs, and were classified in Level 3. As of December 31, 2008, the amounts required to adjust these assets and liabilities to their fair values were not significant.        </p></font></div><div><font size="2"><p>Fair Value Disclosures for Financial Instruments Not Carried at Fair Value <br /><br />Most financial instruments that are subject to fair value disclosure requirements are carried in the consolidated financial statements at amounts that approximate fair value. The following table shows the fair values and carrying values of the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at June 30, 2009 and December 31, 2008:<br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="3" width="169" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>December 31, 2008</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="center" height="29"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="29"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="29"><font size="2"><b>Fair Value</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="29"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="29"><font size="2"><b>Carrying Value</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="29"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="29"><font size="2"><b>Fair Value</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="29"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="75" align="center" height="29"><font size="2"><b>Carrying Value</b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2">Commercial mortgage loans </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,308 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,578 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,401 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 3,617 </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Contractholder deposit funds, excluding universal life products</font></td><td height="17" width="19" align="right"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 921 </font></td><td height="17" width="19" align="right"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 938 </font></td><td height="17" width="19" align="right"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 889 </font></td><td height="17" width="19" align="right"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 915 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2">Long-term debt, excluding capital leases</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 2,150 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 2,427 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 1,684 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 2,077 </font></td></tr></table></div><div><font size="2"><p>The fair values presented in the table above have been estimated using market information when available. The following is a description of the valuation methodologies and inputs used by the Company to determine fair value.<br /><br />Commercial mortgage loans. The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company’s assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates, based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan, considering debt service coverage, the loan to value ratio and other factors. Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally using an internal discounted cash flow model.<br /><br />Contractholder deposit funds, excluding universal life products. Generally, the Company’s contractholder deposit funds do not have stated maturities. Approximately 45% of these balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers’ assets supporting these reinsured contracts. The Company had a reinsurance recoverable equal to the carrying value of these reinsured contracts.<br /> <br />Long-term debt, excluding capital leases. The fair value of long-term debt is based on quoted market prices for recent trades. When quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company’s estimated current borrowing rate for debt of similar terms and remaining maturities.<br /><br />Fair values of off-balance-sheet financial instruments were not material. <br /></p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 9 — Investments<br /><br />Total Realized Investment Gains and Losses<br /><br />The following total realized gains and losses on investments include other than temporary impairments on debt securities but exclude amounts required to adjust future policy benefits for run-off settlement annuity business:<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Three Months Ended</b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Six Months Ended</b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Fixed maturities</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 5 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (15)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (11)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (41)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Equity securities</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 11 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (6)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Commercial mortgage loans</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (2)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (2)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Real estate</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Other investments, including derivatives</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (35)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (3)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (37)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 37 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Realized investment losses, before income taxes</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (18)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (19)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (54)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (5)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Less income tax benefits</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (9)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (7)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (21)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (2)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Net realized investment losses</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (9)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (12)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (33)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (3)</font></td></tr></table></div><div><font size="2"><p>Included in pre-tax realized investment losses above were other than temporary impairments on debt securities, asset write-downs and changes in valuation reserves as follows: <br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Three Months Ended</b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Six Months Ended</b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(in millions)</i></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Credit related (1)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 43 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b>$</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 54 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Other (2)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 11 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 9 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 24 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 42 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 11 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"><b>$</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 63 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 28 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="9"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="9"><font size="2"> </font></td></tr><tr><td align="left" style="background-color: #FFFFFF;" width="731" height="29" colspan="9"><font size="2"><i>(1) Credit-related losses include other-than-temporary declines in value of fixed maturities, equity securities and real estate entities. The amount related to credit losses on fixed maturities for which a portion of the impairment was recognized in other comprehensive income was not significant.</i></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="5"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="5"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="5"><font size="2"> </font></td></tr><tr><td align="left" style="background-color: #FFFFFF;" width="731" height="29" colspan="9"><font size="2"><i>(2) Prior to adoption of FSP No. 115-2 on April 1, 2009, other primarily represented the impact of rising market yields on investments where the Company could not demonstrate the intent and ability to hold until recovery.</i></font></td></tr></table></div><div><font size="2"><p>Fixed Maturities and Equity Securities <br /><br />Securities in the following table are included in fixed maturities and equity securities on the Company’s Consolidated Balance Sheets. These securities are carried at fair value with changes in fair value reported in other realized investment gains and interest and dividends reported in net investment income. The Company’s hybrid investments include preferred stock or debt securities with call or conversion features. The Company elected fair value accounting for certain hybrid securities to simplify accounting and mitigate volatility in results of operations and financial condition.</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="129" height="17" colspan="2"><font size="2"><b>As of June 30,</b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="129" height="17" colspan="2"><font size="2"><b>As of December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="129" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="129" height="17" colspan="2"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2">Included in fixed maturities:</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="110" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2">  Trading securities (amortized cost: $9; $13)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 9 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 13 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2">  Hybrid securities (amortized cost: $20; $10)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 21 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> 10 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="449" align="left" height="18"><font size="2">      Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 30 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 23 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="449" align="left" height="17"><font size="2">Included in equity securities:</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="110" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="449" align="left" height="18"><font size="2">  Hybrid securities (amortized cost: $109; $123)</font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 69 </font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="110" align="right" height="18"><font size="2"> 84 </font></td></tr></table></div><div><font size="2"><p>Fixed maturities and equity securities included $218 million at June 30, 2009, which were pledged as collateral to brokers as required under certain futures contracts. These fixed maturities and equity securities were primarily corporate securities.<br /><br />The following information about fixed maturities excludes trading and hybrid securities. The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at June 30, 2009: <br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Amortized</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Fair </b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2"><i>(in millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Cost</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Value</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Due in one year or less</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 667 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 671 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Due after one year through five years</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3,621 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3,736 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Due after five years through ten years</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4,740 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4,793 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Due after ten years</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,481 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,657 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="17"><font size="2">Mortgage and other asset-backed securities</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 628 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 608 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="523" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 12,137 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 12,465 </font></td></tr></table></div><div><font size="2"><p>Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties. Also, in some cases the Company may extend maturity dates.<br /><br />Mortgage-backed assets consist principally of commercial mortgage-backed securities and collateralized mortgage obligations of which $38 million were residential mortgages and home equity lines of credit, all of which were originated utilizing standard underwriting practices and are not considered sub-prime loans.<br />Gross unrealized appreciation (depreciation) on fixed maturities (excluding trading securities and hybrid securities) by type of issuer is shown below. <br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-bottom: 1px solid #000000;" width="341" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="341" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="376" height="17" colspan="8"><font size="2"><b>June 30, 2009</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Unrealized</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Unrealized</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b> </b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Amortized</b></font></td><td style="background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Appre-</b></font></td><td style="background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Depre-</b></font></td><td style="background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Fair</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2"><i>(in millions)</i></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Cost</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>ciation</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>ciation</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Value</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Federal government and agency</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 392 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 201 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (1)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 592 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">State and local government</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,351 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 145 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (18)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,478 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Foreign government</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 945 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 37 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (9)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 973 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Corporate</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 7,821 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 302 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (309)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 7,814 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Federal agency mortgage-backed</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 34 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 35 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Other mortgage-backed</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 138 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (19)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 122 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Other asset-backed</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 456 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 22 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (27)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 451 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 12,137 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 711 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (383)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 12,465 </font></td></tr></table></div><div><font size="2"><p>The above table includes investments with a fair value of $2.1 billion supporting the Company’s run-off settlement annuity business, with gross unrealized appreciation of $296 million and gross unrealized depreciation of $122 million at June 30, 2009. Such unrealized amounts are required to support future policy benefit liabilities of this business and, as such, are not included in accumulated other comprehensive income.<br /><br />Sales information for available-for-sale fixed maturities and equity securities were as follows:<br /></p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Three Months Ended</b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="188" height="17" colspan="4"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2009 </b></font></td><td align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Proceeds from sales</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 291 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 381 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b>$</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 410 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 696 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Gross gains on sales</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 12 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b>$</b></font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 15 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 5 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Gross losses on sales</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (11)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b>$</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (3)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (23)</font></td></tr></table></div><div><font size="2"><p>Review of declines in fair value. Management reviews fixed maturities and equity securities with a decline in fair value from cost for impairment based on criteria that include:<br /><br />length of time and severity of decline;<br />financial health and specific near term prospects of the issuer; <br />changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and<br />prior to April 1, 2009, the Company’s ability and intent to hold until recovery; beginning April 1, 2009, the Company’s intent to sell or the likelihood of a requirement to sell fixed maturities prior to their recovery. <br /><br />Excluding trading and hybrid securities, as of June 30, 2009, fixed maturities with a decline in fair value from amortized cost (which were primarily investment grade corporate bonds) were as follows, including the length of time of such decline: </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2"> </font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Fair </b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Amortized </b></font></td><td align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Unrealized</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>Number</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Value</b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Cost</b></font></td><td align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="94" height="17" colspan="2"><font size="2"><b>Depreciation</b></font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="17"><font size="2"><b>of Issues</b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">Fixed maturities:</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">One year or less:</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">   Investment grade</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,889 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,996 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (107)</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2">359 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">   Below investment grade</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 237 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 255 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (18)</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2">107 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">More than one year:</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">   Investment grade</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,886 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2,118 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (232)</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2">324 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="341" align="left" height="17"><font size="2">   Below investment grade</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 153 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 179 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (26)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2">33 </font></td></tr></table></div><div><font size="2"><p>The unrealized depreciation of investment grade fixed maturities is primarily due to increases in market yields since purchase. Approximately $119 million of the unrealized depreciation is due to securities with a decline in value of greater than 20%. Approximately 40% of these securities had been in that position for less than six months and approximately 90% less than twelve months. The remaining $264 million of the unrealized depreciation is due to securities with declines in value of less than 20%. There were no equity securities with a fair value significantly lower than cost as of June 30, 2009.<br /></p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 10 — Derivative Financial Instruments<br /><br />The Company’s investment strategy is to manage the characteristics and risks of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities (such as paying claims, investment returns and withdrawals). As part of this investment strategy, the Company typically uses derivatives to minimize interest rate, foreign currency and equity price risks of chosen investment assets to conform to the characteristics and risks of the related insurance and contractholder liabilities. The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize credit risk. In addition, the Company has written or sold contracts to guarantee minimum income benefits and to enhance investment returns. See Note 7 for a discussion of derivatives associated with GMDB contracts and Note 8 for a discussion of derivatives arising from GMIB contracts. <br /><br />The Company uses hedge accounting when derivatives are designated, qualify and are highly effective as hedges. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative and quantitative methods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. <br /><br />The Company accounts for derivative instruments as follows:<br /><br />Derivatives are reported on the balance sheet at fair value with changes in fair values reported in shareholders’ net income or accumulated other comprehensive income.<br />Changes in the fair value of derivatives that hedge market risk related to future cash flows – and that qualify for hedge accounting – are reported in a separate caption in accumulated other comprehensive income. These hedges are referred to as cash flow hedges. <br />A change in the fair value of a derivative instrument may not always equal the change in the fair value of the hedged item; this difference is referred to as hedge ineffectiveness. Where hedge accounting is used, the Company reflects hedge ineffectiveness in shareholders’ net income (generally as part of other realized investment gains and losses). <br />Features of certain investments and obligations, called embedded derivatives, are accounted for as derivatives. As permitted under GAAP, derivative accounting has not been applied to these features of such investments or obligations existing before January 1, 1999.<br /><br />Certain subsidiaries of the Company are parties to over-the-counter derivative instruments that contain bilateral provisions requiring the parties to such instruments to post collateral depending on net liability thresholds and the party’s financial strength or credit rating. The collateral posting requirements vary by counterparty. The aggregate fair value of derivative instruments with such credit-risk-related contingent features where a subsidiary of the Company was in a net liability position as of June 30, 2009 was $19 million for which the Company was not required to post collateral. If the contingent features underlying the agreements were triggered as of June 30, 2009, the Company would be required to post collateral of $19 million with its counterparties. Such subsidiaries are parties to certain other derivative instruments that contain termination provisions for which the counterparties could demand immediate payment of the total net liability position if the financial strength rating of the subsidiary were to decline below specified levels. As of June 30, 2009, there was no net liability position under such derivative instruments. <br /> <br />The table below presents information about the nature and accounting treatment of the Company’s primary derivative financial instruments including the Company’s purpose for entering into specific derivative transactions, and their locations in and effect on the financial statements as of and for the three and six month periods ended June 30, 2009. Derivatives in the Company’s separate accounts are not included because associated gains and losses generally accrue directly to policyholders.<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="center" height="12"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="center" height="12"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="29"><font size="2"><b>Instrument / Volume of Activity</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td height="29" width="110" align="left"><font size="2"><b>Primary Risk</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="2" height="29" width="136"><font size="2"><b>Purpose</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="2" height="29" width="136"><font size="2"><b>Cash Flows</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="4" height="29" width="188"><font size="2"><b>Accounting Policy</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="12"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="12"><font size="2"> </font></td><td colspan="2" width="136" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="center" height="12"><font size="2"> </font></td><td colspan="2" width="136" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="center" height="12"><font size="2"> </font></td><td colspan="4" width="188" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td></tr><tr><td colspan="14" width="728" height="18" align="left" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;border-left: 2px solid #000000;"><font size="2"><b>Derivatives Designated as Accounting Hedges - Cash Flow Hedges</b></font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="180"><font size="2"><b>Interest rate swaps — $145 million of par value of related investmentsForeign currency swaps — $179 million of U.S. dollar equivalent par value of related investmentsInterest rate and foreign currency swaps — $54 million of U.S. dollar equivalent par value of related investments</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="180"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="180"><font size="2">Interest rate and foreign currency</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="180"><font size="2"> </font></td><td colspan="2" width="136" height="180" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">To hedge the interest or foreign currency cash flows of fixed maturities and commercial mortgage loans to match associated liabilities. Currency swaps are primarily Canadian dollars, euros, Australian dollars, and British pounds for periods of up to 12 years.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="180"><font size="2"> </font></td><td colspan="2" width="136" height="180" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company periodically exchanges cash flows between variable and fixed interest rates or between two currencies for both principal and interest. Net interest cash flows are reported in net investment income and included in operating activities.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="180"><font size="2"> </font></td><td colspan="4" width="188" height="180" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Using cash flow hedge accounting, fair values are reported in other long-term investments or other liabilities and accumulated other comprehensive income.</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements (in millions)</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="34"><font size="2"> </font></td><td height="34" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="34"><font size="2"><b> </b></font></td><td colspan="5" width="284" height="34" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>As of June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="34"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="34" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Gain (Loss) Recognized in Other Comprehensive Income</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="39"><font size="2"> </font></td><td height="39" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="110" align="left" height="39"><font size="2"><b>Instrument</b></font></td><td style="border-bottom: 1px solid #000000;" width="12" align="left" height="39"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="39" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Other Long-Term Investments</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="12" align="center" height="39"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="39" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Accounts Payable, Accrued Expenses and Other Liabilities</b></font></td><td style="border-bottom: 1px solid #000000;" width="12" align="center" height="39"><font size="2"><b> </b></font></td><td colspan="2" width="94" height="39" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Three Months Ended June 30, 2009</b></font></td><td colspan="2" width="94" height="39" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Six Months Ended June 30, 2009</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="17"><font size="2">Interest rate swaps</font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="117" align="right" height="17"><font size="2"> 9 </font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="117" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (4)</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (5)</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td height="17" width="110" align="left"><font size="2">Foreign currency swaps</font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="117" align="right"><font size="2"> 5 </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="117" align="right"><font size="2"> 15 </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (17)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td style="border-right: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (15)</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="26"><font size="2"> </font></td><td height="26" width="12" align="left"><font size="2"> </font></td><td height="26" width="110" align="left"><font size="2">Interest rate and foreign currency swaps</font></td><td height="26" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="26"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="117" align="right" height="26"><font size="2"> 3 </font></td><td height="26" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="26"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="117" align="right" height="26"><font size="2"> 4 </font></td><td height="26" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="26"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="26"><font size="2"> (9)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="26"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="26"><font size="2"> (7)</font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2">Total</font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="117" align="right" height="17"><font size="2"> 17 </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="117" align="right" height="17"><font size="2"> 19 </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (30)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (27)</font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="109"><font size="2"><b>Purchased options — $311 million of cash surrender value of related life insurance policies</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="109"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="109"><font size="2">Interest rate</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="109"><font size="2"> </font></td><td colspan="2" width="136" height="109" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">To hedge the possibility of early policyholder cash surrender when the amortized cost of underlying invested assets is greater than their fair values.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="109"><font size="2"> </font></td><td colspan="2" width="136" height="109" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company pays a fee and may receive or pay cash, based on the difference between the amortized cost and fair values of underlying invested assets at the time of policyholder surrender. These cash flows will be reported in financing activities. </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="109"><font size="2"> </font></td><td colspan="4" width="188" height="109" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Using cash flow hedge accounting, fair values are reported in other assets or other liabilities, with changes in fair value reported in accumulated other comprehensive income and amortized to benefits expense over the life of the underlying invested assets. </font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td colspan="12" width="606" height="18" align="left" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;"><font size="2">Fair values reported in other assets and other comprehensive income were less than $1 million.</font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="85"><font size="2"><b>Treasury lock</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="85"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="85"><font size="2">Interest rate</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="85"><font size="2"> </font></td><td colspan="2" width="136" height="85" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">To hedge the variability of and fix at inception date, the benchmark Treasury rate component of future interest payments on debt to be issued.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="85"><font size="2"> </font></td><td colspan="2" width="136" height="85" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company paid the fair value of the contract at the expiration. Cash flows are reported in operating activities.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="85"><font size="2"> </font></td><td colspan="4" width="188" height="85" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Using cash flow hedge accounting, fair values are reported in short-term investments or other liabilities, with changes in fair value reported in accumulated other comprehensive income and amortized to interest expense over the life of the debt issued.</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="39"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="39"><font size="2"> </font></td><td colspan="12" width="606" height="39" align="left" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;"><font size="2">In the first quarter of 2009, all treasury locks matured and the Company recognized a gain of $14 million in other comprehensive income, resulting in net cumulative losses of $26 million, to be amortized to interest expense over the life of the debt. In the second quarter of 2009, the Company issued debt and began amortizing this loss to interest expense. Reclassifications from accumulated other comprehensive income to interest expense for issued debt were less than $1 million for the three and six month periods ended June 30, 2009.</font></td></tr></table></div><div><font size="2"><p></p></font></div><div><font size="2"><p>The amount of gains (losses) reclassified from accumulated other comprehensive income into income was not significant. No gains (losses) were recognized due to ineffectiveness and no amounts were excluded from the assessment of hedge ineffectiveness.        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="center" height="12"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;" width="12" align="center" height="12"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="12" align="center" style="border-top: 2px solid #000000;"><font size="2"><b> </b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="29"><font size="2"><b>Instrument / Volume of Activity</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td height="29" width="110" align="left"><font size="2"><b>Primary Risk</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="2" height="29" width="136"><font size="2"><b>Purpose</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="2" height="29" width="136"><font size="2"><b>Cash Flows</b></font></td><td height="29" width="12" align="left"><font size="2"><b> </b></font></td><td align="left" colspan="4" height="29" width="188"><font size="2"><b>Accounting Policy</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="12"><font size="2"><b> </b></font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="12"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="12"><font size="2"> </font></td><td colspan="2" width="136" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="center" height="12"><font size="2"> </font></td><td colspan="2" width="136" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="center" height="12"><font size="2"> </font></td><td colspan="4" width="188" height="12" align="center" style="border-bottom: 2px solid #000000;"><font size="2"> </font></td></tr><tr><td colspan="14" width="728" height="18" align="left" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;border-left: 2px solid #000000;"><font size="2"><b>Derivatives Not Designated As Accounting Hedges</b></font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="118"><font size="2"><b>Futures — $1,285 million of U.S. dollar equivalent market price of outstanding contracts</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="118"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="118"><font size="2">Equity and foreign currency</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="118"><font size="2"> </font></td><td colspan="2" width="136" height="118" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">To reduce domestic and international equity market exposures for certain reinsurance contracts that guarantee death benefits resulting from changes in variable annuity account values based on underlying mutual funds. Currency futures are primarily euros, Japanese yen and British pounds. </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="118"><font size="2"> </font></td><td colspan="2" width="136" height="118" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company receives (pays) cash daily in the amount of the change in fair value of the futures contracts. Cash flows are included in operating activities.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="118"><font size="2"> </font></td><td colspan="4" width="188" height="118" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Fair value changes are reported in other revenues. Amounts not yet settled from the previous day's fair value change (daily variation margin) are reported in premiums, accounts and notes receivable, net or accounts payable, accrued expenses and other liabilities.</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements (in millions)</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="117" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="117" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Other Revenues</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="27"><font size="2"> </font></td><td height="27" width="12" align="left"><font size="2"> </font></td><td height="27" width="110" align="left"><font size="2"><b> </b></font></td><td height="27" width="12" align="left"><font size="2"><b> </b></font></td><td align="center" colspan="2" height="27" width="136"><font size="2"><b> </b></font></td><td height="27" width="12" align="center"><font size="2"><b> </b></font></td><td align="center" colspan="2" height="27" width="136"><font size="2"><b> </b></font></td><td height="27" width="12" align="center"><font size="2"><b> </b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Three Months Ended June 30, 2009</b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Six Months Ended June 30, 2009</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="18"><font size="2">Futures</font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="117" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="117" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> (188)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> (71)</font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="81"><font size="2"><b>Interest rate swaps — $76 million of par value of related investments</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="81"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="81"><font size="2">Interest rate</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="81"><font size="2"> </font></td><td colspan="2" width="136" height="81" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">To hedge the interest cash flows of fixed maturities to match associated liabilities. </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="81"><font size="2"> </font></td><td colspan="2" width="136" height="81" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company periodically exchanges cash flows between variable and fixed interest rates for both principal and interest. Net interest cash flows are reported in other realized investment gains (losses) and included in operating activities.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="81"><font size="2"> </font></td><td colspan="4" width="188" height="81" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Fair values are reported in other long-term investments or other liabilities, with changes in fair value reported in other realized investment gains and losses.</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements (in millions)</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="17"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>As of June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="117" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Realized Investment Gains (Losses)</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="27"><font size="2"> </font></td><td height="27" width="12" align="left"><font size="2"> </font></td><td height="27" width="110" align="left"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;" width="12" align="left" height="27"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Other Long-Term Investments</b></font></td><td height="27" width="12" align="center"><font size="2"><b> </b></font></td><td height="27" width="19" align="left"><font size="2"><b> </b></font></td><td height="27" width="117" align="left"><font size="2"><b> </b></font></td><td height="27" width="12" align="center"><font size="2"><b> </b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Three Months Ended June 30, 2009</b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Six Months Ended June 30, 2009</b></font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="18"><font size="2">Interest rate swaps</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="117" align="right" height="18"><font size="2"> 4 </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="117" align="left" height="18"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="18"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1 </font></td></tr><tr><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="117" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="border-top: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="206"><font size="2"><b>Written options (GMIB liability) — $1,508 million of maximum potential undiscounted future payments as defined in Note 17Purchased options (GMIB asset) — $829 million of maximum potential undiscounted future receipts as defined in Note 17</b></font></td><td style="border-top: 2px solid #000000;" width="12" align="left" height="206"><font size="2"><b> </b></font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="110" align="left" height="206"><font size="2">Equity and interest rate</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="206"><font size="2"> </font></td><td colspan="2" width="136" height="206" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company has written certain reinsurance contracts to guarantee minimum income benefits resulting from the level of variable annuity account values compared with a contractually guaranteed amount. The actual payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments. The Company purchased reinsurance contracts to hedge a portion of the market risks assumed. These contracts are accounted for as written and purchased options.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="206"><font size="2"> </font></td><td colspan="2" width="136" height="206" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">The Company periodically receives (pays) fees based on either contractholders' account values or deposits increased at a contractual rate. The Company will also pay (receive) cash depending on changes in account values and interest rates when account holders first elect to receive minimum income payments. These cash flows are reported in operating activities.</font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" width="12" align="left" height="206"><font size="2"> </font></td><td colspan="4" width="188" height="206" align="left" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;"><font size="2">Fair values are reported in other liabilities (GMIB liability) and other assets (GMIB asset). Changes in fair value are reported in guaranteed minimum income benefits (income) expense.</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td height="17" width="12" align="left"><font size="2"> </font></td><td colspan="12" width="606" height="17" align="left" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Fair Value Effect on the Financial Statements (in millions)</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="34"><font size="2"> </font></td><td height="34" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="34"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="34"><font size="2"><b> </b></font></td><td colspan="5" width="284" height="34" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>As of June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;" width="12" align="center" height="34"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="34" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Guaranteed Minimum Income Benefits (Income) Expense</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="27"><font size="2"> </font></td><td height="27" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="110" align="left" height="27"><font size="2"><b>Instrument</b></font></td><td style="border-bottom: 1px solid #000000;" width="12" align="left" height="27"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Other Assets</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="12" align="center" height="27"><font size="2"><b> </b></font></td><td colspan="2" width="136" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Accounts Payable, Accrued Expenses and Other Liabilities</b></font></td><td style="border-bottom: 1px solid #000000;" width="12" align="center" height="27"><font size="2"><b> </b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Three Months Ended June 30, 2009</b></font></td><td colspan="2" width="94" height="27" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>Six Months Ended June 30, 2009</b></font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="25"><font size="2"> </font></td><td height="25" width="12" align="left"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="110" align="left" height="25"><font size="2">Written options (GMIB liability)</font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="25"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="25"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="117" align="right" height="25"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="25"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="25"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="117" align="right" height="25"><font size="2"> 1,224 </font></td><td style="border-top: 1px solid #000000;" width="12" align="left" height="25"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="25"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="25"><font size="2"> (362)</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="25"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="25"><font size="2"> (432)</font></td></tr><tr><td style="border-left: 2px solid #000000;" width="110" align="left" height="25"><font size="2"> </font></td><td height="25" width="12" align="left"><font size="2"> </font></td><td height="25" width="110" align="left"><font size="2">Purchased options (GMIB asset)</font></td><td height="25" width="12" align="left"><font size="2"> </font></td><td height="25" width="19" align="right"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="117" align="right" height="25"><font size="2"> 685 </font></td><td height="25" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="25"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="117" align="right" height="25"><font size="2"> - </font></td><td height="25" width="12" align="left"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="25"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="25"><font size="2"> 198 </font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="25"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="25"><font size="2"> 236 </font></td></tr><tr><td style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" width="110" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="110" align="left" height="17"><font size="2">Total</font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="117" align="right" height="17"><font size="2"> 685 </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="117" align="right" height="17"><font size="2"> 1,224 </font></td><td style="border-bottom: 2px solid #000000;" width="12" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (164)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> (196)</font></td></tr></table></div><div><font size="2"><p></p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 11 ― Reinsurance<br /><br />The Company’s insurance subsidiaries enter into agreements with other insurance companies to assume and cede reinsurance.  Reinsurance is ceded primarily to limit losses from large exposures and to permit recovery of a portion of direct losses. Reinsurance is also used in acquisition and disposition transactions where the underwriting company is not being acquired. Reinsurance does not relieve the originating insurer of liability.  The Company regularly evaluates the financial condition of its reinsurers and monitors its concentrations of credit risk.<br /><br />Retirement benefits business.  The Company had a reinsurance recoverable of $1.8 billion as of June 30, 2009, and $1.9 billion as of December 31, 2008 from Prudential Retirement Insurance and Annuity Company resulting from the sale of the retirement benefits business, which was primarily in the form of a reinsurance arrangement.  The reinsurance recoverable, which is reduced as the Company’s reinsured liabilities are paid or directly assumed by the reinsurer, is secured primarily by fixed maturities and mortgage loans equal to or greater than 100% of the reinsured liabilities. These fixed maturities and mortgage loans are held in a trust established for the benefit of the Company. As of June 30, 2009, the trust was adequately funded and S&P had assigned this reinsurer a rating of AA-. <br /><br />Individual life and annuity reinsurance. The Company had reinsurance recoverables totaling $4.5 billion as of June 30, 2009 and $4.6 billion as of December 31, 2008 from The Lincoln National Life Insurance Company and Lincoln Life & Annuity of New York resulting from the 1998 sale of the Company’s individual life insurance and annuity business through indemnity reinsurance arrangements.  Effective December 31, 2007, a substantial portion of the reinsurance recoverables are secured by investments held in a trust established for the benefit of the Company. At June 30, 2009, the trust assets secured approximately 90% of the reinsurance recoverables and S&P had assigned both of these reinsurers a rating of AA-.<br /></p></font></div><div><font size="2"><p>Other Ceded and Assumed Reinsurance<br /><br />Ceded Reinsurance: Ongoing operations. The Company’s insurance subsidiaries have reinsurance recoverables from various reinsurance arrangements in the ordinary course of business for its Health Care, Disability and Life, and International segments as well as the non-leveraged and leveraged corporate-owned life insurance business. Reinsurance recoverables of $309 million as of June 30, 2009 are expected to be collected from more than 90 reinsurers which have been assigned the following financial strength ratings from S&P:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="404" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="145" align="center" height="17"><font size="2"><b>Percent of Reinsurance</b></font></td></tr><tr><td height="17" width="404" align="left"><font size="2"><b> </b></font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="center"><font size="2"><b>Reinsurance</b></font></td><td height="17" width="75" align="center"><font size="2"><b>Percent</b></font></td><td height="17" width="145" align="center"><font size="2"><b>Recoverable Protected</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2"><b>Ongoing operations (In millions)</b></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>Recoverable</b></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>of Total</b></font></td><td style="border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2"><b>by Collateral</b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="404" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="145" align="left" height="8"><font size="2"> </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">AA- (Single reinsurer)</font></td><td height="17" width="19" align="left"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 45 </font></td><td height="17" width="75" align="center"><font size="2">15% </font></td><td height="17" width="145" align="center"><font size="2">0% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">AA- or higher (All other reinsurers)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 33 </font></td><td height="17" width="75" align="center"><font size="2">11% </font></td><td height="17" width="145" align="center"><font size="2">0% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">A (Single reinsurer)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 31 </font></td><td height="17" width="75" align="center"><font size="2">10% </font></td><td height="17" width="145" align="center"><font size="2">0% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">A+ to A- (All other reinsurers)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 106 </font></td><td height="17" width="75" align="center"><font size="2">34% </font></td><td height="17" width="145" align="center"><font size="2">4% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">Unrated (Single reinsurer)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 34 </font></td><td height="17" width="75" align="center"><font size="2">11% </font></td><td height="17" width="145" align="center"><font size="2">96% </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2">Below A- or unrated (All other reinsurers)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 60 </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2">19% </font></td><td style="border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2">29% </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> 309 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="center" height="17"><font size="2">100% </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2">18% </font></td></tr></table></div><div><font size="2"><p>The Company reviews its reinsurance arrangements and establishes reserves against the recoverables in the event that recovery is not considered probable. As of June 30, 2009, the Company’s recoverables related to these segments were net of a reserve of $11 million.<br /><br />Assumed and Ceded reinsurance: Run-off Reinsurance segment. The Company's Run-off Reinsurance operations assumed risks related to GMDB contracts, GMIB contracts, workers’ compensation, and personal accident business. The Company’s Run-off Reinsurance operations also purchased retrocessional coverage to reduce the risk of loss on these contracts.<br /><br />Liabilities related to GMDB, workers’ compensation and personal accident are included in future policy benefits and unpaid claims. Because the GMIB contracts are treated as derivatives under GAAP, the asset related to GMIB is recorded in the Other assets, including other intangibles caption and the liability related to GMIB is recorded in the Accounts payable, accrued expenses, and other liabilities caption on the Company’s Consolidated Balance Sheets (see Notes 8 and 17 for additional discussion of the GMIB assets and liabilities).<br /><br />The reinsurance recoverables for GMDB, workers’ compensation, and personal accident of $144 million as of June 30, 2009 are expected to be collected from more than 100 retrocessionaires which have been assigned the following financial strength ratings from S&P:</p></font></div><div><font size="2"><p>The Company reviews its reinsurance arrangements and establishes reserves against the recoverables in the event that recovery is not considered probable. As of June 30, 2009, the Company’s recoverables related to this segment were net of a reserve of $11 million.<br /><br />The Company's payment obligations for underlying reinsurance exposures assumed by the Company under these contracts are based on ceding companies’ claim payments. For GMDB, claim payments vary because of changes in equity markets and interest rates, as well as mortality and policyholder behavior. For workers’ compensation and personal accident, the payments relate to accidents and injuries. Any of these claim payments can extend many years into the future, and the amount of the ceding companies’ ultimate claims, and therefore the amount of the Company's ultimate payment obligations and corresponding ultimate collection from retrocessionaires, may not be known with certainty for some time.<br /><br />Summary. The Company’s reserves for underlying reinsurance exposures assumed by the Company, as well as for amounts recoverable from reinsurers/retrocessionaires for both ongoing operations and the run-off reinsurance operation, are considered appropriate as of June 30, 2009, based on current information.  However, it is possible that future developments could have a material adverse effect on the Company’s consolidated results of operations and, in certain situations, such as if actual experience differs from the assumptions used in estimating reserves for GMDB, could have a material adverse effect on the Company’s financial condition. The Company bears the risk of loss if its retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company.<br /><br />Effects of reinsurance. In the Company’s Consolidated Statements of Income, premiums and fees were net of ceded premiums, and benefits and expenses were net of reinsurance recoveries, in the following amounts:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="404" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;" width="145" align="center" height="17"><font size="2"><b>Percent of Reinsurance</b></font></td></tr><tr><td height="17" width="404" align="left"><font size="2"> </font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="center"><font size="2"><b>Reinsurance</b></font></td><td height="17" width="75" align="center"><font size="2"><b>Percent</b></font></td><td height="17" width="145" align="center"><font size="2"><b>Recoverable Protected</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2"><b>Run-off Reinsurance segment (In millions)</b></font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>Recoverable</b></font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2"><b>of Total</b></font></td><td style="border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2"><b>by Collateral</b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="404" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="19" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="75" align="left" height="8"><font size="2"> </font></td><td style="border-top: 1px solid #000000;" width="145" align="left" height="8"><font size="2"> </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">AA- or higher (All reinsurers)</font></td><td height="17" width="19" align="left"><font size="2">$</font></td><td height="17" width="75" align="right"><font size="2"> 34 </font></td><td height="17" width="75" align="center"><font size="2">24% </font></td><td height="17" width="145" align="center"><font size="2">10% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">A (Single reinsurer)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 49 </font></td><td height="17" width="75" align="center"><font size="2">34% </font></td><td height="17" width="145" align="center"><font size="2">100% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">A- (Single reinsurer)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 25 </font></td><td height="17" width="75" align="center"><font size="2">17% </font></td><td height="17" width="145" align="center"><font size="2">0% </font></td></tr><tr><td height="17" width="404" align="left"><font size="2">A+ to A- (All other reinsurers)</font></td><td height="17" width="19" align="left"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 19 </font></td><td height="17" width="75" align="center"><font size="2">13% </font></td><td height="17" width="145" align="center"><font size="2">1% </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2">Below A- or unrated (All reinsurers)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 17 </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="center" height="17"><font size="2">12% </font></td><td style="border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2">36% </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="404" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="left" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="17"><font size="2"> 144 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="center" height="17"><font size="2">100% </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="145" align="center" height="17"><font size="2">41% </font></td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Three Months Ended</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Ceded premiums and fees</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Individual life insurance and annuity business sold</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 50 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 56 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 101 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 114 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Other</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 55 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 76 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 115 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 135 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 105 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 132 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 216 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 249 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Reinsurance recoveries</b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Individual life insurance and annuity business sold</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 59 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 90 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 127 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 179 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Other</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 24 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 48 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 82 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 101 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 83 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 138 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 209 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 280 </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 12 — Pension and Other Postretirement Benefit Plans<br /><br />The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired employees, spouses and other eligible dependents through various plans.<br /><br />On May 8, 2009, the Company announced a freeze of its domestic pension plans effective July 1, 2009. As a result of this action, the Company re-measured the benefit obligations of the affected plans effective May 31, 2009, causing a reduction in the pension obligation of $47 million in the second quarter of 2009. The reduction primarily reflects an increase in the discount rates used to re-measure the pension plan obligations from 6.25% at December 31, 2008 to 6.5% at May 31, 2009 reflecting the change in market interest rates. A curtailment of benefits occurs as a result of this action because it eliminates all future service for active employees in the domestic pension plans. Accordingly, the Company recognized an after-tax curtailment gain of $30 million during the second quarter of 2009, which was the remaining unamortized negative prior service cost at May 31, 2009. <br /><br />Significant changes from the Company’s disclosures at December 31, 2008 as a result of the decision to freeze the domestic pension plans are as follows:<br /><br />The Company’s postretirement benefit liability adjustment increased by $24 million pre-tax ($16 million after-tax) for the six months ended June 30, 2009, resulting in a decrease to accumulated other comprehensive income. The increase to the liability was primarily due to effect of the curtailment, partially offset by net amortization of actuarial losses.<br />The Company recognized all prior service costs for the domestic pension plans during the second quarter of 2009 as part of the curtailment gain. As a result, there will be no pre-tax amortization of prior service costs after June 30, 2009. The Company previously disclosed that it expected to record amortization of negative prior service costs of $11 million pre-tax in 2009. The Company had been amortizing negative prior service costs related to previous plan amendments over a 6-year period. As a result of the decision to freeze the plans, the Company recorded an after-tax curtailment gain in the amount of $30 million during the second quarter of 2009.<br />The Company now expects estimated amortization of actuarial losses for the pension plans is to be approximately $34 million pre-tax for the full year 2009, compared with the previous estimate of $54 million. The decline primarily reflects two factors: <br /><br />The weighted average amortization period for the frozen plans is now based on average expected remaining life of plan participants, which is approximately 31 years. This compares with the Company’s previous amortization period of six years, which reflected the expected remaining future service of active employees. This change in amortization period occurred after the plan freeze because the workforce is considered inactive for pension accounting purposes as these employees will no longer earn pension benefits. <br />The increase in the discount rate lowered the net actuarial loss to be amortized.</p></font></div><div><font size="2"><p>Pension benefits. Components of net pension cost were as follows:<br />        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Three Months Ended</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td height="17" width="355" align="left"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2">Service cost</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 21 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 19 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 42 </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 37 </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Interest cost</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 62 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 60 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 123 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 121 </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Expected long-term return on plan assets</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (60)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (58)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (120)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (117)</font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Amortization of:</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">   Net loss from past experience</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 10 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 14 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 27 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 28 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2">   Prior service cost</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (1)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (6)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="left" height="18"><font size="2">Net pension cost</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 32 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 31 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 68 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 63 </font></td></tr></table></div><div><font size="2"><p>The Company funds its qualified pension plans at least at the minimum amount required by the Pension Protection Act of 2006, which requires companies to fully fund defined benefit pension plans over a seven-year period beginning in 2008. The Company made $320 million in domestic pension plan contributions during the six months ended June 30, 2009, and expects to make an additional contribution of $90 million which will be contributed over the remainder of 2009.<br /><br /></p></font></div><div><font size="2"><p>Other postretirement benefits. Components of net other postretirement benefit cost were as follows:        </p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;" width="355" align="center" height="17"><font size="2"><b> </b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Three Months Ended</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td height="17" width="355" align="left"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;" width="355" align="left" height="17"><font size="2">Service cost</font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;" width="19" align="right" height="17"><font size="2">$</font></td><td style="border-top: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> 1 </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Interest cost</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 6 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 6 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 12 </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> 12 </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Expected long-term return on plan assets</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (1)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (1)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (1)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (1)</font></td></tr><tr><td height="17" width="355" align="left"><font size="2">Amortization of:</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> - </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> </font></td></tr><tr><td height="17" width="355" align="left"><font size="2">   Net gain from past experience</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> - </font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (2)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (2)</font></td><td height="17" width="19" align="right"><font size="2"> </font></td><td height="17" width="75" align="right"><font size="2"> (4)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;" width="355" align="left" height="17"><font size="2">   Prior service cost</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (9)</font></td><td style="border-bottom: 1px solid #000000;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;" width="75" align="right" height="17"><font size="2"> (8)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" width="355" align="left" height="18"><font size="2">Net other postretirement benefit cost</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> 1 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> (1)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> - </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" width="75" align="right" height="18"><font size="2"> - </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 13 ― Debt</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2"><i> </i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>December 31,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2"><b>Short-term:</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">Commercial paper</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 102 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 299 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">Current maturities of long-term debt</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 4 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 2 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="18"><font size="2">Total short-term debt</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 106 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 301 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2"><b>Long-term:</b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">Uncollateralized debt:</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">7% Notes due 2011</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 222 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 222 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">6.375% Notes due 2011</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 226 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 226 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">5.375% Notes due 2017</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 250 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 250 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">6.35% Notes due 2018</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 300 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 300 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">8.5% Notes due 2019</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 349 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> - </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">6.37% Notes due 2021</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 78 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 78 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">7.65% Notes due 2023</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 100 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 100 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">8.3% Notes due 2023</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 17 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 17 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">7.875% Debentures due 2027</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 300 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 300 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">8.3% Step Down Notes due 2033</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 83 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 83 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">6.15% Notes due 2036</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 500 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 500 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="17"><font size="2">Other</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 10 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 14 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="530" align="left" height="18"><font size="2">Total long-term debt</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 2,435 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 2,090 </font></td></tr></table></div><div><font size="2"><p>Under a universal shelf registration statement filed with the Securities and Exchange Commission (SEC), the Company issued $350 million of 8.5% Notes on May 4, 2009 ($349 million, net of debt discount, with an effective interest rate of 9.90% per year). The difference between the stated and effective interest rates primarily reflects the effect of a treasury lock. See Note 10 for further information. Interest is payable on May 1 and November 1 of each year beginning November 1, 2009. These Notes will mature on May 1, 2019. <br /><br />On March 4, 2008, the Company issued $300 million of 6.35% Notes (with an effective interest rate of 6.68% per year). Interest is payable on March 15 and September 15 of each year beginning September 15, 2008.  These Notes will mature on March 15, 2018.<br /><br />The Company may redeem these Notes, at any time, in whole or in part, at a redemption price equal to the greater of:<br /><br />        100% of the principal amount of the Notes to be redeemed; or<br />        the present value of the remaining principal and interest payments on the Notes being redeemed discounted at the applicable treasury rate plus 50 basis points (8.50% Notes due 2019) or 40 basis points (6.35% Notes due 2018).<br /><br />On March 14, 2008, the Company entered into a new commercial paper program (“the Program”).  Under the Program, the Company is authorized to sell from time to time short-term unsecured commercial paper notes up to a maximum of $500 million.  The proceeds are used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchases.  The Company uses the credit facility entered into in June 2007, as back-up liquidity to support the outstanding commercial paper.  If at any time funds are not available on favorable terms under the Program, the Company may use its credit agreement for funding. In October 2008, the Company added an additional dealer to its Program. As of June 30, 2009, the Company had $102 million in commercial paper outstanding at a weighted average interest rate of 1.13% and remaining maturities ranging from one to 34 days.</p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 14 — Accumulated Other Comprehensive Loss<br /><br />Accumulated other comprehensive loss excludes amounts required to adjust future policy benefits for run-off settlement annuity business. Changes in accumulated other comprehensive loss were as follows:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Tax</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="background-color: #FFFFFF;"><font size="2"><b>(Expense)</b></font></td><td colspan="2" width="94" height="17" align="center" style="background-color: #FFFFFF;"><font size="2"><b>After-</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Pre-Tax</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Benefit</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Tax</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Three Months Ended June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="16"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="16"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="center" height="16"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="center" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized appreciation, securities:</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Implementation effect of FASB FSP No. 115-2</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (27)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (18)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized appreciation on securities arising during the period</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 345 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (119)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 226 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for (gains) included in shareholders' net income</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (16)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 4 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (12)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized appreciation, securities </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 302 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (106)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 196 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, derivatives</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (30)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 11 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (19)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net translation of foreign currencies</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 66 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (24)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 42 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Postretirement benefits liability adjustment: </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for amortization of net losses from past</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">   experience and prior service costs</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 5 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (1)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 4 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Curtailment gain</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (46)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 16 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (30)</font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment included in shareholders' net income</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (41)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 15 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (26)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net change due to valuation update</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 10 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 6 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net postretirement benefits liability adjustment</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (31)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 11 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (20)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Three Months Ended June 30, 2008</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, securities:</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized depreciation on securities arising during the period</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (184)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 62 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (122)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for losses included in shareholders' net income</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 14 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 10 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized depreciation, securities </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (170)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 58 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (112)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, derivatives</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (6)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 3 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (3)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net translation of foreign currencies</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (26)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (17)</font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Postretirement benefits liability adjustment: </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net change due to valuation update</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (3)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 6 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for amortization of net losses from past</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">   experience and prior service costs</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 4 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> - </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 4 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net postretirement benefits liability adjustment</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 13 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (3)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 10 </font></td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Tax</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"><b> </b></font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td colspan="2" width="94" height="17" align="center" style="background-color: #FFFFFF;"><font size="2"><b>(Expense)</b></font></td><td colspan="2" width="94" height="17" align="center" style="background-color: #FFFFFF;"><font size="2"><b>After-</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Pre-Tax</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Benefit</b></font></td><td colspan="2" width="94" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Tax</b></font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Six Months Ended June 30, 2009</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized appreciation, securities:</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Implementation effect of FASB FSP No. 115-2</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (27)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (18)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized appreciation on securities arising during the year</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 388 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (132)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 256 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for losses included in shareholders' net income</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 17 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (8)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized appreciation, securities </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 378 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (131)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 247 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, derivatives</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (13)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 5 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (8)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net translation of foreign currencies</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 22 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (8)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 14 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Postretirement benefits liability adjustment: </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for amortization of net losses from past</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="left" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">   experience and prior service costs</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 12 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (4)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 8 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Curtailment gain</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (46)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 16 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (30)</font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment included in shareholders' net income</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (34)</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 12 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (22)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net change due to valuation update</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 10 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (4)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 6 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net postretirement benefits liability adjustment</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (24)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 8 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (16)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Six Months Ended June 30, 2008</b></font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, securities:</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized depreciation on securities arising during the year</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (214)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 73 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (141)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for losses included in shareholders' net income</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 40 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (13)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 27 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net unrealized depreciation, securities </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (174)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 60 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (114)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net unrealized depreciation, derivatives</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (18)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 7 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (11)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Net translation of foreign currencies</b></font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (34)</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 11 </font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (23)</font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2"><b>Postretirement benefits liability adjustment: </b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net change due to valuation update</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 9 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (3)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 6 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Reclassification adjustment for amortization of net losses from past</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">   experience and prior service costs</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 10 </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (3)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 7 </font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="446" align="left" height="16"><font size="2">Net postretirement benefits liability adjustment</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 19 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> (6)</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="16"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="16"><font size="2"> 13 </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 15 — Income Taxes</p></font></div><div><font size="2"><p>The Company has historically accrued U.S. income taxes on the undistributed earnings of foreign subsidiaries. In 2009, the Company determined that the prospective earnings of its South Korean operation are to be permanently invested overseas. Income taxes for this operation will therefore be accrued at the tax rate of the foreign jurisdiction. As a result, shareholders’ net income increased for the three and six months ended June 30, 2009 by $20 million, which included $18 million representing the unrecognized deferred tax liabilities attributable to its investment in the South Korean subsidiary that are considered permanent in nature. Management is currently assessing whether the undistributed earnings of certain other foreign operations are permanently invested overseas.<br /><br />During the first quarter of 2009, the IRS completed its examination of the Company's 2005 and 2006 consolidated federal income tax returns, resulting in an increase to shareholders’ net income of $21 million ($20 million in continuing operations and $1 million in discontinued operations). This increase reflected a reduction in net unrecognized tax benefits of $8 million ($17 million reported in income tax expense, partially offset by a $9 million pre-tax charge) and a reduction of interest and penalties of $13 million (reported in income tax expense). <br /><br />Gross unrecognized tax benefits declined for the first six months of 2009 by $34 million. This decline was primarily due to completion of the previously referenced IRS examination which increased shareholders’ net income by $8 million. There were other non-audit related changes in net unrecognized tax benefits, resulting in a net increase to shareholders’ net income due to the reduction of unrecognized tax benefits of $2 million for the first six months of 2009. <br /><br />Over the next twelve months, the Company has determined it reasonably possible that the level of unrecognized tax benefits could increase or decrease significantly, subject to developments in certain matters in dispute with the IRS. It is also reasonably possible there could be a significant change in the level of valuation allowances recorded against deferred tax benefits of the reinsurance operations and certain unrealized investment losses within the next twelve months. The Company, however, is currently unable to reasonably estimate the potential impact of such changes. <br /><br />During the first quarter, final resolution was reached in one of the two disputed issues associated with the IRS examination of the Company’s 2003 and 2004 consolidated federal income tax returns. The second of these disputed matters remains unresolved and on June 4, 2009 the Company initiated litigation of this matter by filing a petition in the United States Tax Court. Due to the nature of the litigation process, the timing of the resolution of this matter is uncertain. Though the Company expects to prevail, unfavorable resolution of this litigation would result in a charge to shareholder’s net income of up to $15 million, representing net interest expense on the cumulative incremental tax for all affected years. In addition, there remain two unresolved issues from the IRS examination of the Company’s 2005 and 2006 consolidated federal income tax returns. The Company initiated a regulatory appeal of these matters on March 31, 2009 by filing a formal protest of the proposed adjustments. One of these unresolved issues is the same matter which remains in dispute from the prior IRS examination.<br /> <br />On May 7, 2009, the proposed 2010 federal budget was issued which included various specific income tax provisions that could affect the Company. Management is in the process of assessing the impact of these provisions, particularly those related to the U.S. taxation of foreign operations.<br /></p></font></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 16 ― Segment Information<br /><br />The Company's operating segments generally reflect groups of related products, except for the International segment which is generally based on geography. In accordance with GAAP, operating segments that do not require separate disclosure have been combined into Other Operations. The Company measures the financial results of its segments using “segment earnings (loss),” which subsequent to the implementation of SFAS No. 160, is defined as shareholders’ income (loss) from continuing operations excluding after-tax realized investment gains and losses. <br /><br />Summarized segment financial information was as follows:</p></font></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Three Months Ended</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-top: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>Six Months Ended </b></font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"> </font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td><td colspan="4" width="188" height="17" align="center" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>June 30,</b></font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><i>(In millions)</i></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2009 </b></font></td><td colspan="2" width="94" height="17" align="center" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;"><font size="2"><b>2008 </b></font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2"><b>Premiums and fees, Mail order pharmacy revenues and Other revenues</b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"><b> </b></font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="left" height="17"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Health Care</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3,240 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 3,420 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6,529 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 6,484 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Disability and Life</font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 689 </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 669 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,390 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 1,330 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">International</font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 467 </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 483 </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 906 </font></td><td style="background-color: #FFFFFF;" width="19" align="left" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 958 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Run-off Reinsurance</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (183)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 14 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (62)</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 71 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Other Operations</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 46 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 45 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 90 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 91 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Corporate</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (13)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (14)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (27)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> (27)</font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="20"><font size="2">Total</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="20"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="20"><font size="2"> 4,246 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="20"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="20"><font size="2"> 4,617 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="20"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="20"><font size="2"> 8,826 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="20"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="20"><font size="2"> 8,907 </font></td></tr><tr><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2"><b>Shareholders' income from continuing operations</b></font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Health Care</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 194 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 181 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 349 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2">$</font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 295 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="19"><font size="2">Disability and Life</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 93 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 73 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 156 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 141 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="19"><font size="2">International</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 64 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 48 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 106 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="19"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="19"><font size="2"> 100 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="17"><font size="2">Run-off Reinsurance</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 112 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 42 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> 86 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="17"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="17"><font size="2"> (147)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Other Operations</font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 21 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 22 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 40 </font></td><td style="background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 44 </font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Corporate</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (40)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (81)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (62)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (102)</font></td></tr><tr><td style="background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Segment Earnings</font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 444 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 285 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 675 </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> 331 </font></td></tr><tr><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="15"><font size="2">Realized investment losses, net of taxes</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (9)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (12)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (33)</font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="15"><font size="2"> </font></td><td style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="15"><font size="2"> (3)</font></td></tr><tr><td style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" width="355" align="left" height="18"><font size="2">Shareholders' income from continuing operations</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 435 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 273 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 642 </font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="19" align="right" height="18"><font size="2">$</font></td><td style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" width="75" align="right" height="18"><font size="2"> 328 </font></td></tr></table></div></body></html>
<html><head><meta content="text/html; charset=utf-8" /></head><body><div><font size="2"><p>Note 17 ― Contingencies and Other Matters<br /><br />The Company, through its subsidiaries, is contingently liable for various financial guarantees provided in the ordinary course of business.<br /><br />Financial Guarantees Primarily Associated with the Sold Retirement Benefits Business<br /><br />Separate account assets are contractholder funds maintained in accounts with specific investment objectives. The Company records separate account liabilities equal to separate account assets.  In certain cases, primarily associated with the sold retirement benefits business (which was sold in April 2004), the Company guarantees a minimum level of benefits for retirement and insurance contracts, written in separate accounts.  The Company establishes an additional liability if management believes that the Company will be required to make a payment under these guarantees.<br /> <br />The Company guarantees that separate account assets will be sufficient to pay certain retiree or life benefits.  The sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations.  This percentage varies depending on the asset class within a sponsoring employer’s portfolio (for example, a bond fund would require a lower percentage than a riskier equity fund) and thus will vary as the composition of the portfolio changes.  If employers do not maintain the required levels of separate account assets, the Company or an affiliate of the buyer has the right to redirect the management of the related assets to provide for benefit payments.  As of June 30, 2009, employers maintained assets that exceeded the benefit obligations. Benefit obligations under these arrangements were $1.8 billion as of June 30, 2009.  Approximately 76% of these guarantees are reinsured by an affiliate of the buyer of the retirement benefits business. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. There were no additional liabilities required for these guarantees as of June 30, 2009.  Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.  See Note 8 for further information on the fair value hierarchy.</p></font></div><div><font size="2"><p>Other Financial Guarantees<br /><br />Guaranteed minimum income benefit contracts. The Company's reinsurance operations, which were discontinued in 2000 and are now an inactive business in run-off mode, reinsured minimum income benefits under certain variable annuity contracts issued by other insurance companies.  A contractholder can elect the guaranteed minimum income benefit (GMIB) within 30 days of any eligible policy anniversary after a specified contractual waiting period. The Company’s exposure arises when the guaranteed annuitization benefit exceeds the annuitization benefit based on the policy’s current account value.  At the time of annuitization, the Company pays the excess (if any) of the guaranteed benefit over the benefit based on the current account value in a lump sum to the direct writing insurance company.<br /><br />In periods of declining equity markets or declining interest rates, the Company’s GMIB liabilities increase.  Conversely, in periods of rising equity markets and rising interest rates, the Company’s liabilities for these benefits decrease.<br /><br />The Company estimates the fair value of the GMIB assets and liabilities using assumptions for market returns and interest rates, volatility of the underlying equity and bond mutual fund investments, mortality, lapse, annuity election rates, non-performance risk, and risk and profit charges.  Assumptions were updated beginning with January 1, 2008 to reflect the requirements of SFAS No. 157.  See Note 8 for additional information on how fair values for these liabilities and related receivables for retrocessional coverage are determined.<br /><br />The Company is required to disclose the maximum potential undiscounted future payments for guarantees related to minimum income benefits.  Under these guarantees, the future payment amounts are dependent on equity and bond fund market and interest rate levels prior to and at the date of annuitization election, which must occur within 30 days of a policy anniversary, after the appropriate waiting period.  Therefore, the future payments are not fixed and determinable under the terms of the contract.  Accordingly, the Company has estimated the maximum potential undiscounted future payments using hypothetical adverse assumptions, defined as follows:<br /><br />No annuitants surrendered their accounts;<br />All annuitants lived to elect their benefit;<br />All annuitants elected to receive their benefit on the next available date (2009 through 2014); and<br />All underlying mutual fund investment values remained at the June 30, 2009 value of $1.2 billion with no future returns.<br /><br />The maximum potential undiscounted payments that the Company would make under those assumptions would aggregate $1.5 billion before reinsurance recoveries.  The Company expects the amount of actual payments to be significantly less than this hypothetical undiscounted aggregate amount.  The Company has retrocessional coverage in place from two external reinsurers which covers 55% of the exposures on these contracts.  The Company bears the risk of loss if its retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company.</p></font></div><div><font size="2"><p>Certain Other Guarantees. The Company had indemnification obligations to lenders of up to $243 million as of June 30, 2009 related to borrowings by certain real estate joint ventures which the Company either records as an investment or consolidates. These borrowings, which are nonrecourse to the Company, are secured by the joint ventures’ real estate properties with fair values in excess of the loan amounts and mature at various dates beginning in 2009 through 2017.  The Company’s indemnification obligations would require payment to lenders for any actual damages resulting from certain acts such as unauthorized ownership transfers, misappropriation of rental payments by others or environmental damages.  Based on initial and ongoing reviews of property management and operations, the Company does not expect that payments will be required under these indemnification obligations. Any payments that might be required could be recovered through a refinancing or sale of the assets.  In some cases, the Company also has recourse to partners for their proportionate share of amounts paid.  There were no liabilities required for these indemnification obligations as of June 30, 2009.<br /><br />As of June 30, 2009, the Company guaranteed that it would compensate the lessors for a shortfall of up to $44 million in the market value of certain leased equipment at the end of the lease.  Guarantees of $28 million expire in 2012 and $16 million expire in 2016.  The Company had liabilities for these guarantees of $7 million as of June 30, 2009.<br /><br />As part of the reinsurance and administrative service arrangements acquired from Great West Life and Annuity, Inc., the Company is responsible to pay claims for the group medical and long-term disability business of Great-West Healthcare and collect related amounts due from their third party reinsurers. Any such amounts not collected will represent additional assumed liabilities of the Company and decrease shareholders’ net income if and when these amounts are determined uncollectible. At June 30, 2009, there were no receivables recorded for paid claims due from third party reinsurers for this business and unpaid claims related to this business were estimated at $25 million.<br /><br />The Company had indemnification obligations as of June 30, 2009 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, the filing of tax returns, compliance with law or the identification of outstanding litigation.  These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation.  In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable.  The Company does not believe that it is possible to determine the maximum potential amount due under these obligations, since not all amounts due under these indemnification obligations are subject to limitation.  There were no liabilities required for these indemnification obligations as of June 30, 2009.<br /><br />The Company does not expect that these guarantees will have a material adverse effect on the Company’s consolidated results of operations, liquidity or financial condition.<br /></p></font></div><div><font size="2"><p>Regulatory and Industry Developments<br /><br />Employee benefits regulation.  The business of administering and insuring employee benefit programs, particularly health care programs, is heavily regulated by federal and state laws and administrative agencies, such as state departments of insurance and the Federal Departments of Labor and Justice, as well as the courts.  Regulation and judicial decisions have resulted in changes to industry and the Company’s business practices and will continue to do so in the future.  In addition, the Company’s subsidiaries are routinely involved with various claims, lawsuits and regulatory and IRS audits and investigations that could result in financial liability, changes in business practices, or both.  Health care regulation in its various forms could have an adverse effect on the Company’s health care operations if it inhibits the Company’s ability to respond to market demands or results in increased medical or administrative costs without improving the quality of care or services.<br /><br />Other possible regulatory and legislative changes or judicial decisions that could have an adverse effect on the Company’s employee benefits businesses include:<br /><br />additional mandated benefits or services that increase costs;<br />legislation that would grant plan participants broader rights to sue their health plans;<br />changes in public policy and in the political environment, which could affect state and federal law, including legislative and regulatory proposals related to health care issues, which could increase cost and affect the market for the Company’s health care products and services; and pension legislation, which could increase pension cost;<br />changes in Employee Retirement Income Security Act (ERISA) regulations resulting in increased administrative burdens and costs;<br />additional restrictions on the use of prescription drug formularies and rulings from pending purported class action litigation, which could result in adjustments to or the elimination of the average wholesale price or “AWP” of pharmaceutical products as a benchmark in establishing certain rates, charges, discounts, guarantees and fees for various prescription drugs;<br />additional privacy legislation and regulations that interfere with the proper use of medical information for research, coordination of medical care and disease and disability management;<br />additional variations among state laws mandating the time periods and administrative processes for payment of health care provider claims;<br />legislation that would exempt independent physicians from antitrust laws; and<br />changes in federal tax laws, such as amendments that could affect the taxation of employer provided benefits.<br /><br />The employee benefits industry remains under scrutiny by various state and federal government agencies and could be subject to government efforts to bring criminal actions in circumstances that could previously have given rise only to civil or administrative proceedings.<br /> <br />Concentration of risk.  For the Company’s International segment, South Korea is the single largest geographic market. South Korea generated 29% of the segment’s revenues for the second quarter of 2009 and 27% for the six months ended June 30, 2009.  South Korea generated 55% of the segment’s earnings for the second quarter of 2009 and 46% of the segment’s earnings for the six months ended June 30, 2009.  Due to the concentration of business in South Korea, the International segment is exposed to potential losses resulting from economic and geopolitical developments in that country, as well as foreign currency movements affecting the South Korean currency, which could have a significant impact on the segment’s results and the Company’s consolidated financial results.<br /><br />Litigation and Other Legal Matters<br /><br />The Company is routinely involved in numerous claims, lawsuits, regulatory and IRS audits, investigations and other legal matters arising, for the most part, in the ordinary course of the business of administering and insuring employee benefit programs including payments to providers and benefit level disputes. Litigation of income tax matters is accounted for under the provisions of FIN No. 48, Accounting for Uncertainty in Income Taxes. Further information can be found in Note 15.  An increasing number of claims are being made for substantial non-economic, extra-contractual or punitive damages.  The outcome of litigation and other legal matters is always uncertain, and outcomes that are not justified by the evidence can occur.  The Company believes that it has valid defenses to the legal matters pending against it and is defending itself vigorously.  Nevertheless, it is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to the Company’s consolidated results of operations, liquidity or financial condition.<br /><br />Managed care litigation. On April 7, 2000, several pending actions were consolidated in the United States District Court for the Southern District of Florida in a multi-district litigation proceeding captioned In re Managed Care Litigation challenging, in general terms, the mechanisms used by managed care companies in connection with the delivery of or payment for health care services. The consolidated cases include Shane v. Humana, Inc., et al., Mangieri v. CIGNA Corporation, Kaiser and Corrigan v. CIGNA Corporation, et al. and Amer. Dental Ass’n v. CIGNA Corp. et al. <br /><br />In 2004, the court approved a settlement agreement between the physician class and CIGNA. However, a dispute over disallowed claims under the settlement submitted by a representative of certain class member physicians is in arbitration. Separately, in 2005, the court approved a settlement between CIGNA and a class of non-physician health care providers. Only the American Dental Association case remains unresolved. On March 2, 2009, the Court dismissed five of the six counts of the complaint with prejudice. On March 20, 2009, the Court declined to exercise supplemental jurisdiction over the remaining state law claim and dismissed the case. Plaintiffs filed a notice of appeal on April 17, 2009. CIGNA denies the allegations and will continue to vigorously defend itself.<br /><br />CIGNA has received insurance recoveries related to this litigation. In 2008, the trial court ruled that the Company is not entitled to insurance recoveries from one of the two insurers from which the Company is pursuing further recoveries. CIGNA appealed that decision and on June 3, 2009, the Superior Court of Pennsylvania reversed the trial court’s decision, remanding the case to the trial court for further proceedings. The insurer continues to challenge this decision and is seeking re-argument before the Superior Court of Pennsylvania. <br /><br />Broker compensation. Beginning in 2004, the Company, other insurance companies and certain insurance brokers received subpoenas and inquiries from various regulators, including the New York and Connecticut Attorneys General, the Florida Office of Insurance Regulation, the U.S. Attorney’s Office for the Southern District of California and the U.S. Department of Labor relating to their investigations of insurance broker compensation. CIGNA is cooperating with the inquiries and investigations.<br /><br />On August 1, 2005, two CIGNA subsidiaries, Connecticut General Life Insurance Company and Life Insurance Company of North America, were named as defendants in a multi-district litigation proceeding, In re Insurance Brokerage Antitrust Litigation, consolidated in the United States District Court for the District of New Jersey. The complaint alleges that brokers and insurers conspired to hide commissions, increasing the cost of employee benefit plans, and seeks treble damages and injunctive relief. Numerous insurance brokers and other insurance companies are named as defendants. In 2008, the court ordered the clerk to enter judgment against plaintiffs and in favor of the defendants. Plaintiffs have filed an appeal. CIGNA denies the allegations and will continue to vigorously defend itself.<br /><br />Amara cash balance pension plan litigation. On December 18, 2001, Janice Amara filed a class action lawsuit, now captioned Janice C. Amara, Gisela R. Broderick, Annette S. Glanz, individually and on behalf of all others similarly situated v. CIGNA Corporation and CIGNA Pension Plan, in the United States District Court for the District of Connecticut against CIGNA Corporation and the CIGNA Pension Plan on behalf of herself and other similarly situated participants in the CIGNA Pension Plan affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various ERISA violations including, among other things, that the Plan’s cash balance formula discriminates against older employees; the conversion resulted in a wear away period (during which the pre-conversion accrued benefit exceeded the post-conversion benefit); and these conditions are not adequately disclosed in the Plan. <br /><br />In 2008, the court issued a decision finding in favor of CIGNA Corporation and the CIGNA Pension Plan on the age discrimination and wear away claims. However, the court found in favor of the plaintiffs on many aspects of the disclosure claims and ordered an enhanced level of benefits from the existing cash balance formula for the majority of the class, requiring class members to receive their frozen benefits under the pre-conversion CIGNA Pension Plan and their accrued benefits under the post-conversion CIGNA Pension Plan.  The court also ordered, among other things, pre-judgment and post-judgment interest.  The court has stayed implementation of the decision until the parties’ appeals have been exhausted.    Both parties have appealed the court’s decisions.  In the second quarter of 2008, the Company recorded a charge of $80 million pre-tax ($52 million after-tax), which principally reflects the Company's current best estimate of the liabilities related to the court order.  The Company will continue to vigorously defend itself in this case.<br /><br />Ingenix. On February 13, 2008, State of New York Attorney General Andrew M. Cuomo announced an industry-wide investigation into the use of data provided by Ingenix, Inc., a subsidiary of UnitedHealthcare, used to calculate payments for services provided by out-of-network providers.  The Company received four subpoenas from the New York Attorney General’s office in connection with this investigation and responded appropriately. On February 17, 2009, the Company entered into an Assurance of Discontinuance resolving the investigation. In connection with the industry-wide resolution, the Company will contribute $10 million to the establishment of a new non-profit company that will compile and provide the data currently provided by Ingenix. In addition, on March 28, 2008, the Company received a voluntary request for production of documents from the Connecticut Attorney General’s office seeking certain out-of-network claim payment information.  The Company has responded appropriately.   Since January 2009, the Company has received and is responding to inquiries regarding the use of Ingenix data from the Texas Attorney General and the Departments of Insurance in Illinois, Florida, Vermont, Georgia, Pennsylvania, Connecticut and Alaska.<br /><br />The Company is also a defendant in two putative class actions brought on behalf of members (Franco et al. v. Connecticut General Life Insurance Co. et al. and Chazen et al. v.  Connecticut General Life Insurance Co. et al.), and five putative class actions brought on behalf of providers (AMA et al. v. Connecticut General Life Insurance Co. et al., Shiring et al. v. CIGNA Corp. et al., Pain Management and Surgery Center of Southern Indiana et al. v. CIGNA Corp. et al, Higashi v. Connecticut General Life Insurance Co. et al. and North Peninsula Surgical Center v. Connecticut General Life Insurance Co. et al.), asserting that due to the use of Ingenix data, the Company improperly underpaid claims, an industry-wide issue. The Franco putative class action, filed on March 22, 2004 in the United States District Court for the District of New Jersey, asserts claims under ERISA and the RICO statute on behalf of members of CIGNA plans. Plaintiff seeks to recover alleged underpayments in relation to out-of-network claims for the period from 1998 to present. In 2008, the court denied the Company’s motion to dismiss for lack of standing while indicating that the named plaintiff’s unique situation might undermine her adequacy as a class representative. On August 15, 2008, a second putative member class action was filed in the same court as Franco on behalf of a different class representative, David Chazen. The Chazen complaint asserts claims under ERISA and New Jersey state law for the time period 2002 to present. On February 9, 2009, the AMA putative provider class action was filed in the same court as Franco and Chazen. The complaint asserts claims under ERISA, the RICO statute and the Sherman Antitrust Act for the time period 2005 to the present. On April 17, 2009, a second putative provider class action, Shiring, was filed in the same court, asserting claims on behalf of non-physician providers for the time period 2005 to present. On June 17, 2009, the court consolidated the Franco, Chazen, AMA and Shiring cases and issued a case management order providing for coordinated discovery, with class certification to be litigated in March and April of 2010. On April 14, 2009, a third putative provider class action, Pain Management and Surgery Center of Southern Indiana, was filed in the United States District Court for the Southern District of Indiana, asserting claims under ERISA, the RICO statute and the Sherman Antitrust Act, which was amended on June 26, 2009. The alleged damages period is 2005 to the present. On June 17, 2009, a fourth putative provider class action, Higashi, was filed in the United States District Court for the Central District of California, asserting claims under the RICO statute and the Sherman Antitrust Act for the time period 2005 to the present. On July 6, 2009, a fifth putative provider class action, North Peninsula Surgical Center, was also filed in the United States District Court for the Central District of California, asserting claims under ERISA, the Sherman Antitrust Act and state unfair competition law for the time period 2005 to the present. <br /><br />On June 9, 2009, CIGNA filed motions in the United States District Court for the Southern District of Florida to enforce the Managed Care MDL settlement by enjoining the RICO and antitrust causes of action alleged in the AMA, Shiring and Pain Management cases on the ground that they arose prior to and were released in the April, 2004 settlement. A parallel motion was filed in the Higashi matter on July 28, 2009. <br /><br />It is reasonably possible that others could initiate additional litigation or additional regulatory action against the Company with respect to use of data provided by Ingenix, Inc. The Company denies the allegations asserted in the investigations and litigation and will vigorously defend itself in these matters.<br /><br /><br /></p></font></div></body></html>
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