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<div style="font-size:12pt"><p>Note 1 — Description of Business<br /><br />CIGNA Corporation together with its subsidiaries (referred to collectively as “the Company”) constitutes one of the largest investor-owned health service organizations in the United States. Its subsidiaries are major providers of health care and related benefits, the majority of which are offered through the workplace, including health care products and services such as medical coverages, pharmacy, behavioral health, dental benefits, and disease management; group disability, life and accident insurance; and disability and workers’ compensation case management and related services. In addition, the Company has an international operation that offers life, accident and supplemental health insurance products and international health care products and services to businesses and individuals in selected markets. The Company also has certain inactive businesses, including a run-off reinsurance operation. </p></div>
<div style="font-size:12pt"><p>Note 2 — Summary of Significant Accounting Policies<br /><br />A.        Basis of Presentation<br /><br />The consolidated financial statements include the accounts of CIGNA Corporation, its significant subsidiaries, and variable interest entities for which the Company has determined it is the primary beneficiary. Intercompany transactions and accounts have been eliminated in consolidation.  <br /><br />These consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Amounts recorded in the consolidated financial statements reflect management’s estimates and assumptions about medical costs, investment valuation, interest rates and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates.<br /><br />In preparing these consolidated financial statements, the Company has evaluated events that occurred between the balance sheet date and February 25, 2010.<br /><br />Certain reclassifications have been made to prior period amounts to conform to the presentation of 2009 amounts. In addition, certain amounts have been restated as a result of the adoption of new accounting pronouncements.<br /><br />Discontinued operations. Summarized financial data for discontinued operations in 2009 primarily represents a tax benefit from a past divestiture resolved at the completion of the 2005 and 2006 IRS examinations.<br /><br />Discontinued operations for 2008 primarily represents an after-tax gain of $3 million from the settlement of certain issues related to a past divestiture.<br /><br />Discontinued operations for 2007 primarily reflects:<br /><br /></p><ul><li>impairment losses related to the dispositions of several Latin American insurance operations as discussed in Note 3; and<br /></li><li>realized gains on the disposition of certain directly-owned real estate investments as discussed in Note 14.<br /></li></ul><p><br />Unless otherwise indicated, amounts in these Notes exclude the effects of discontinued operations.<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Income before income (taxes) benefits</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 25 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Income (taxes) benefits</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (7)</td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="446">Income from operations</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 18 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Impairment loss, net of tax</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (23)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Income (loss) from discontinued operations, net of taxes</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (5)</td></tr></table><p>Variable interest entities. As of December 31, 2009 and 2008 the Company determined it was not a primary beneficiary in any variable interest entities. <br /><br />B.        Recent Accounting Pronouncements <br /><br />Accounting Standards Codification. The Financial Accounting Standards Board (“FASB”) has established the Accounting Standards Codification (“Codification” or “ASC”) as the single source of authoritative accounting guidance effective for financial reporting in 2009. Therefore, the Company has used the Codification section or description when referring to GAAP.<br /><br />Other-than-temporary impairments. On April 1, 2009, the Company adopted the FASB’s updated guidance for evaluating whether an impairment is other than temporary for fixed maturities with declines in fair value below amortized cost (ASC 320). 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 these fixed maturities). 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 was required for previously impaired fixed maturities that have a non-credit loss as of the date of adoption, net of 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 12 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 the FASB’s updated guidance on accounting for noncontrolling interests (ASC 810) through retroactive restatement of prior financial statements and reclassified $3 million of noncontrolling interest as of January 1, 2007 from Accounts payable, accrued expenses and other liabilities to Noncontrolling interest in total equity. In addition, net income attributable to the noncontrolling interest of $2 million in 2008 and $3 million in 2007 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 the FASB’s updated earnings per share guidance (ASC 260) for determining participating securities that requires unvested restricted stock awards containing 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 guidance. See Note 4 for the effects of this guidance on previously reported EPS amounts.<br /><br />Business combinations. Effective January 1, 2009, the Company adopted the FASB’s guidance on accounting for business combinations (ASC 805) that 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 expanded its disclosures on derivatives and hedging activities to comply with the FASB’s updated guidance (ASC 815) that requires the Company to disclose the purpose for using derivative instruments, their accounting treatment and related effects on financial condition, results of operations and liquidity. See Note 13 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 the FASB’s fair value disclosure and measurement guidance (ASC 820) that 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 the fair value guidance in 2008 to provide additional guidance for determining the fair value of a financial asset when the market for that instrument is not active. In 2009, the Company also adopted FASB guidance on measuring the fair value of non-financial assets and liabilities, certain financial liabilities and investments in certain entities using their net asset value or its equivalent. See Note 11 for information on the Company’s fair value measurements. In addition, in 2009 the Company adopted new FASB guidance on expanded fair value disclosures for assets supporting its pension and other postretirement benefit plans. See Note 10 for further information.<br /><br />The Company carries certain financial instruments at fair value in the financial statements including approximately $14 billion in invested assets at December 31, 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 this fair value guidance, 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 and non-financial assets and liabilities from adopting the FASB’s 2008 and 2009 amendments to their fair value guidance.<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.  Certain of these assumptions (primarily related to annuitant behavior) have 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 several underlying assumptions (primarily interest rates) will be based on current market-observable inputs which will likely change each period.  See Note 11 for additional information.<br /><br />Transfers of financial assets. In 2009, the FASB issued guidance for accounting for transfers of financial assets (ASC 860) that 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. On adoption, the Company does not expect a material effect to its results of operations or financial condition.<br /><br />Variable interest entities. In 2009, the FASB amended guidance (ASC 810) that requires quarterly qualitative analysis to determine whether a variable interest entity must be consolidated by the Company primarily based on the entity’s purpose and design, the Company’s ability to direct the entity’s activities that most significantly impact its economic performance, and the Company’s right or obligation to participate in that performance. A variable interest entity is insufficiently capitalized or is not controlled through voting or similar rights. These amendments must also be applied to qualifying special-purpose entities formerly excluded from such analysis. Any changes in the Company’s consolidated entities resulting from these requirements may be recognized through an adjustment to retained earnings for the cumulative effect of implementing at the January 1, 2010 date of adoption or through retrospective restatement of prior period financial statements. In addition, this guidance requires the Company to disclose any significant judgments and assumptions made in determining whether it must consolidate a variable interest entity. On adoption, the Company does not expect a material effect to its results of operations or financial condition.<br /><br />Fair value option.  Effective January 1, 2008, the Company adopted FASB updated guidance for the fair value option for financial assets and liabilities (ASC 825), which permits entities to choose fair value measurement at the time of acquisition of many financial instruments, including insurance contracts, with subsequent changes in fair value to be reported in net income for the period. The adoption of this guidance did not impact the Company's consolidated financial statements, as no items were elected for fair value measurement.  <br /><br />Uncertain tax positions. Effective January 1, 2007, the Company implemented updated FASB guidance (ASC 740) on accounting for uncertain tax positions that are &quot;more likely than not&quot; to result in a benefit if challenged by the Internal Revenue Service (“IRS”). The cumulative effect of implementing the guidance for unrecognized tax benefits decreased opening retained earnings by $29 million. See Note 19 for additional information. <br /><br />Certain financial instruments. Effective January 1, 2007, the Company adopted updated FASB guidance on accounting for certain hybrid financial instruments (ASC 815). At adoption, the Company elected to fair value certain existing investments in preferred stock and debt securities with call or conversion features (hybrid securities) and future changes in the fair value of these investments will be reported in net income. As a result, the Company reclassified $12 million after-tax of unrealized appreciation from the opening balance of accumulated other comprehensive loss to retained earnings with no net change to total shareholders' equity. See Note 12(A) for a review of instruments that the Company has elected to fair value. <br />        </p><p>C.        Investments<br /><br />The Company's accounting policies for investment assets are discussed below:<br /><br />Fixed maturities and equity securities. Fixed maturities include bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor. Equity securities include common stocks and preferred stocks that are non-redeemable or redeemable only by the issuer. These investments are primarily classified as available for sale and are carried at fair value with changes in fair value recorded in accumulated other comprehensive income (loss) within shareholders’ equity. Beginning April 1, 2009, when the Company determines it does not expect to recover the amortized cost basis of fixed maturities with declines in fair value (even if it does not intend to sell or will not be required to sell these fixed maturities), the credit portion of the impairment loss is recognized in net income and the non-credit portion, if any, is recognized in a separate component of shareholders’ equity. The credit portion is the difference between the amortized cost basis of the fixed maturity and the net present value of its projected future cash flows. Projected future cash flows are based on qualitative and quantitative factors, including probability of default, and the estimated timing and amount of recovery. For mortgage and asset-backed securities, estimated future cash flows are based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. Equity securities and, prior to April 1, 2009, fixed maturities were considered impaired, and their cost basis was written down to fair value through earnings, when management did not expect to recover the amortized cost, or if the Company could not demonstrate its intent or ability to hold the investment until full recovery. Fixed maturities and equity securities also include certain trading and hybrid securities carried at fair value with changes in fair value reported in realized investment gains and losses, beginning after the implementation of updated guidance on certain hybrid financial instruments on January 1, 2007. The Company elected fair value accounting for certain hybrid securities to simplify accounting and mitigate volatility in results of operations and financial condition.<br /><br />Commercial mortgage loans. Mortgage loans held by the Company are made exclusively to commercial borrowers, therefore there is no exposure to either prime or sub-prime residential mortgages. Generally, commercial mortgage loans are carried at unpaid principal balances and are issued at a fixed rate of interest. Commercial mortgage loans held for sale are carried at the lower of unpaid principal balance or fair value with any resulting valuation allowance reported in realized investment gains and losses. Commercial mortgage loans are considered impaired when it is probable that the Company will not collect amounts due according to the terms of the original loan agreement. Impaired loans are carried at the lower of unpaid principal or fair value of the underlying collateral. Valuation reserves reflect any changes in fair value. The Company estimates the fair value of the underlying collateral using internal valuations generally based on discounted cash flow analyses. <br /><br />Policy loans. Policy loans are carried at unpaid principal balances.<br /><br />Real estate. Investment real estate can be “held and used” or “held for sale”. The Company accounts for real estate as follows: <br /><br /></p><ul><li>Real estate &quot;held and used&quot; is expected to be held longer than one year and includes real estate acquired through the foreclosure of commercial mortgage loans. The Company carries real estate held and used at depreciated cost less any write-downs to fair value due to impairment and assesses impairment when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally calculated using the straight-line method based on the estimated useful life of the particular real estate asset. <br /></li><li>Real estate is &quot;held for sale&quot; when a buyer’s investigation is completed, a deposit has been received and the sale is expected to be completed within the next year. Real estate held for sale is carried at the lower of carrying value or current fair value, less estimated costs to sell, and is not depreciated. Valuation reserves reflect any changes in fair value.<br /></li><li>The Company uses several methods to determine the fair value of real estate, but relies primarily on discounted cash flow analyses and, in some cases, third-party appraisals.<br /></li></ul><p><br />At the time of foreclosure, properties are reclassified from commercial mortgage loans to real estate. The Company rehabilitates, re-leases and sells foreclosed properties. This process usually takes from two to four years unless management considers a near-term sale preferable.<br /><br />Other long-term investments. Other long-term investments include investments in unconsolidated entities. These entities include certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company’s ownership percentage of reported income or loss in cases where the Company has significant influence, otherwise the investment is carried at cost. Income from certain entities is reported on a one quarter lag depending on when their financial information is received. Also included in other long-term investments are loans to unconsolidated real estate entities secured by the equity interests of these real estate entities, which are carried at unpaid principal balances (mezzanine loans). These other long-term investments are considered impaired, and written down to their fair value, when cash flows indicate that the carrying value may not be recoverable. Fair value is generally determined based on a discounted cash flow analysis. <br /><br />Additionally, other long-term investments include interest rate and foreign currency swaps carried at fair value. See Note 13 for information on the Company’s accounting policies for these derivative financial instruments. <br /><br />Short-term investments. Investments with maturities of less than one year from time of purchase are classified as short-term, available for sale and carried at fair value, which approximates cost. <br /><br />Derivative financial instruments. Note 13 discusses the Company’s accounting policies for derivative financial instruments.<br /><br />Net investment income. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company stops recognizing interest income when interest payments are delinquent or when certain terms (interest rate or maturity date) of the investment have been restructured. Net investment income on these investments is only recognized when interest payments are actually received. Interest and dividends earned on trading and hybrid securities are included in net investment income.<br /><br />Investment gains and losses. Realized investment gains and losses result from sales, investment asset write-downs, changes in the fair values of trading and hybrid securities and certain derivatives and changes in valuation reserves, based on specifically identified assets. Realized investment gains and losses on the disposition of certain directly owned real estate investments are eliminated from ongoing operations and reported in discontinued operations when the operations and cash flows of the underlying assets are clearly distinguishable and the Company has no significant continuing involvement in their operations. <br /><br />Unrealized gains and losses on fixed maturities and equity securities carried at fair value (excluding trading and hybrid securities) and certain derivatives are included in accumulated other comprehensive income (loss), net of: <br /><br /></p><ul><li>amounts required to adjust future policy benefits for the run-off settlement annuity business; and<br /></li><li>deferred income taxes.<br /></li></ul><p><br /></p><ul><li>Cash and Cash Equivalents<br /></li></ul><p><br />Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase that are classified as held to maturity and carried at amortized cost. The Company reclassifies cash overdraft positions to “accounts payable, accrued expenses and other liabilities” when the legal right of offset does not exist.<br /><br /></p><ul><li>Premiums, Accounts and Notes Receivable and Reinsurance Recoverables<br /></li></ul><p><br />Premiums, accounts and notes receivable are reported net of an allowance for doubtful accounts of $43 million as of December 31, 2009 and $50 million as of December 31, 2008. Reinsurance recoverables are estimates of amounts that the Company will receive from reinsurers and are recorded net of an allowance for unrecoverable reinsurance of $15 million as of December 31, 2009 and $23 million as of December 31, 2008. The Company estimates these allowances for doubtful accounts for premiums, accounts and notes receivable, as well as for reinsurance recoverables, using management's best estimate of collectibility, taking into consideration the aging of receivables, historical collection patterns and other economic factors. <br /><br /></p><ul><li>Deferred Policy Acquisition Costs<br /></li></ul><p><br />Acquisition costs include sales compensation, commissions, direct response marketing, telemarketing, premium taxes and other costs that the Company incurs in connection with new and renewal business. Depending on the product line they relate to, the Company records acquisition costs in different ways. Acquisition costs for:<br /><br /></p><ul><li>Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contracts.<br /></li><li>Annuity and other individual life insurance (primarily international) and group health indemnity products are deferred and amortized, generally in proportion to the ratio of periodic revenue to the estimated total revenues over the contract periods.<br /></li><li>Other products are expensed as incurred.<br /></li></ul><p><br />For universal life, annuity and other individual products, management estimates the present value of future revenues less expected payments. For group health indemnity products, management estimates the sum of future expected claims and related costs less unearned premiums and anticipated net investment income. If management’s estimates are less than the deferred costs, the Company reduces deferred policy acquisition costs and records an expense. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts. The Company recorded in other operating expenses amortization for policy acquisition costs of $299 million in 2009, $314 million in 2008 and $242 million in 2007. There are no deferred policy acquisition costs attributable to the sold individual life insurance and annuity and retirement businesses or the run-off reinsurance operations. <br /><br /></p><ul><li>Property and Equipment <br /></li></ul><p><br />Property and equipment is carried at cost less accumulated depreciation. When applicable, cost includes interest, real estate taxes and other costs incurred during construction. Also included in this category is internal-use software that is acquired, developed or modified solely to meet the Company’s internal needs, with no plan to market externally. Costs directly related to acquiring, developing or modifying internal-use software are capitalized.<br /><br />The Company calculates depreciation and amortization principally using the straight-line method based on the estimated useful life of each asset as follows: buildings and improvements, 1 year to 40 years; and equipment and software, 1 year to 10 years. See Note 9 for additional information.<br /><br /></p><ul><li>Goodwill <br /></li></ul><p><br />Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. Substantially all goodwill relates to the Health Care segment. The Company evaluates goodwill for impairment annually during the third quarter at the reporting unit level, based on discounted cash flow analyses and writes it down through results of operations if impaired. Consistent with prior years, the Company’s evaluations used the best information available at the time, including reasonable assumptions and projections consistent with those used in its annual planning process. The discounted cash flow analyses used a range of discount rates that correspond with the Company’s weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within the Health Care segment. The resulting discounted cash flow analyses indicated an estimated fair value for the reporting units of the Health Care segment exceeding their carrying values, including goodwill and other intangibles. Finally, the Company determined that no events or circumstances occurred subsequent to the annual evaluation of goodwill that would more likely than not reduce the fair value of the reporting units of the Health Care segment below their carrying values. See Note 9 for additional information.  <br /><br /></p><ul><li>Other Assets, including Other Intangibles<br /></li></ul><p><br />Other assets consist of various insurance-related assets and the gain position of certain derivatives, primarily GMIB assets. The Company’s other intangible assets include purchased customer and producer relationships, provider networks, and trademarks. The Company amortizes other intangibles on an accelerated or straight-line basis over periods from 1 to 30 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred. See Note 9 for additional information.<br />  <br />J.        Separate Account Assets and Liabilities<br /><br />Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company’s other businesses. These separate account assets are carried at fair value with equal amounts for related separate account liabilities. The investment income, gains and losses of these accounts generally accrue to the contractholders and are not included in the Company’s revenues and expenses. Fees earned for asset management services are reported in premiums and fees.<br /><br />K.        Contractholder Deposit Funds<br /><br />Liabilities for contractholder deposit funds include deposits received from customers for investment-related and universal life products and investment earnings on their fund balances. These liabilities are adjusted to reflect administrative charges and, for universal life fund balances, mortality charges. <br /><br /></p><ul><li>Future Policy Benefits <br /></li></ul><p><br />Future policy benefits are liabilities for the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and primarily consist of reserves for annuity contracts, life insurance benefits, guaranteed minimum death benefit (“GMDB”) contracts and certain life, accident and health insurance products in our International operations.<br /><br />Obligations for annuities represent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies represent benefits to be paid to policyholders, net of future premiums to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality and surrenders, allowing for adverse deviation. Mortality, morbidity, and surrender assumptions are based on either the Company’s own experience or actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and future expectations, and range from 1.5% to 10%. Obligations for the run-off settlement annuity business include adjustments for investment returns consistent with requirements of GAAP when a premium deficiency exists. <br /><br />Certain reinsurance contracts contain guaranteed minimum death benefits under variable annuities issued by other insurance companies. These obligations represent the guaranteed death benefit in excess of the contractholder’s account values (based on underlying equity and bond mutual fund investments). These obligations are estimated based on assumptions regarding lapse, partial surrenders, mortality, interest rates (mean investment performance and discount rate), market volatility as well as investment returns and premiums, consistent with the requirements of GAAP when a premium deficiency exists. Lapse, partial surrenders, mortality, interest rates and volatility are based on management’s judgment considering the Company’s experience and future expectations. The results of futures contracts used in the GMDB equity hedge program are reflected in the liability calculation as a component of investment returns. See also Note 7 for additional information.<br /><br /></p><ul><li>Unpaid Claims and Claims Expenses <br /></li></ul><p><br />Liabilities for unpaid claims and claim expenses are estimates of payments to be made under insurance coverages (primarily long-term disability, workers’ compensation and life and health) for reported claims and for losses incurred but not yet reported. <br /><br />The Company develops these estimates for losses incurred but not yet reported using actuarial principles and assumptions based on historical and projected claim incidence patterns, claim size and the length of time over which payments are expected to be made. The Company consistently applies these actuarial principles and assumptions each reporting period, with consideration given to the variability of these factors, and 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.<br /><br />The Company's estimate of the liability for disability claims reported but not yet paid is primarily calculated as the present value of expected benefit payments to be made over the estimated time period that a policyholder remains disabled. The Company estimates the expected time period that a policyholder may be disabled by analyzing the rate at which an open claim is expected to close (claim resolution rate). Claim resolution rates may vary based upon the length of time a policyholder is disabled, the covered benefit period, cause of disability, benefit design and the policyholder's age, gender and income level. The Company uses historical resolution rates combined with an analysis of current trends and operational factors to develop current estimates of resolution rates. The reserve for the gross monthly disability benefits due to a policyholder is reduced (offset) by the income that the policyholder receives under other benefit programs, such as Social Security Disability Income, worker’s compensation, statutory disability or other group disability benefit plans. For awards of such offsets that have not been finalized, the Company estimates the probability and amount of the offset based on the Company's experience over the past three to five years.<br /><br />The Company discounts certain claim liabilities related to group long-term disability and workers’ compensation because benefit payments may be made over an extended period. Discount rate assumptions are based on projected investment returns for the asset portfolios that support these liabilities and range from 3.5% to 7.3%. When estimates change, the Company records the adjustment in benefits and expenses in the period in which the change in estimate is identified. Discounted liabilities associated with the long-term disability and certain workers’ compensation businesses were $3.1 billion at December 31, 2009 and $3.2 billion at December 31, 2008.<br /><br /></p><ul><li>Health Care Medical Claims Payable<br /></li></ul><p><br />Medical claims payable for the Health Care segment include both reported claims and estimates for losses incurred but not yet reported.<br /><br />The Company develops these estimates using actuarial principles and assumptions based on historical and projected claim payment patterns, medical cost trends, which are impacted by the utilization of medical services and the related costs of the services provided (unit costs), benefit design, seasonality, and other relevant operational factors. The Company consistently applies these actuarial principles and assumptions each reporting period, with consideration given to the variability of these factors, and 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. <br /><br />The Company's estimate of the liability for medical claims incurred but not yet reported is primarily calculated using historical claim payment patterns and expected medical cost trends. The Company analyzes the historical claim payment patterns by comparing the dates claims were incurred, generally the dates services were provided, to the dates claims were paid to determine “completion factors”, which are a measure of the time to process claims. A completion factor is calculated for each month of incurred claims. The Company uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. The Company estimates the ultimate liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. The difference between this estimate of the ultimate liability and the current paid claims data is the estimate of the remaining claims to be paid for each incurral month. These monthly estimates are aggregated and included in the Company's Health Care medical claims payable at the end of each reporting period. Completion factors are used to estimate the Health Care medical claims payable for all months where claims have not been completely resolved and paid, except for the most recent month as described below. <br /><br />Completion factors are impacted by several key items including changes in the level of claims processed electronically versus manually (auto-adjudication), changes in provider claims submission rates, membership changes and the mix of products. As noted, the Company uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period. It is possible that the actual completion rates for the current period will develop differently from historical patterns, which could have a material impact on the Company's medical claims payable and net income.<br /><br />Claims incurred in the most recent month have limited paid claims data, since a large portion of health care claims are not submitted to the Company for payment in the month services have been provided. This makes the completion factor approach less reliable for claims incurred in the most recent month. As a result, in any reporting period, for the estimates of the ultimate claims incurred in the most recent month, the Company primarily relies on medical cost trend analysis, which reflects expected claim payment patterns and other relevant operational considerations. Medical cost trend is impacted by several key factors including medical service utilization and unit costs and the Company’s ability to manage these factors through benefit design, underwriting, provider contracting and the Company's medical management initiatives. These factors are affected by changes in the level and mix of medical benefits offered, including inpatient, outpatient and pharmacy, the impact of copays and deductibles, changes in provider practices and changes in consumer demographics and consumption behavior. <br /><br />Because historical trend factors are often not representative of current claim trends, the trend experienced for the most recent history along with an analysis of emerging trends, have been taken into consideration in establishing the liability for Health Care medical claims payable at December 31, 2009 and 2008. It is possible that the actual medical trend for the current period will develop differently from that expected, which could have a material impact on the Company's medical claims payable and net income.<br /><br />For each reporting period, the Company evaluates key assumptions by comparing the assumptions used in establishing the medical claims payable to actual experience. When actual experience differs from the assumptions used in establishing the liability, medical claims payable are increased or decreased through current period net income. Additionally, the Company evaluates expected future developments and emerging trends which may impact key assumptions. The estimation process involves considerable judgment, reflecting the variability inherent in forecasting future claim payments. The adequacy of these estimates is highly sensitive to changes in the Company's key assumptions, specifically completion factors, which are impacted by actual or expected changes in the submission and payment of medical claims, and medical cost trends, which are impacted by actual or expected changes in the utilization of medical services and unit costs.<br /><br /></p><ul><li>Unearned Premiums and Fees<br /></li></ul><p><br />Premiums for life, accident and health insurance are recognized as revenue on a pro rata basis over the contract period. Fees for mortality and contract administration of universal life products are recognized ratably over the coverage period. The unrecognized portion of these amounts is recorded as unearned premiums and fees.<br /><br /></p><ul><li>Accounts Payable, Accrued Expenses and Other Liabilities<br /></li></ul><p><br />Accounts payable, accrued expenses and other liabilities consist principally of pension, other postretirement and postemployment benefits and various insurance-related liabilities, including amounts related to reinsurance contracts and insurance-related assessments that management can reasonably estimate. Accounts payable, accrued expenses and other liabilities also include certain overdraft positions and the loss position of certain derivatives, primarily for GMIB contracts (see Note 13). Legal costs to defend the Company’s litigation and arbitration matters are expensed when incurred in cases for which the Company cannot reasonably estimate the ultimate cost to defend. In cases for which the Company can reasonably estimate the cost to defend, these costs are recognized when the claim is reported.<br /><br /></p><ul><li>Translation of Foreign Currencies<br /></li></ul><p><br />The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies, which are generally their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilities into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in accumulated other comprehensive income (loss). The Company uses average monthly exchange rates during the year to translate revenues and expenses into U.S. dollars. <br /><br /></p><ul><li>Premiums and Fees, Revenues and Related Expenses<br /></li></ul><p><br />Premiums for life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recognized when incurred.<br /><br />Premiums for individual life insurance and individual and group annuity products, excluding universal life and investment-related products, are recognized as revenue when due. Benefits and expenses are matched with premiums.<br /><br />Revenue for investment-related products is recognized as follows:<br /><br /></p><ul><li>Net investment income on assets supporting investment-related products is recognized as earned. <br /></li><li>Contract fees, which are based upon related administrative expenses, are recognized in premiums and fees as they are earned ratably over the contract period.<br /></li></ul><p><br />Benefits and expenses for investment-related products consist primarily of income credited to policyholders in accordance with contract provisions.<br /><br />Revenue for universal life products is recognized as follows:<br /><br /></p><ul><li>Net investment income on assets supporting universal life products is recognized as earned.<br /></li><li>Fees for mortality and surrender charges are recognized as assessed, which is as earned.<br /></li><li>Administration fees are recognized as services are provided.<br /></li></ul><p><br />Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances. Expenses are recognized when claims are submitted, and income is credited in accordance with contract provisions. <br /><br />Contract fees and expenses for administrative services only programs and pharmacy programs and services are recognized as services are provided. Mail order pharmacy revenues and cost of goods sold are recognized as each prescription is shipped.<br /><br /></p><ul><li>Stock Compensation<br /></li></ul><p><br />The Company records compensation expense for stock awards and options over their vesting periods based on the estimated fair value of the stock options, which is calculated using an option-pricing model. Compensation expense is recorded for restricted stock grants and units over their vesting periods based on fair value, which is equal to the market price of the Company’s common stock on the date of grant.<br /><br /></p><ul><li>Participating Business<br /></li></ul><p><br />The Company’s participating life insurance policies entitle policyholders to earn dividends that represent a portion of the earnings of the Company’s life insurance subsidiaries. Participating insurance accounted for approximately 1% of the Company’s total life insurance in force at the end of 2009 and approximately 2% of the Company’s total life insurance in force at the end of 2008 and 2007. <br /><br /></p><ul><li>Income Taxes<br /></li></ul><p><br />The Company and its domestic subsidiaries file a consolidated United States federal income tax return. The Company's foreign subsidiaries file tax returns in accordance with foreign law. U.S. taxation of these foreign subsidiaries may differ in timing and amount from taxation under foreign laws. Reportable amounts, including credits for foreign tax paid by these subsidiaries, are reflected in the U.S. tax return of the affiliates' domestic parent. <br /><br />The Company recognizes deferred income taxes when the financial statement and tax-based carrying values of assets and liabilities are different and recognizes deferred income tax liabilities on the unremitted earnings of foreign subsidiaries that are not permanently invested overseas. For subsidiaries whose earnings are considered permanently invested overseas, income taxes are accrued at the local foreign tax rate. The Company establishes valuation allowances against deferred tax assets if it is more likely than not that the deferred tax asset will not be realized. The need for a valuation allowance is determined based on the evaluation of various factors, including expectations of future earnings and management’s judgment. Note 19 contains detailed information about the Company's income taxes. <br /><br />The Company recognizes interim period income taxes by estimating an annual effective tax rate and applying it to year-to-date results. The estimated annual effective tax rate is periodically updated throughout the year based on actual results to date and an updated projection of full year income. Although the effective tax rate approach is generally used for interim periods, taxes on significant, unusual and infrequent items are recognized at the statutory tax rate entirely in the period the amounts are realized. <br /></p></div>
<div style="font-size:12pt"><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 /></p><ul><li>Great-West Healthcare Acquisition  <br /></li></ul><p><br />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 accordance with the FASB’s guidance on accounting for business combinations, 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. Accordingly, approximately $290 million was allocated to intangible assets, primarily customer relationships and internal-use software. The weighted average amortization period was 9 years for customer relationships and 6 years for internal-use software. The remainder, net of tangible net assets acquired, was goodwill which approximated $1.1 billion and was allocated entirely to the Health Care segment. Substantially all of the goodwill is tax deductible and is being amortized over 15 years for federal income tax purposes. <br /><br /><br />The condensed balance sheet of Great-West Healthcare at the acquisition date was as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"><i>(In millions)</i></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Investments</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 147 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Cash and cash equivalents</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 55 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Premiums, accounts and notes receivable</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 226 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Reinsurance recoverables</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 12 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Property and equipment (primarily capitalized software)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 142 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Deferred income taxes</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 7 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Goodwill</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,095 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Other assets, including other intangibles</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 151 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">  Total assets acquired</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,835 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Future policy benefits</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 78 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Unpaid claims and claim expenses</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 15 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Health Care medical claims payable</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 90 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">Accounts payable, accrued expenses and other liabilities (1)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 278 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614">  Total liabilities acquired</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 461 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Net assets acquired</td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,374 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614"><i>(1) Includes $18 million of liabilities related to integration activities: severance of $14 million and consolidation of facilities of $4 million.</i></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr></table><p>The results of Great-West Healthcare have been 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, 2007.  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 the date indicated or what such results would be for any future periods.<br />        <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>(Unaudited)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Year Ended December 31, </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions, except per share amounts)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total revenues</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19,469 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19,173 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Shareholders' income from continuing operations</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 309 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,224 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Shareholders' net income</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 313 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,219 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Earnings per share:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">  Shareholders' income from continuing operations</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">    Basic</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.11 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4.27 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">    Diluted</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.11 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4.22 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">  Shareholders' net income</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">    Basic</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.13 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4.26 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">    Diluted</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.12 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4.20 </td></tr></table><p><br /></p><ul><li>Sale of the Chilean Insurance Operations <br /></li></ul><p><br />On August 10, 2007, the Company completed the sale of its Chilean insurance operations, which was classified as a discontinued operation in the second quarter of 2007. The Company recognized an impairment loss in the second quarter of 2007 for this business of $19 million after-tax primarily relating to the write-off of unrecoverable tax assets and foreign currency translation losses. <br /><br /></p><ul><li>Sale of Retirement Benefits Business <br /></li></ul><p><br />In 2004, the Company sold its retirement benefits business, excluding the corporate life insurance business, for cash proceeds of $2.1 billion. The sale resulted in an initial after-tax gain of $809 million, of which $267 million after-tax was recognized immediately and the remaining amount was deferred. The Company recognized deferred gains of $4 million after-tax in 2009 and 2008, as well as $5 million after-tax in 2007. As of December 31, 2009, the remaining deferred gain of $29 million after-tax will be recognized in the Company’s results of operations through 2032.<br /><br /></p><ul><li>Sale of Individual Life Insurance and Annuity Business<br /></li></ul><p><br />In 1998, the Company sold its individual life insurance and annuity business for cash proceeds of $1.4 billion. The sale generated an after-tax gain of approximately $800 million, the majority of which was deferred and is recognized at the rate that earnings from the sold business would have been expected to emerge (primarily over 15 years on a declining basis). The Company recognized deferred gains of $18 million after-tax in 2009, $21 million after-tax in 2008 and $25 million after-tax in 2007. The remaining deferred gain of $90 million after-tax will be recognized in the Company’s results of operations through 2027.<br /><br /></p></div>
<div style="font-size:12pt"><p>Note 4 — Earnings Per Share<br /><br />Basic and diluted earnings per share were computed as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="42"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Effect of </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td></tr><tr><td width="447" align="left" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><i>(In millions, except per share amounts)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Basic</b></td><td width="95" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Dilution</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Diluted</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="42"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">Shareholders' income from continuing operations</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,301 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,301 </b></td></tr><tr><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="42">Shares</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"><i>(in thousands):</i></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td width="447" align="left" colspan="2" style="background-color: #FFFFFF;" height="17">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 274,058 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 274,058 </b></td></tr><tr><td width="447" align="left" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Options </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,299 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,299 </b></td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">Total shares</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 274,058 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"><b> </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,299 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 275,357 </b></td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">EPS</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4.75 </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"><b>$</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (0.02)</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4.73 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="42">2008 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">Shareholders' income from continuing operations</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 288 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 288 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="42">Shares</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"><i>(in thousands):</i></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="447" align="left" colspan="2" style="background-color: #FFFFFF;" height="17">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 277,317 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 277,317 </td></tr><tr><td width="447" align="left" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Options </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,526 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,526 </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="16">Total shares</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 277,317 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,526 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 278,843 </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">EPS</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.04 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (0.01)</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.03 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="42">2007 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Shareholders' income from continuing operations</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,120 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,120 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="42">Shares</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="405"><i>(in thousands):</i></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="447" align="left" colspan="2" style="background-color: #FFFFFF;" height="18">Weighted average</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 286,357 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 286,357 </td></tr><tr><td width="447" align="left" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Options </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,776 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,776 </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Total shares</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 286,357 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,776 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 290,133 </td></tr><tr><td width="447" align="left" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18">EPS</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3.91 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (0.05)</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3.86 </td></tr></table><p>As described in Note 2, effective in 2009, the Company adopted the FASB’s new guidance for determining participating securities 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 years’ share information has been restated as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="298"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="87"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="84"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="97"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="79"> </td></tr><tr><td height="15" style="border-top: 1px solid #000000;" align="left" width="298"> </td><td width="423" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">2008 </td></tr><tr><td height="15" width="298" align="left"> </td><td width="209" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">Basic</td><td width="214" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">Diluted</td></tr><tr><td height="30" style="border-bottom: 1px solid #000000;" align="left" width="298"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="87">As originally reported</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="84">As adjusted</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="97">As originally reported</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="79">As adjusted</td></tr><tr><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="298">Shareholders' income from continuing operations</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="87">1.05 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="84">1.04 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="97">1.04 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="79">1.03 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;" align="left" width="298"> </td><td width="423" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">2007 </td></tr><tr><td height="15" width="298" align="left"> </td><td width="209" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">Basic</td><td width="214" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="15">Diluted</td></tr><tr><td height="30" style="border-bottom: 1px solid #000000;" align="left" width="298"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="87">As originally reported</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="84">As adjusted</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="97">As originally reported</td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"> </td><td height="30" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="79">As adjusted</td></tr><tr><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="298">Shareholders' income from continuing operations</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="87">3.95 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="84">3.91 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="97">3.88 </td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="79">3.86 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;" align="left" width="298"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="87"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="84"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="97"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;" align="left" width="79"> </td></tr></table><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><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="496"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2008 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="496">Antidilutive options</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>8.8 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">6.3 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">1.2 </td></tr></table></div>
<div style="font-size:12pt"><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><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Incurred but not yet reported</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 790 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 782 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Reported claims in process</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 114 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 114 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Other medical expense payable</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 17 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 28 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Medical claims payable</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 921 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 924 </td></tr></table><p>Activity in medical claims payable was as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="446">Balance at January 1,</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 924 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 975 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 960 </td></tr><tr><td height="17" width="446" align="left">Less: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 211 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 258 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 250 </td></tr><tr><td height="17" width="446" align="left">Balance at January 1, net</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 713 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 717 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 710 </td></tr><tr><td height="3" width="446" align="left"> </td><td height="3" width="19" align="right"><b> </b></td><td height="3" width="75" align="right"><b> </b></td><td height="3" width="19" align="right"> </td><td height="3" width="75" align="right"> </td><td height="3" width="19" align="right"> </td><td height="3" width="75" align="right"> </td></tr><tr><td height="17" width="446" align="left">Acquired April 1, net</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="75" align="right"><b> - </b></td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 90 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> - </td></tr><tr><td height="5" width="446" align="left"> </td><td height="5" width="19" align="right"><b> </b></td><td height="5" width="75" align="right"><b> </b></td><td height="5" width="19" align="right"> </td><td height="5" width="75" align="right"> </td><td height="5" width="19" align="right"> </td><td height="5" width="75" align="right"> </td></tr><tr><td height="16" width="446" align="left">Incurred claims related to:</td><td height="16" width="19" align="right"><b> </b></td><td height="16" width="75" align="right"><b> </b></td><td height="16" width="19" align="right"> </td><td height="16" width="75" align="right"> </td><td height="16" width="19" align="right"> </td><td height="16" width="75" align="right"> </td></tr><tr><td height="17" width="446" align="left">   Current year</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="75" align="right"><b> 6,970 </b></td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 7,312 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 6,878 </td></tr><tr><td height="17" width="446" align="left">   Prior years</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> (43)</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (60)</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (80)</td></tr><tr><td height="17" width="446" align="left">   Total incurred</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 6,927 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 7,252 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 6,798 </td></tr><tr><td height="17" width="446" align="left">Paid claims related to:</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="75" align="right"><b> </b></td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> </td></tr><tr><td height="17" width="446" align="left">   Current year</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="75" align="right"><b> 6,278 </b></td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 6,716 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 6,197 </td></tr><tr><td height="17" width="446" align="left">   Prior years</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 647 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 630 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 594 </td></tr><tr><td height="17" width="446" align="left">   Total paid</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 6,925 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 7,346 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 6,791 </td></tr><tr><td height="17" width="446" align="left">Balance at December 31, net</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="75" align="right"><b> 715 </b></td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 713 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 717 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="446">Add: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 206 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 211 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 258 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="446">Balance at December 31, </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 921 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 924 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 975 </td></tr></table><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 8 for additional information on reinsurance. For the year ended December 31, 2009, actual experience differed from the Company’s key assumptions resulting in favorable incurred claims related to prior years’ medical claims payable of $43 million, or 0.6% 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 $21 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. Actual medical cost trend resulted in a reduction in medical claims payable of $22 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 impacts in 2009 and 2008 relating to completion factors and medical cost trend variances are 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 years ended December 31, 2009 and December 31, 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 determined 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.</p></div>
<div style="font-size:12pt"><p>Note 6 — Initiatives to Lower Operating Expenses <br /><br />As part of its strategy, the Company has undertaken several initiatives to realign its organization and consolidate support functions in an effort to increase efficiency and responsiveness to customers and to reduce costs. <br /><br />During 2008 and 2009, the Company conducted a comprehensive review to reduce the operating expenses of its ongoing businesses (“cost reduction program”). As a result, the Company recognized severance-related and real estate charges in other operating expenses.<br /><br />Severance charges in 2008 and 2009 resulted from reductions of approximately 2,350 positions in the Company’s workforce.<br /><br />Cost reduction activity for 2008 and 2009 was as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="425">Pre-tax (In millions)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Severance</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Real Estate</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Total</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="425">Fourth Quarter 2008 charge (balance carried to January 1, 2009)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 44 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 11 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"> 55 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td></tr><tr><td height="17" width="425" align="left">Second Quarter</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 14 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 14 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td></tr><tr><td height="17" width="425" align="left">Third Quarter</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 10 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 10 </td><td height="17" width="19" align="left"> </td></tr><tr><td height="17" width="425" align="left">Fourth Quarter </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 20 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 20 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td></tr><tr><td height="17" width="425" align="left">   Subtotal - 2009 charges</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 44 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 44 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="425">Less: Payments </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 55 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 3 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 58 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="425">Balance, December 31, 2009</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 33 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 8 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 41 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19"> </td></tr></table><p>The Health Care segment recorded $37 million pre-tax ($24 million after-tax) of the 2009 charges and $44 million pre-tax ($27 million after-tax) of the 2008 charge. The remainder of the 2009 and 2008 charges were reported as follows: Disability and Life: $5 million pre-tax ($4 million after-tax) in 2009 and $3 million pre-tax ($2 million after-tax) in 2008; and International: $2 million pre-tax ($1 million after-tax) in 2009 and $8 million pre-tax ($6 million after-tax) in 2008. Substantially all severance is expected to be paid by the end of 2010.<br /></p></div>
<div style="font-size:12pt"><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 a guaranteed minimum death benefit (“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 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 to reduce and is effective in reducing 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. <br /><br />In 2000, the Company determined that the GMDB reinsurance business was premium deficient because the recorded future policy benefit reserve was less than the expected present value of future claims and expenses less the expected present value of future premiums and investment income using revised assumptions based on actual and expected experience. As a result, the Company increased its reserves. Since that time, the Company has tested for premium deficiency by performing 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 $1.3 billion as of December 31, 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 for underlying equity mutual funds refers to market rates expected to be earned on the hedging instruments over the life of the GMDB equity hedge program, and for underlying fixed income mutual funds refers to the expected market return over the life of the contracts. 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 December 31, 2009:<br /><br /></p><ul><li>The reserves represent 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 /></li><li>The reserves include an estimate for partial surrenders that essentially lock in the death benefit for a particular policy based on annual election rates that vary from 0-22% depending on the net amount at risk for each policy and whether surrender charges apply.<br /></li><li>The assumed mean investment performance for the underlying equity mutual funds considers the Company’s GMDB equity hedge program using futures contracts, and is based on the Company’s view that short-term interest rates will average 5% over future periods, but considers that current short-term rates are less than 5%.  The mean investment performance assumption for the underlying fixed income mutual funds (bonds and money market) is 5% based on a review of historical returns. The investment performance for underlying equity and fixed income mutual funds 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 /></li><li>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 /></li><li>The discount rate is 5.75%.<br /></li><li>The mortality assumption is 70-75% of the 1994 Group Annuity Mortality table, with 1% annual improvement beginning January 1, 2000.<br /></li><li>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 /></li></ul><p><br />Although first quarter 2009 results included reserve strengthening of $73 million pre-tax ($47 million after-tax), no additional reserve strengthening was required since then, primarily due to the stabilization and recovery of equity markets. The components of the first quarter reserve strengthening were:<br /><br /></p><ul><li>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 /></li><li>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 /></li><li>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 /></li></ul><p><br />During 2008, the Company recorded additional benefits expenses of $412 million pre-tax ($267 million after-tax) primarily to strengthen GMDB reserves following an analysis of experience and reserve assumptions. The amounts were primarily due to:<br /><br /></p><ul><li>adverse impacts of overall market declines of $210 million pre-tax ($136 million after-tax). This is comprised of (a) $185 million ($120 million after-tax) related to the provision for partial surrenders, including $40 million ($26 million after-tax) for an increase in the assumed election rates for future partial surrenders and (b) $25 million ($16 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 /></li><li>adverse volatility-related impacts due to turbulent equity market conditions. Volatility risk is not covered by the GMDB equity hedge program. Also, the equity market volatility, particularly during the second half of the year impacted the effectiveness of the hedge program. In aggregate, these volatility-related impacts totaled $182 million of the pre-tax charge ($118 million after-tax). The GMDB equity hedge program is designed so that changes in the value of a portfolio of actively managed futures contracts will offset changes in the liability resulting from equity market movements. In periods of equity market declines, the liability will increase; the hedge program is designed to produce gains on the futures contracts to offset the increase in the liability. However, the hedge program will not perfectly offset the change in the liability, in part because the market does not offer futures contracts that exactly match the diverse mix of equity fund investments held by contractholders, and because there is a time lag between changes in underlying contractholder mutual funds, and corresponding changes in the hedge position. In 2008, the impact of this mismatch was higher than most prior periods due to the relatively large changes in market indices from day to day. In addition, the number of futures contracts used in the hedge program is adjusted only when certain tolerances are exceeded and in periods of highly volatile equity markets when actual volatility exceeds the expected volatility assumed in the liability calculation, losses will result. These conditions have had an adverse impact on earnings, and during 2008, the increase in the liability due to equity market movements was only partially offset by the results of the futures contracts; and<br /></li><li>adverse interest rate impacts. 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 generating $14 million of the pre-tax charge ($9 million after-tax). <br /></li></ul><p><br />Activity in future policy benefit reserves for these GMDB contracts was as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Balance at January 1, </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,609 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 848 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 862 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Add: Unpaid Claims</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 22 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Less: Reinsurance and other amounts recoverable</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 83 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 22 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="446">Balance at January 1, net</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,560 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 850 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 862 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Add: Incurred benefits</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (122)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 822 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 62 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Less: Paid benefits</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 170 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 112 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 74 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Ending balance, net</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,268 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,560 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 850 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Less: Unpaid Claims</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 36 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 34 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Add: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 53 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 83 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Balance at December 31,</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,285 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,609 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 848 </td></tr></table><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.<br /><br />The majority of the Company’s exposure arises under annuities that guarantee that the benefit received at death will be no less than the highest historical account value of the related mutual fund investments on a contractholder’s anniversary date. Under this type of death benefit, the Company is liable to the extent the highest historical anniversary account value exceeds the fair value of the related mutual fund investments at the time of a contractholder’s death. Other annuity designs that the Company reinsured guarantee that the benefit received at death will be:<br /><br /></p><ul><li>the contractholder’s account value as of the last anniversary date (anniversary reset); or<br /></li><li>no less than net deposits paid into the contract accumulated at a specified rate or net deposits paid into the contract.<br /></li></ul><p><br />The table below presents the account value, net amount at risk and average attained age of underlying contractholders for guarantees in the event of death, by type of benefit as of December 31. The net amount at risk is the death benefit coverage in force or the amount that the Company would have to pay if all contractholders died as of the specified date, and represents the excess of the guaranteed benefit amount over the fair value of the underlying mutual fund investments.</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(Dollars in millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Highest anniversary annuity value</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Account value</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 13,890 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13,154 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Net amount at risk</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 5,953 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 9,489 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="530">   Average attained age of contractholders (weighted by exposure)</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 69 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 68 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Anniversary value reset</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Account value</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,403 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,322 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Net amount at risk</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 113 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 336 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Average attained age of contractholders (weighted by exposure)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 61 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 59 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Other</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Account value</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,918 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,846 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Net amount at risk</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 914 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,280 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Average attained age of contractholders (weighted by exposure)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 68 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 67 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Total</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="530">   Account value</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 17,211 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 16,322 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">   Net amount at risk</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 6,980 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 11,105 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="530">   Average attained age of contractholders (weighted by exposure)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 69 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 68 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">   Number of contractholders (approx.)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 590,000 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 650,000 </td></tr></table><p>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 December 31, 2009 was $1.0 billion.  The Company recorded in other revenues pre-tax losses of $282 million in 2009, compared with pre-tax gains of $333 million in 2008 and pre-tax losses of $32 million in 2007 from these futures contracts.<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. All reinsured GMIB policies also have a GMDB benefit reinsured by the Company. See Note 11 for further information.</p></div>
<div style="font-size:12pt"><p>Note 8 ― 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 $1.7 billion as of December 31, 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 held in a trust established for the benefit of the Company. As of December 31, 2009, the fair value of trust assets exceeded the reinsurance recoverable and S&P had assigned this reinsurer a rating of AA-. <br /><br />Individual life and annuity reinsurance. The Company had reinsurance recoverables totaling $4.4 billion as of December 31, 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.  A substantial portion of the reinsurance recoverables are secured by investments held in a trust established for the benefit of the Company. At December 31, 2009, the trust assets secured approximately 90% of the reinsurance recoverables. The remaining balance is currently unsecured. If Lincoln National Life Insurance Company and Lincoln Life & Annuity of New York do not maintain a specified minimum credit or claims paying rating, these reinsurers are required to fully secure the outstanding balance. S&P has assigned each of these companies a rating of AA-.<br /><br />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 $294 million as of December 31, 2009 are expected to be collected from more than 90 reinsurers which have been assigned the following financial strength ratings by S&P:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="404"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="145"><b>Percent of Reinsurance</b></td></tr><tr><td height="17" width="404" align="left"><b> </b></td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="center"><b>Reinsurance</b></td><td height="17" width="75" align="center"><b>Percent</b></td><td height="17" width="145" align="center"><b>Recoverable Protected</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="404"><b>Ongoing operations (In millions)</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>Recoverable</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>of Total</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="145"><b>by Collateral</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="404"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="145"> </td></tr><tr><td height="17" width="404" align="left">AA- (Single reinsurer)</td><td height="17" width="19" align="left">$</td><td height="17" width="75" align="right"> 47 </td><td height="17" width="75" align="center">16% </td><td height="17" width="145" align="center">0% </td></tr><tr><td height="17" width="404" align="left">AA- or higher (Other reinsurers)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 33 </td><td height="17" width="75" align="center">11% </td><td height="17" width="145" align="center">0% </td></tr><tr><td height="17" width="404" align="left">A (Single reinsurer)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 29 </td><td height="17" width="75" align="center">10% </td><td height="17" width="145" align="center">0% </td></tr><tr><td height="17" width="404" align="left">A+ to A- (Other reinsurers)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 111 </td><td height="17" width="75" align="center">38% </td><td height="17" width="145" align="center">4% </td></tr><tr><td height="17" width="404" align="left">Unrated (Single reinsurer)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 35 </td><td height="17" width="75" align="center">12% </td><td height="17" width="145" align="center">99% </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="404">Below A- or unrated (Other reinsurers)</td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 39 </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">13% </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="145">37% </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="404">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 294 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="75">100% </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="145">18% </td></tr></table><p>The collateral protecting the recoverables includes assets held in trust and letters of credit. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables in the event that recovery is not considered probable. As of December 31, 2009, the Company’s recoverables related to these segments were net of a reserve of $9 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 11 and 23 for additional discussion of the GMIB assets and liabilities).<br /><br />The reinsurance recoverables for GMDB, workers’ compensation, and personal accident of $121 million as of December 31, 2009 are expected to be collected from approximately 80 retrocessionaires which have been assigned the following financial strength ratings from S&P:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="404"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="145"><b>Percent of Reinsurance</b></td></tr><tr><td height="17" width="404" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="center"><b>Reinsurance</b></td><td height="17" width="75" align="center"><b>Percent</b></td><td height="17" width="145" align="center"><b>Recoverable Protected</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="404"><b>Run-off Reinsurance segment (In millions)</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>Recoverable</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75"><b>of Total</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="145"><b>by Collateral</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="404"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="145"> </td></tr><tr><td height="17" width="404" align="left">AA- or higher </td><td height="17" width="19" align="left">$</td><td height="17" width="75" align="right"> 32 </td><td height="17" width="75" align="center">26% </td><td height="17" width="145" align="center">11% </td></tr><tr><td height="17" width="404" align="left">A (Single reinsurer)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 36 </td><td height="17" width="75" align="center">30% </td><td height="17" width="145" align="center">100% </td></tr><tr><td height="17" width="404" align="left">A- (Single reinsurer)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 17 </td><td height="17" width="75" align="center">14% </td><td height="17" width="145" align="center">50% </td></tr><tr><td height="17" width="404" align="left">A+ to A- (Other reinsurers)</td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 16 </td><td height="17" width="75" align="center">13% </td><td height="17" width="145" align="center">5% </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="404">Below A- or unrated </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 20 </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">17% </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="145">31% </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="404"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 121 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="75">100% </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="145">45% </td></tr></table><p>The collateral protecting the recoverables includes letters of credit and assets held in trust. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables in the event that recovery is not considered probable. As of December 31, 2009, the Company’s recoverables related to this segment were net of a reserve of $6 million.<br /><br />The Company's payment obligations for underlying reinsurance exposures assumed by the Company under these contracts are based on the ceding companies’ claim payments. For GMDB, claim payments vary because of changes in equity markets and interest rates, as well as mortality and contractholder 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 December 31, 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 />In the Company’s Consolidated Income Statements, Premiums and fees were presented net of ceded premiums, and Total benefits and expenses were presented net of reinsurance recoveries, in the following amounts:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421"><b>Premiums and Fees</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">Short-duration contracts:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">   Direct</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 13,886 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13,969 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13,585 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">   Assumed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,076 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,221 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 329 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">   Ceded</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (192)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (242)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (178)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 14,770 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 14,948 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,736 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">Long-duration contracts:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">   Direct</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,499 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,521 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,485 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">   Assumed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 33 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 53 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 70 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">Ceded:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">   Individual life insurance and annuity business sold</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (209)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (220)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (230)</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">   Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (52)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (49)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (53)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,271 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,305 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,272 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16,041 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 16,253 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 15,008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421"><b>Reinsurance recoveries</b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="421">Individual life insurance and annuity business sold</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 322 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 368 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 323 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 178 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 282 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 106 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="421">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 500 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 650 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 429 </td></tr></table><p><br />The increase in assumed premiums in 2008 primarily reflects the effect of the reinsurance assumed in connection with the acquisition of Great-West Healthcare in 2008. The effects of reinsurance on written premiums and fees for short-duration contracts were not materially different from the recognized premium and fee amounts shown in the above table.</p></div>
<div style="font-size:12pt"><p>Note 9 ― Goodwill, Other Intangibles, and Property and Equipment<br /><br />Substantially all goodwill relates to the Health Care segment and increased by approximately $1.1 billion during 2008 as a result of the acquisition of Great-West Healthcare. <br /></p><p>Other intangible assets were comprised of the following at December 31:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="327"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="87"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="87">Weighted Average</td></tr><tr><td height="17" width="327" align="left"> </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="left"> </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="center">Accumulated</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="center">Net Carrying</td><td height="17" width="87" align="center">Amortization</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327"><i>(Dollars in millions)</i></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Cost</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Amortization</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Value</td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="87">Period (Years)</td></tr><tr><td height="3" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="87"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="327"><b>2009 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="87"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Customer relationships </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 386 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 254 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 132 </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="87"><b>9 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 46 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 12 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 34 </b></td><td height="17" width="87" align="center"><b>10 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Total reported in other assets, including other intangibles</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 432 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 266 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 166 </b></td><td height="17" width="87" align="center"><b> </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Internal-use software reported in property and equipment </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 1,168 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 692 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 476 </b></td><td height="17" width="87" align="center"><b>4 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="327">Total other intangible assets </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 1,600 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 958 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 642 </b></td><td height="18" width="87" align="center"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="17" width="87" align="center"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="327">2008 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="87"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Customer relationships </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 381 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 230 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 151 </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="87">9 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 43 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 6 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 37 </td><td height="17" width="87" align="center">10 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Total reported in other assets, including other intangibles</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 424 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 236 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 188 </td><td height="17" width="87" align="center"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Internal-use software reported in property and equipment </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 998 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 545 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 453 </td><td height="17" width="87" align="center">4 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="327">Total other intangible assets </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1,422 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 781 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 641 </td><td height="18" width="87" align="center"> </td></tr></table><p>Property and equipment was comprised of the following as of December 31:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="327"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="75">Accumulated</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="75">Net Carrying</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327"><i>(Dollars in millions)</i></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Cost</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Amortization</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="75">Value</td></tr><tr><td height="3" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="327"><b>2009 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Internal-use software</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 1,168 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 692 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 476 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other property and equipment</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 1,194 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 808 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 386 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="327">Total property and equipment</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 2,362 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 1,500 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 862 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="327">2008 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Internal-use software</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 998 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 545 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 453 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other property and equipment</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 1,252 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 901 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 351 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="327">Total property and equipment</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 2,250 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1,446 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 804 </td></tr></table><p>Depreciation and amortization was comprised of the following for the years ended December 31:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="3" style="border-top: 1px solid #000000;" align="left" width="327"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td><td height="3" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="3" style="border-top: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327"><i>(Dollars in millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Internal-use software </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 147 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 143 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 111 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other property and equipment</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 91 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 76 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 74 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="327">Depreciation and amortization of property and equipment</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 238 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 219 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 185 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="327">Other intangibles</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 30 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 25 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 9 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="327">Total depreciation and amortization</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"><b> 268 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 244 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 194 </td></tr></table><p>The Company estimates annual pre-tax amortization for intangible assets, including internal-use software, over the next five calendar years to be as follows: $145 million in 2010, $125 million in 2011, $100 million in 2012, $66 million in 2013, and $49 million in 2014.</p></div>
<div style="font-size:12pt"><p>Note 10 — Pension and Other Postretirement Benefit Plans<br /><br /></p><ul><li>Pension and Other Postretirement Benefit Plans<br /></li></ul><p><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. On May 8, 2009, the Company announced a freeze of its primary domestic defined benefit pension plans effective July 1, 2009. A curtailment of benefits occurred as a result of this action since it eliminated the accrual of benefits effective July 1, 2009 for active employees enrolled in these domestic pension plans. Accordingly, the Company recognized a pre-tax curtailment gain of $46 million ($30 million after-tax) during the second quarter of 2009, which was the remaining unamortized negative prior service cost at May 31, 2009. <br /><br />The Company measures the assets and liabilities of its domestic pension and other postretirement benefit plans as of December 31. The following table summarizes the projected benefit obligations and assets related to the Company’s domestic and international pension and other postretirement benefit plans as of, and for the year ended, December 31:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><i> </i></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><i> </i></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Pension </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Other Postretirement</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Benefits</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Benefits</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><b>Change in benefit obligation</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Benefit obligation, January 1</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,101 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4,045 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 376 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 426 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Service cost</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 43 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 74 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Interest cost</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 250 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 242 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 24 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">(Gain) loss from past experience</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 255 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 59 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (20)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Benefits paid from plan assets</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (247)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (246)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (4)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Benefits paid - other</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (30)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (24)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (37)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (36)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Translation of foreign currencies</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Amendments</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 5 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (16)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Curtailment</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (15)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348">Benefit obligation, December 31</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4,363 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4,101 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 419 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 376 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><b>Change in plan assets</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Fair value of plan assets, January 1</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,248 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 3,417 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 24 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 28 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Actual return on plan assets</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 436 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (921)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (1)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Benefits paid</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (247)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (246)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (2)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Translation of foreign currencies</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (4)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348">Contributions</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 412 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348">Fair value of plan assets, December 31</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,850 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,248 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 24 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 24 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="348">Funded Status</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (1,513)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,853)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (395)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (352)</td></tr></table><p>The postretirement benefits liability adjustment included in accumulated other comprehensive loss consisted of the following as of December 31:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><i> </i></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Pension </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Other </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="348"> </td><td width="188" align="center" colspan="4" style="background-color: #FFFFFF;" height="17"><b>Benefits</b></td><td width="188" align="center" colspan="4" style="background-color: #FFFFFF;" height="17"><b>Postretirement Benefits</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348">Unrecognized net gain (loss)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (1,558)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,548)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 22 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 84 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348">Unrecognized prior service cost</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (5)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 50 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 69 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 88 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="348">Postretirement benefits liability adjustment</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (1,563)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,498)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 91 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 172 </td></tr></table><p>During 2009, the Company’s postretirement benefits liability adjustment increased by $146 million pre-tax ($97 million after-tax) resulting in a decrease to shareholders’ equity. The increase in the liability was primarily due to:<br /><br /></p><ul><li>decreases in discount rates for both the pension and other postretirement benefit plans;<br /></li><li>actuarial losses primarily relating to census changes and updated medical trend assumptions resulting from the 2009 plan valuations; and<br /></li><li>the effect of the 2009 curtailment.<br /></li></ul><p><br />Those impacts were partially offset by actual returns on pension plan assets being more favorable than expected in 2009, as both equity and fixed income markets improved considerably in 2009.<br /><br />Pension benefits. The Company’s pension plans were underfunded by $1.5 billion in 2009 and $1.9 billion in 2008 and had related accumulated benefit obligations of $4.3 billion as of December 31, 2009 and $4.1 billion as of December 31, 2008.<br /><br />The Company funds its qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006. For 2010, the Company expects minimum required contributions to be approximately $70 million. This amount could change based on final valuation amounts. In addition, the Company currently plans to make voluntary contributions of approximately $140 million during 2010. Based on its current funded status, the Company does not believe that the litigation matter discussed in Note 23 to the Consolidated Financial Statements would have an impact on 2010 funding requirements even if resolved in 2010. Future years’ contributions will ultimately be based on a wide range of factors including but not limited to asset returns, discount rates, and funding targets. <br /><br />Components of net pension cost for the years ended December 31 were as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Service cost</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 43 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 74 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 73 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Interest cost</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 250 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 242 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 231 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Expected long-term return on plan assets</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (239)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (234)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (209)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Amortization of:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">   Net loss from past experience</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 57 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 119 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">   Prior service cost</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (4)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (11)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (1)</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Curtailment</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (46)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Net pension cost</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 38 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 128 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 213 </td></tr></table><p>The Company expects to recognize pre-tax losses of $24 million in 2010 from amortization of past experience. This estimate is based on a weighted average amortization period for the frozen and inactive plans of approximately 30 years, as this period is now based on the average expected remaining life of plan participants. As a result of the plan freeze, the workforce is considered inactive for pension accounting purposes because employees will no longer earn pension benefits. <br /><br />Other postretirement benefits. Unfunded retiree health benefit plans had accumulated benefit obligations of $268 million at December 31, 2009, and $235 million at December 31, 2008. Retiree life insurance plans had accumulated benefit obligations of $150 million as of December 31, 2009 and $141 million as of December 31, 2008. <br /><br />Components of net other postretirement benefit cost for the years ended December 31 were as follows:        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Service cost</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Interest cost</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 24 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Expected long-term return on plan assets</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (1)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (1)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (1)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Amortization of:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">   Net gain from past experience</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (5)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (8)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (6)</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">   Prior service cost</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (18)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (17)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (17)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Net other postretirement benefit cost</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td></tr></table><p>The Company expects to recognize in 2010 pre-tax gains of $19 million related to amortization of prior service cost and pre-tax gains of $1 million from amortization of past experience. The original amortization period is based on an average remaining service period of active employees associated with the other postretirement benefit plans of approximately 9 years. The remaining amortization period for prior service cost is approximately 4 years. <br /><br />The estimated rate of future increases in the per capita cost of health care benefits is 9% in 2010, decreasing by 0.5% per year to 5% in 2017 and beyond. This estimate reflects the Company’s current claim experience and management’s estimate that rates of growth will decline in the future. A 1% increase or decrease in the estimated rate would change 2009 reported amounts as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Increase</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Decrease</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Effect on total service and interest cost</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Effect on postretirement benefit obligation</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11 </td></tr></table><p>Plan assets. The target investment allocation percentages (58% equity securities, 20% fixed income, 7% real estate and 15% other) are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions. The pension plan asset portfolio has been most heavily weighted towards equity securities, consisting of domestic and international investments, in an effort to synchronize the expected higher rate of return on equities over the long-term with the overall long-term nature of the pension benefit obligations. The diversification of the pension plan assets into other investments is intended to mitigate the volatility in returns, while also providing adequate liquidity to fund benefit distributions.<br /><br />As of December 31, 2009, pension plan assets included $2.6 billion invested in the separate accounts of Connecticut General Life Insurance Company (“CGLIC”) and Life Insurance Company of North America, which are subsidiaries of the Company, as well as an additional $0.3 billion invested directly in funds offered by the buyer of the retirement benefits business. <br /><br />The fair values of plan assets by category and by hierarchy as defined by GAAP are as follows. See Note 11 for a definition of the levels within the fair value hierarchy.        <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334"><b>December 31, 2009</b><sup></sup></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>(In millions)</i><sup></sup></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>Plan assets at fair value:</i><sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Fixed maturities:<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal government and agency<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 6 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 6 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Foreign government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 26 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 26 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Corporate<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 88 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 26 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 114 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Mortgage and other asset-backed<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 22 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 22 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Fund investments and pooled separate accounts (1)<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 300 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 118 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 418 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Total fixed maturities<sup></sup></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 442 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 144 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 586 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Equity securities:<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">  Domestic<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,341 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 23 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,365 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">  International, including funds and pooled separate accounts (1)<sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 171 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 195 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 366 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Total equity securities<sup></sup></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,512 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 196 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 23 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,731 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Real estate, including pooled separate accounts (1)<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 160 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 160 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Securities partnerships<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 257 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 257 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Guaranteed deposit account contract<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 29 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 29 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Cash equivalents <sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 87 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 87 </b></td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Total plan assets at fair value<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,512 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 725 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 613 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,850 </b></td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"> <sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="737" align="left" colspan="10" style="background-color: #FFFFFF;" height="15"><i>(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments.</i></td></tr></table><p>Plan assets in Level 1 include exchange-listed equity securities. Level 2 assets primarily include:<br /><br /></p><ul><li>fixed income and international equity funds priced using their daily net asset value which is the exit price; and<br /></li><li>fixed maturities valued using recent trades of similar securities or pricing models as described below.<br /></li></ul><p><br />Because many fixed maturities 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 />Plan assets classified in Level 3 include securities partnerships and equity real estate generally valued based on the pension plan’s ownership share of the equity of the investee including changes in the fair values of its underlying investments. In addition, investments in pooled separate accounts principally invested in equity real estate and fixed income funds that are priced using the net asset value are classified in Level 3 due to restrictions on withdrawal. <br /><br />The following table summarizes the changes in pension plan assets classified in Level 3 for the year ended December 31, 2009. Actual return on plan assets in this table may include changes in fair value that are attributable to both observable and unobservable inputs.<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227"> </td><td width="72" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"> </td><td width="67" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"> </td><td width="249" align="center" colspan="6" style="background-color: #FFFFFF;" height="17"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="227"> </td><td rowspan="2" height="60" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="72" colspan="2" align="center"><b>Fixed Maturities</b></td><td rowspan="2" height="60" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="67" colspan="2" align="center"><b>Equity Securities</b></td><td rowspan="2" height="60" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Real Estate</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="70"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="47"><b> </b></td></tr><tr><td height="43" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="227"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="43"><b>Securities Partnerships</b></td><td width="89" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="43"><b>Guaranteed Deposit Account Contract</b></td><td width="66" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="43"><b>Total</b></td></tr><tr><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="227"><i> </i></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="53"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="48"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="70"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="28" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="47"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">Balance at January 1, 2009</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> 31 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> 14 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 208 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 264 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> 32 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> 549 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">Actual return on plan assets:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> - </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">     Assets still held at reporting date</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="53"><b> 8 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="48"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (104)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (31)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="70"><b> 8 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="47"><b> (119)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">     Assets sold during the period</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> 5 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> 5 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">Total actual return on plan assets</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> 13 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (104)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (31)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> 8 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> (114)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="227">Purchases, sales, settlements</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> (75)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> 9 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 56 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 24 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> (11)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> 3 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="227">Transfers into Level 3</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> 175 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> 175 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="227">Balance at December 31, 2009</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="53"><b> 144 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="48"><b> 23 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 160 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 257 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="70"><b> 29 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="47"><b> 613 </b></td></tr></table><p>The assets related to other postretirement benefit plans are invested in deposit funds with interest credited based on fixed income investments in the general account of CGLIC. As there are significant unobservable inputs in determining the fair value of these assets, they are classified as Level 3. During 2009, these assets earned a return of $2 million, which was offset by a net withdrawal from the fund of $2 million.<br /><br />Assumptions for pension and other postretirement benefit plans. Management determined the present value of the projected benefit obligation and the accumulated other postretirement benefit obligation and related benefit costs based on the following weighted average assumptions as of and for the years ended December 31:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="544"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="544">Discount rate:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Pension benefit obligation</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>5.50% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">6.25% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Other postretirement benefit obligation</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>5.25% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">6.25% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Pension benefit cost</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>6.25% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">6.25% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Other postretirement benefit cost</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>6.25% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">6.25% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">Expected long-term return on plan assets:</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Pension benefit cost</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>8.00% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">8.00% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Other postretirement benefit cost</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>5.00% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">5.00% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">Expected rate of compensation increase:</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Projected pension benefit obligation</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>3.50% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">3.50% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Pension benefit cost</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>3.50% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">3.50% </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="544">   Other postretirement benefit obligation</td><td height="17" style="background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>3.00% </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">3.00% </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="544">   Other postretirement benefit cost</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b>3.00% </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75">3.00% </td></tr></table><p>Discount rates are set by applying actual annualized yields at various durations from the Citigroup Pension Liability curve, without adjustment, to the expected cash flows of the postretirement benefits liabilities. The Company believes that the Citigroup Pension Liability curve is the most representative curve to use because it is derived from a broad array of bonds in various industries throughout the domestic market for high quality bonds. Further, Citigroup monitors the bond portfolio to ensure that only high quality issues are included. Accordingly, the Company does not believe that any adjustment is required to the Citigroup curve. Expected long-term rates of return on plan assets were developed considering actual long-term historical returns, expected long-term market conditions, plan asset mix and management’s investment strategy. Actual and target investment allocations are very similar at December 31, 2009.<br /><br />To measure pension costs, the Company uses a market-related asset valuation for domestic pension plan assets invested in non-fixed income investments. The market-related value of pension assets recognizes the difference between actual and expected long-term returns in the portfolio over 5 years, a method that reduces the short-term impact of market fluctuations. At December 31, 2009, the market-related asset value was approximately $3.3 billion compared with a market value of approximately $2.9 billion.<br /><br />Benefit payments. The following benefit payments, including expected future services, are expected to be paid in:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="422"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="422"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Other Postretirement</b></td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="422"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="16"><b>Benefits</b></td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="422"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="16"><b>Pension </b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="16"><b> </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="16"><b>Net of Medicare</b></td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="422"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="16"><b>Benefits</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="16"><b>Gross</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="16"><b>Part D Subsidy</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="422">2010 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 502 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 44 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 40 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="right" width="422">2011 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 343 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 42 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 40 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="right" width="422">2012 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 332 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 42 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 40 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="right" width="422">2013 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 319 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 41 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 39 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="right" width="422">2014 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 321 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 40 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 38 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="422">2015-2019</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,526 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 176 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 169 </b></td></tr></table><p>B.        401(k) Plans<br /><br />The Company sponsors a 401(k) plan in which the Company matches a portion of employees’ pre-tax contributions. Another 401(k) plan with an employer match was frozen in 1999. Participants in the active plan may invest in a fund that invests in the Company’s common stock, several diversified stock funds, a bond fund and a fixed-income fund.<br /><br />The Company may elect to increase its matching contributions if the Company’s annual performance meets certain targets. A substantial amount of the Company’s matching contributions are invested in the Company common stock. The Company’s expense for these plans was $36 million for 2009, $34 million for 2008 and $35 million for 2007.</p></div>
<div style="font-size:12pt"><p>Note 11 ― 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 measured at fair value under certain conditions, 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 /></p><ul><li>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 /></li><li>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 /></li><li>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 /></li></ul><p><br />Financial Assets and Financial Liabilities Carried at Fair Value<br /><br />The following tables provide information as of December 31, 2009 and December 31, 2008 about the Company’s financial assets and liabilities carried at fair value. 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. In addition, Note 10 contains similar tables for the Company’s pension plan assets.<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><b>December 31, 2009</b><sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>(In millions)</i><sup></sup></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Financial assets at fair value:<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Fixed maturities:<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal government and agency <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 43 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 527 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 571 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  State and local government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,521 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,521 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Foreign government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,056 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 14 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,070 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Corporate <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 8,241 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 344 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 8,585 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal agency mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 114 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 7 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 121 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other asset-backed <sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 92 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 449 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 541 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Total fixed maturities<sup> (1)</sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 43 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,585 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 815 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,443 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Equity securities <sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 81 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 30 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 113 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">    Subtotal<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 45 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,666 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 845 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,556 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Short-term investments<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 493 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 493 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB assets<sup> (2)</sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 482 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 482 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative assets<sup> (3)</sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Total financial assets at fair value, excluding separate accounts<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 45 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,175 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,327 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 14,547 </b></td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Financial liabilities at fair value:<sup></sup></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB liabilities <sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 903 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 903 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative liabilities<sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 30 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 30 </b></td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Total financial liabilities at fair value<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 30 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 903 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 933 </b></td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"> <sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><i>(1) Fixed maturities includes $274 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $38 million of appreciation for securities classified in Level 3.</i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><i>(2) The 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 $15 million for the future cost of reinsurance.</i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><i>(3) Other derivative assets includes $12 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></td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">December 31, 2008<sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>(In millions)</i><sup></sup></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Financial assets at fair value:<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Fixed maturities:<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal government and agency <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 38 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 724 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 762 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  State and local government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,486 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,486 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Foreign government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 923 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 944 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Corporate <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6,526 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 330 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6,856 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal agency mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 37 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 37 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 121 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 125 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other asset-backed <sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 57 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 514 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 571 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Total fixed maturities<sup> (1)</sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 38 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10,874 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 869 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,781 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Equity securities <sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 84 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 20 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 112 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">    Subtotal<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10,958 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 889 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,893 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Short-term investments<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 236 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 236 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB assets<sup> (2)</sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 953 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 953 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative assets<sup> (3)</sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 45 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 45 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Total financial assets at fair value, excluding separate accounts<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,239 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,842 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,127 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Financial liabilities at fair value:<sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB liabilities <sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,757 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,757 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative liabilities<sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Total financial liabilities at fair value<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,757 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,793 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"> <sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><i>(1) Fixed maturities includes $514 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $111 million of appreciation for securities classified in Level 3.</i></td></tr><tr><td height="2" style="background-color: #FFFFFF;" align="left" width="334"><i> </i><sup><i></i></sup></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><i>(2) The 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></td></tr><tr><td height="2" style="background-color: #FFFFFF;" align="left" width="334"><i> </i><sup><i></i></sup></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="2" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="737" colspan="10" align="left"><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></td></tr></table><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 93% as of December 31, 2009 and 92% as of December 31, 2008 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 and asset-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 and asset-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 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 December 31, 2009.  The nature and use of these other derivatives are described further in Note 13.<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 6% as of December 31, 2009 and 7% as of December 31, 2008 of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category, including:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17"><b>December 31,</b></td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17">December 31,</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="95" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="95" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Mortgage and asset-backed securities</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="76"><b> 456 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="76"> 518 </td></tr><tr><td height="17" width="523" align="left">Primarily private corporate bonds</td><td height="17" width="19" align="right"><b> </b></td><td height="17" width="76" align="right"><b> 288 </b></td><td height="17" width="19" align="right"> </td><td height="17" width="76" align="right"> 270 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523">Subordinated loans and private equity investments</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="76"><b> 101 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="76"> 101 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="76"><b> 845 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="76"> 889 </td></tr></table><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, spreads and liquidity of assets with similar characteristics.  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><p>Guaranteed minimum income benefit contracts.  Because cash flows of the GMIB liabilities and assets are affected by equity markets and interest rates, 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 behavior (including mortality, lapse, and annuity election rates), and non-performance risk, as well as risk and profit charges. At adoption of the FASB’s new guidance for fair value measurements 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 an increase in the net GMIB liability as described in Note 2(B). As assumptions related to annuitant behavior 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 /></p><ul><li>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 /></li><li>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 /></li></ul><p><br />These GMIB assets and liabilities are estimated with a complex internal model 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 Company is also required to adjust for nonperformance risk to reflect the market’s perception of the risk that either the Company will not fulfill its GMIB liability (own credit) or the Company will not collect on its GMIB retrocessional coverage (reinsurer credit risk). The significant assumptions used to value the GMIB assets and liabilities as of December 31, 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 3.39% at December 31, 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 56% 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 17% to 33% for equity funds, 4% to 12% 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 annual lapse rate assumption reflects experience that differs by the company issuing the underlying variable annuity contracts, ranges from 2% to 17% and depends on the time since contract issue and the relative value of the guarantee.<br />        The annual annuity election rate assumption reflects experience that differs by the company issuing the underlying variable annuity contracts and depends on the annuitant’s age, the relative value of the guarantee and whether a contractholder has had a previous opportunity to elect the benefit.  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%. Actual data is still emerging for the Company as well as the industry and the estimates are based on this limited data.<br /></p><ul><li>The nonperformance risk adjustment is incorporated by adding an additional spread to the discount rate in the calculation of both (1) the GMIB liability to reflect a hypothetical market participant’s view of the risk of the Company not fulfilling its GMIB obligations, and (2) the GMIB asset to reflect a hypothetical market participant’s view of the reinsurers’ credit risk, after considering collateral. The estimated market-implied spread is company-specific for each party involved to the extent that company-specific market data is available and based on industry averages for similarly rated companies when company-specific data is not available. The spread is impacted by the credit default swap (“CDS”) spreads of the specific parent companies, adjusted to reflect subsidiaries’ credit ratings relative to their parent company. The additional spread over LIBOR incorporated into the discount rate was 10 to 110 basis points for the GMIB liability and 0 to 140 basis points for the GMIB reinsurance asset for that portion of the interest rate curve most relevant to these policies.<br /></li></ul><p>        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 />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 December 31, 2009, S&P has given a financial strength rating of AA to one reinsurer. The receivable from the second reinsurer is fully collateralized by assets held in a trust.</p><p>Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value<br /><br />The following tables summarize the changes in financial assets and financial liabilities classified in Level 3 for the years ended December 31, 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 this table may include changes in fair value that are attributable to both observable and unobservable inputs.</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"> </td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"><i>(In millions)</i></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349">Balance at 1/1/09</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 889 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 953 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (1,757)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (804)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Gains (losses) included in income:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">  Results of GMIB</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (365)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 669 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 304 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">  Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (18)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Total gains (losses) included in net income</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (18)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (365)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 669 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 304 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Gains included in other comprehensive income</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 59 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Losses required to adjust future policy benefits for settlement annuities (1)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (72)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Purchases, issuances, settlements</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (29)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (106)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 185 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 79 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Transfers into Level 3</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="349">Balance at 12/31/09</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 845 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 482 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (903)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (421)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Total gains (losses) included in net income attributable to </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349">  instruments held at the reporting date</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (20)</b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (365)</b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 669 </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> $ </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 304 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="725" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="349"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"> </td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="34" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"><i>(In millions)</i></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349">Balance at 1/1/08</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 732 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 173 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (313)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (140)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Gains (losses) included in income:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">  Effect of adoption of new fair value measurement guidance</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 244 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (446)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (202)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">  Results of GMIB, excluding adoption effect</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 604 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (1,092)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (488)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">  Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (21)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Total gains (losses) included in net income</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (21)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 848 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,538)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (690)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Losses included in other comprehensive income</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (17)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Gains required to adjust future policy benefits for settlement annuities (1)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 91 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Purchases, issuances, settlements</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (68)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 94 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 26 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Transfers into Level 3</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 103 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="349">Balance at 12/31/08</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 889 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 953 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,757)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (804)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="349">Total gains (losses) included in net income attributable to </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349">  instruments held at the reporting date</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (18)</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 848 </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,538)</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (690)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="349"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="725" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr></table><p>As noted in the table above, total gains and losses included in net income are reflected in the following captions in the Consolidated Statements of Income:<br /> <br /></p><ul><li>Realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities; and<br /></li><li>Guaranteed minimum income benefits expense for amounts related to GMIB assets and liabilities.<br /></li></ul><p><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 table 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 FASB’s guidance for fair value measurements, the Company’s GMIB assets and liabilities are expected to be volatile in future periods because the underlying capital markets 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 />For 2009, the net pre-tax gain for GMIB was $304 million, and was primarily due to the following factors: <br /><br /></p><ul><li>increases in interest rates ($248 million); <br /></li><li>increases in underlying account values in the period, driven by favorable equity market and bond fund returns, resulting in reduced exposures ($98 million); <br /></li><li>specific adjustments to nonperformance risk for the Company net of nonperformance risk of its reinsurers ($16 million); and<br /></li><li>updates to the risk and profit charge estimates ($30 million).<br /></li></ul><p><br />These favorable effects were partially offset by:<br /><br /></p><ul><li>higher than expected claim experience ($26 million);<br /></li><li>increases to the annuitization assumption, reflecting higher utilization experience ($21 million);<br /></li><li>updates to the lapse assumption ($14 million);<br /></li><li>updates to fund correlation assumptions ($4 million); and<br /></li><li>other amounts, including experience varying from assumptions, model and in-force updates ($23 million).<br /></li></ul><p><br />Excluding the net increase for the effect of adoption of FASB’s guidance for fair value measurement, the increase in the net GMIB liability for 2008 was primarily driven by the impact of declines in underlying account values in the period, driven by declines in equity markets and bond fund returns, resulting in increased exposures and decreases in interest rates since December 31, 2007.</p><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 excluded from the Company’s revenues and expenses.  As of December 31, 2009 and December 31, 2008 separate account assets were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="346"><b>December 31, 2009</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Guaranteed separate accounts (See Note 22)</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 275 </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,480 </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,755 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Non-guaranteed separate accounts (1)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,883 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 3,100 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 550 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 5,533 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Total separate account assets</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,158 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4,580 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 550 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 7,288 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="722" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Non-guaranteed separate accounts include $2.6 billion in assets supporting the Company's pension plan, including $517 million classified in Level 3.</i></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="346">December 31, 2008</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Guaranteed separate accounts (See Note 22)</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 233 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,557 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,790 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Non-guaranteed separate accounts (1)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,093 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,506 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 475 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4,074 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346">Total separate account assets</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,326 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4,063 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 475 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5,864 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="346"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="722" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Non-guaranteed separate accounts include $1.5 billion in assets supporting the Company's pension plan, including $435 million classified in Level 3.</i></td></tr></table><p>Separate account assets in Level 1 include exchange-listed equity securities.  Level 2 assets primarily include:<br /><br /></p><ul><li>equity securities and corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and<br /></li><li>actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value which is the exit price.<br /></li></ul><p><br />Separate account assets classified in Level 3 include investments primarily in securities partnerships and real estate generally valued based on the separate account’s ownership share of the equity of the investee including changes in the fair values of its underlying investments.<br /><br />The following tables summarize the change in separate account assets reported in Level 3 for the years ended December 31, 2009 and 2008.<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"><i>(In millions)</i></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Balance at 1/1/09</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 475 </b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="614">Policyholder losses (1)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> (86)</b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="614">Purchases, issuances, settlements</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 4 </b></td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Transfers into Level 3 </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 157 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Balance at 12/31/09</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 550 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614"><i>(1) Included in this amount are losses of $92 million attributable to instruments still held at the reporting date. </i></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="614"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"><i>(In millions)</i></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Balance at 1/1/08</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 403 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="614">Policyholder gains (1)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 11 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="614">Purchases, issuances, settlements</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 78 </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Transfers out of Level 3 </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (17)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614">Balance at 12/31/08</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 475 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="614"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="614"><i>(1) Included in this amount are losses of $4 million attributable to instruments still held at the reporting date. </i></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr></table><p>Assets and Liabilities Measured at Fair Value under Certain Conditions<br /><br />Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as commercial mortgage loans and investments in real estate entities when they become impaired. During 2009, impaired commercial mortgage loans with carrying values of $143 million were written down to their fair values of $126 million, resulting in pre-tax realized investment losses of $17 million. Also during 2009, impaired real estate entities with carrying values of $48 million were written down to their fair values of $12 million, resulting in pre-tax realized investment losses of $36 million. These fair value measurements were based on discounted cash flow analyses using significant unobservable inputs, and were classified in Level 3. For 2008, the amounts required to adjust these assets and liabilities to their fair values were not significant.<br />        </p><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 Company’s consolidated financial statements at amounts that approximate fair value. The following table provides 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 December 31, 2009 and December 31, 2008.<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="345"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>December 31, 2009</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">December 31, 2008</td></tr><tr><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="345"> </td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Fair Value</b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Carrying Value</b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75">Fair Value</td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75">Carrying Value</td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="345">Commercial mortgage loans </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 3,323 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"><b> 3,522 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,401 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,617 </td></tr><tr><td height="17" width="345" align="left">Contractholder deposit funds, excluding universal life products</td><td height="17" width="19" align="right"><b>$</b></td><td height="17" width="75" align="right"><b> 940 </b></td><td height="17" width="19" align="right"><b>$</b></td><td height="17" width="75" align="right"><b> 941 </b></td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 889 </td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 915 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="345">Long-term debt, excluding capital leases</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 2,418 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"><b> 2,427 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 1,684 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,077 </td></tr></table><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 determined using an internal discounted cash flow model.<br /><br />Contractholder deposit funds, excluding universal life products. Generally, these 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></div>
<div style="font-size:12pt"><p>Note 12 — Investments<br /><br /></p><ul><li>Fixed Maturities and Equity Securities<br /></li></ul><p><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 (losses). <br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="73"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449">Included in fixed maturities:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="73"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">  Trading securities (amortized cost: $8; $13)</td><td height="17" style="background-color: #FFFFFF;" align="left" width="73"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 8 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">  Hybrid securities (amortized cost: $37; $10)</td><td height="17" style="background-color: #FFFFFF;" align="left" width="73"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 43 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="449">      Total</td><td height="18" style="background-color: #FFFFFF;" align="left" width="73"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 51 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 23 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">Included in equity securities:</td><td height="17" style="background-color: #FFFFFF;" align="left" width="73"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449">  Hybrid securities (amortized cost: $109; $123)</td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="73"> </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 81 </b></td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 84 </td></tr></table><p>Fixed maturities and equity securities included $197 million at December 31, 2009 and $211 million at December 31, 2008, which were pledged as collateral to brokers as required under certain futures contracts. These fixed maturities and equities securities were primarily corporate securities.<br /><br />The following information about fixed maturities excludes trading and hybrid securities. The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at December 31, 2009: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Amortized </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Fair</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Cost</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Value</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Due in one year or less</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 624 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 640 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Due after one year through five years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 3,923 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,155 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Due after five years through ten years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,765 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 5,048 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Due after ten years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,570 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,853 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Mortgage and other asset-backed securities</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 653 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 696 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,535 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,392 </b></td></tr></table><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 $37 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 /><br />Gross unrealized appreciation (depreciation) on fixed maturities (excluding trading securities and hybrid securities) by type of issuer is shown below. <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>December 31, 2009</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Unrealized</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Unrealized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Amortized</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Appre-</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Depre-</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Fair</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i> </i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Cost</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>ciation</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>ciation</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Value</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Federal government and agency</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 398 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 174 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (1)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 571 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">State and local government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,341 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 188 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (8)</b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,521 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Foreign government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,040 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 38 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (8)</b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,070 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Corporate</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 8,104 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 529 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (98)</b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 8,535 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Federal agency mortgage-backed </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 33 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Other mortgage-backed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 125 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 5 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (10)</b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 120 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Other asset-backed</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 494 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 55 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (8)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 541 </b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,535 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 990 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (133)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,392 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i>(In millions)</i></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><i> </i></td><td width="357" align="center" colspan="7" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">December 31, 2008</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Federal government and agency</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 359 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 403 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 762 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">State and local government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,391 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 117 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (22)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,486 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Foreign government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 882 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 70 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (8)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 944 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Corporate</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 7,197 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 167 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (529)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6,835 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Federal agency mortgage-backed (1)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 37 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Other mortgage-backed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 149 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (25)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 124 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Other asset-backed</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 455 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 128 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (13)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 570 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,469 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 886 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (597)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,758 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="529" align="left" colspan="5" style="background-color: #FFFFFF;" height="17"><i>(1) Federal agency mortgage-backed securities were first purchased in 2008 as part of the acquired business.</i></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr></table><p>The above table includes investments with a fair value of $2.3 billion supporting the Company’s run-off settlement annuity business, with gross unrealized appreciation of $326 million and gross unrealized depreciation of $52 million at December 31, 2009. Such unrealized amounts are required to support future policy benefit liabilities of this business and, accordingly, are not included in accumulated other comprehensive income. At December 31, 2008, investments supporting this business had a fair value of $2.5 billion, gross unrealized appreciation of $624 million and gross unrealized depreciation of $110 million. <br /><br />As of December 31, 2009, the Company had commitments to purchase $72 million of fixed maturities bearing interest at a fixed market rate.<br /><br />Review of declines in fair value. Management reviews fixed maturities for impairment based on criteria that include:<br /><br /></p><ul><li>        length of time and severity of decline;<br /></li><li>        financial health and specific near term prospects of the issuer;<br /></li><li>        changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and<br /></li><li>        the Company’s intent to sell or the likelihood of a required sale prior to recovery.<br /></li></ul><p><br />Fixed maturities (excluding trading and hybrid securities) which were primarily investment grade corporate bonds with a decline in fair value from cost were as follows, including the length of time of such decline: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="341"><i>(Dollars in millions)</i></td><td width="357" align="center" colspan="7" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>December 31, 2009</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Fair </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Amortized </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Unrealized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Number</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i> </i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Value</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Cost</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Depreciation</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>of Issues</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Fixed maturities:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">One year or less:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,637 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,671 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (34)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>333 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 79 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 85 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (6)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>55 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">More than one year:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 754 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 838 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (84)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b>120 </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 57 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 66 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (9)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b>14 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i>(Dollars in millions)</i></td><td width="357" align="center" colspan="7" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">December 31, 2008</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Fixed maturities:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">One year or less:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,930 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 3,255 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (325)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">622 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 372 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 425 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (53)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">113 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">More than one year:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 920 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,130 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (210)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">214 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 49 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 58 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75">13 </td></tr></table><p>As of December 31, 2009, the unrealized depreciation of investment grade fixed maturities is primarily due to increases in market yields since purchase. Approximately $40 million of the unrealized depreciation is due to securities with a decline in value of greater than 20%. The remaining $93 million of the unrealized depreciation is due to securities with declines in value of less than 20%. There were no equity securities with a material decline in fair value from cost as of December 31, 2009. See Note 14(B) for discussion of impairments included in realized investment gains and losses. <br /><br /></p><ul><li>Commercial Mortgage Loans and Real Estate<br /></li></ul><p><br />Mortgage loans held by the Company are made exclusively to commercial borrowers; therefore there is no exposure to either prime or sub-prime residential mortgages. The Company’s commercial mortgage loans and real estate investments are diversified by property type, location and, for commercial mortgage loans, borrower. Generally, commercial mortgage loans are carried at unpaid principal balances and are issued at a fixed rate of interest.<br /><br />In connection with the Company’s investment strategy to enhance investment yields by selling senior participations, commercial mortgage loans include loans that were originated with the intent to sell of $75 million as of December 31, 2008. There were no loans held for sale as of December 31, 2009.<br /><br />At December 31, commercial mortgage loans and real estate investments were distributed among the following property types and geographic regions:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518"><b>Property type</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Office buildings</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,161 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,118 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Apartment buildings</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 901 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 988 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Industrial</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 595 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 546 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Hotels </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 499 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 512 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Retail facilities</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 426 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 441 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518">Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 64 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 65 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 3,646 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,670 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518"><b>Geographic region</b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Pacific</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,069 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,102 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">South Atlantic</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 735 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 779 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">New England</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 582 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 546 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Central </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 517 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 512 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="518">Middle Atlantic</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 408 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 394 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518">Mountain</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 335 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 337 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="518">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 3,646 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,670 </td></tr></table><p>At December 31, 2009, scheduled commercial mortgage loan maturities were as follows (in millions): $278 in 2010, $394 in 2011, $644 in 2012, $613 in 2013 and $1,593 thereafter.<br /><br />Actual maturities could differ from contractual maturities for several reasons: borrowers may have the right to prepay obligations, with or without prepayment penalties; the maturity date may be extended; and loans may be refinanced. <br /><br />Real estate investments with a carrying value of $55 million at December 31, 2009 and $13 million at December 31, 2008 were non-income producing during the preceding twelve months.<br /><br />As of December 31, the Company had impaired commercial mortgage loans and related valuation reserves (excluding loans held for sale) as follows:<br /><br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="326"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td width="166" align="center" colspan="5" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="11"> </td><td width="180" align="center" colspan="6" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="326"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="44"><b>Gross </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="49"><b>Reserves</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="14"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="45"><b>Net</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="11"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="14"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="44">Gross </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="49">Reserves</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="45">Net</td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="326">Impaired commercial mortgage loans with valuation reserves</td><td height="17" style="border-top: 1px solid #000000;" align="center" width="14"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="44"><b> 143 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="14"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="49"><b> (17)</b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="14"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="45"><b> 126 </b></td><td height="17" style="border-top: 1px solid #000000;" align="right" width="11"> </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="44"> - </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="49"> - </td><td height="17" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="45"> - </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="326">Impaired commercial mortgage loans with no valuation reserves</td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="14"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="44"><b> 96 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="14"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="49"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="14"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="45"><b> 96 </b></td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="11"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="44"> 59 </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="49"> - </td><td height="17" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="45"> 59 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="326">Total </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="14"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="44"><b> 239 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="14"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="49"><b> (17)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="14"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="45"><b> 222 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="11"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="44"> 59 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="49"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="center" width="14">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="45"> 59 </td></tr></table><p>During 2009, the Company recorded a $17 million pre-tax ($11 million after-tax) increase to valuation reserves on impaired commercial mortgage loans. Commercial mortgage loans without valuation reserves are also considered impaired (probable that the Company will not collect all amounts due according to the terms of the original loan agreements); however, the Company expects to recover their remaining carrying value primarily because it is less than the fair value of the underlying collateral of these loans. The average recorded investment in impaired mortgage loans was $116 million during December 31, 2009 and $12 million during December 31, 2008. Pre-tax interest income recognized on impaired commercial mortgage loans was $3 million in 2009 and $1 million in 2008. </p><p>As of December 31, 2009, the Company had commitments to extend credit under commercial mortgage loan agreements of $41 million, all of which were at a fixed rate of interest. These loan commitments are diversified by property type and geographic region. As of December 31, 2009, the Company had commitments to contribute additional equity of $10 million to real estate investments. The Company expects to disburse most of the committed amounts in 2010.<br /><br /></p><ul><li>Other Long-term Investments<br /></li></ul><p><br />As of December 31, other long-term investments consisted of the following:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Real estate entities</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 289 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 321 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Securities partnerships</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 272 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 242 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Interest rate and foreign currency swaps</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 45 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Mezzanine loans</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 13 </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 5 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 595 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 632 </td></tr></table><p>Investments in real estate entities and securities partnerships with a carrying value of $121 million at December 31, 2009 and $96 million at December 31, 2008 were non-income producing during the preceding twelve months.<br /><br />As of December 31, 2009, the Company had commitments to contribute: <br /><br /></p><ul><li>$253 million to limited liability entities that hold either real estate or loans to real estate entities that are diversified by property type and geographic region; and<br /></li><li>$338 million to entities that hold securities diversified by issuer and maturity date.<br /></li></ul><p><br />The Company expects to disburse approximately 40% of the committed amounts in 2010 and the remaining amounts by 2015.</p><p>D. Short-Term Investments and Cash Equivalents<br /><br />Short-term investments and cash equivalents included corporate securities of $624 million, federal government securities of $402 million and money market funds of $104 million at December 31, 2009. The Company’s short-term investments and cash equivalents at December 31, 2008 included corporate securities of $1.1 billion, federal government securities of $126 million and money market funds of $147 million. <br /><br /></p><ul><li>Concentration of Risk<br /></li></ul><p><br />As of December 31, 2009 and 2008, the Company did not have a concentration of investments in a single issuer or borrower exceeding 10% of shareholders’ equity.<br /></p></div>
<div style="font-size:12pt"><p>Note 13 — Derivative Financial Instruments<br />The Company’s investment strategy is to manage the characteristics 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. 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, from time to time, to enhance investment returns. <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 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 /></p><ul><li>Derivatives are reported on the balance sheet at fair value with changes in fair values reported in net income or accumulated other comprehensive income.<br /></li><li>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 /></li><li>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 net income (generally as part of realized investment gains and losses). <br /></li></ul><p><br />Certain subsidiaries of the Company are parties to over-the-counter derivative instruments that contain provisions requiring both 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 subsidiaries of the Company were in a net liability position as of December 31, 2009 was $29 million for which the Company was not required to post collateral with its counterparties. If the various contingent features underlying the agreements were triggered as of December 31, 2009, the Company would be required to post collateral equal to the total net liability. 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 December 31, 2009, there was no net liability position under such derivative instruments. <br /><br />See Note 7 for a discussion of derivatives associated with GMDB contracts and Note 11 for a discussion of derivatives arising from GMIB contracts. <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 and effect on the financial statements as of and for the period ended December 31, 2009. Derivatives in the Company’s separate accounts are not included because associated gains and losses generally accrue directly to policyholders.<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="12" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 2px solid #000000;" height="12"><b> </b></td></tr><tr><td height="29" style="border-left: 2px solid #000000;" align="left" width="110"><b>Instrument / Volume of Activity</b></td><td height="29" width="12" align="left"><b> </b></td><td height="29" width="110" align="left"><b>Primary Risk</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Purpose</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Cash Flows</b></td><td height="29" width="12" align="left"><b> </b></td><td width="188" align="left" height="29" colspan="4"><b>Accounting Policy</b></td></tr><tr><td height="12" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="188" align="center" colspan="4" style="border-bottom: 2px solid #000000;" height="12"> </td></tr><tr><td width="728" align="left" colspan="14" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;border-left: 2px solid #000000;" height="18"><b>Derivatives Designated as Accounting Hedges - Cash Flow Hedges</b></td></tr><tr><td height="233" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Interest rate swaps — $160 million of par value of related investments
Foreign currency swaps — $179 million of U.S. dollar equivalent par value of related investments
Combination swaps (interest rate and foreign currency) — $54 million of U.S. dollar equivalent par value of related investments</b></td><td height="233" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Interest rate and foreign currency</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">To hedge the interest and/or foreign currency cash flows of fixed maturities and commercial mortgage loans to match associated liabilities. Currency swaps are primarily euros, Australian dollars, Canadian dollars and British pounds for periods of up to 12 years.</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">The Company periodically exchanges cash flows between variable and fixed interest rates and/or between two currencies for both principal and interest. Net interest cash flows are reported in net investment income and included in operating activities.</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">Using cash flow hedge accounting, fair values are reported in other long-term investments or other liabilities and accumulated other comprehensive income and amortized into net investment income or reported in other realized investment gains and losses as interest or principal payments are received.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements (in millions)</b></td></tr><tr><td height="34" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="34" width="12" align="left"> </td><td height="34" style="border-top: 1px solid #000000;" align="left" width="110"><b> </b></td><td height="34" style="border-top: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="284" align="center" colspan="5" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>As of December 31, 2009</b></td><td height="34" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="34"><b>Gain (Loss) Recognized in Other Comprehensive Income</b></td></tr><tr><td height="39" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="39" width="12" align="left"> </td><td height="39" style="border-bottom: 1px solid #000000;" align="left" width="110"><b>Instrument</b></td><td height="39" style="border-bottom: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="39"><b>Other Long-Term Investments</b></td><td height="39" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="39"><b>Accounts Payable, Accrued Expenses and Other Liabilities</b></td><td height="39" style="border-bottom: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="39"><b>For the year ended December 31, 2009</b></td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="110">Interest rate swaps</td><td height="17" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="117"> 8 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="117"> - </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (5)</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td height="17" width="110" align="left">Foreign currency swaps</td><td height="17" width="12" align="left"> </td><td height="17" width="19" align="right"> </td><td height="17" width="117" align="right"> 4 </td><td height="17" width="12" align="left"> </td><td height="17" width="19" align="right"> </td><td height="17" width="117" align="right"> 24 </td><td height="17" width="12" align="left"> </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="right"> </td><td height="17" style="border-right: 2px solid #000000;" align="right" width="75"> (24)</td></tr><tr><td height="25" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="25" width="12" align="left"> </td><td height="25" width="110" align="left">Interest rate and foreign currency swaps</td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="117"> - </td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="117"> 6 </td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (12)</td></tr><tr><td height="18" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="110">Total</td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="117"> 12 </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="117"> 30 </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (41)</td></tr><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td height="109" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Purchased options — $312 million of cash surrender value of related life insurance policies</b></td><td height="109" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="109" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Interest rate</td><td height="109" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="109">To hedge the possibility of early policyholder cash surrender when the amortized cost of underlying invested assets is greater than their fair values.</td><td height="109" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="109">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. </td><td height="109" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="109">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 other benefit expenses over the life of the underlying invested assets.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements</b></td></tr><tr><td height="18" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" height="18">Fair values reported in other assets and other comprehensive income were less than $1 million.</td></tr><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td height="85" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Treasury lock</b></td><td height="85" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="85" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Interest rate</td><td height="85" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="85">To hedge the variability of and fix at inception date, the benchmark Treasury rate component of future interest payments on debt to be issued.</td><td height="85" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="85">The Company paid the fair value of the contracts at their expiration and reported the cash outflow in operating activities.</td><td height="85" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="85">Using cash flow hedge accounting, fair values were reported in short-term investments or other liabilities, with changes in fair value reported in accumulated other comprehensive income. The net cumulative gain or loss from the contracts are amortized to interest expense over the life of the debt issued.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements</b></td></tr><tr><td height="39" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="39" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" height="39">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. These losses are amortized to interest expense over the life of the debt beginning in the second quarter of 2009.</td></tr></table><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><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="12" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="19"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 2px solid #000000;" height="12"><b> </b></td></tr><tr><td height="29" style="border-left: 2px solid #000000;" align="left" width="110"><b>Instrument / Volume of Activity</b></td><td height="29" width="19" align="left"><b> </b></td><td height="29" width="110" align="left"><b>Primary Risk</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Purpose</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Cash Flows</b></td><td height="29" width="12" align="left"><b> </b></td><td width="188" align="left" height="29" colspan="4"><b>Accounting Policy</b></td></tr><tr><td height="12" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="19"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="188" align="center" colspan="4" style="border-bottom: 2px solid #000000;" height="12"> </td></tr><tr><td width="735" align="left" colspan="14" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;border-left: 2px solid #000000;" height="18"><b>Derivatives Not Designated As Accounting Hedges</b></td></tr><tr><td height="145" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Futures — $1,058 million of U.S. dollar equivalent market price of outstanding contracts</b></td><td height="145" style="border-top: 2px solid #000000;" align="left" width="19"><b> </b></td><td height="145" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Equity and foreign currency</td><td height="145" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="145">To reduce domestic and international equity market exposures for certain reinsurance contracts that guarantee minimum death benefits (GMDB) resulting from changes in variable annuity account values based on underlying mutual funds. Currency futures are primarily euros, Japanese yen and British pounds.</td><td height="145" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="145">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.</td><td height="145" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="145">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.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="19" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements (in millions)</b></td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="110"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="12"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="117"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="117"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Other Revenues</b></td></tr><tr><td height="27" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="27" width="19" align="left"> </td><td height="27" width="110" align="left"><b> </b></td><td height="27" width="12" align="left"><b> </b></td><td width="136" align="center" height="27" colspan="2"><b> </b></td><td height="27" width="12" align="center"><b> </b></td><td width="136" align="center" height="27" colspan="2"><b> </b></td><td height="27" width="12" align="center"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>For the year ended December 31, 2009</b></td></tr><tr><td height="18" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="110">Futures</td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (283)</td></tr><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td height="81" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Interest rate swaps — $76 million of par value of related investments</b></td><td height="81" style="border-top: 2px solid #000000;" align="left" width="19"><b> </b></td><td height="81" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Interest rate</td><td height="81" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="81">To hedge the interest cash flows of fixed maturities to match associated liabilities. </td><td height="81" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="81">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.</td><td height="81" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="81">Fair values are reported in other long-term investments or other liabilities, with changes in fair value reported in other realized investment gains (losses).</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="19" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements (in millions)</b></td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="19" align="left"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="110"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>As of December 31, 2009</b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="117"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Other Realized Investment Gains (Losses)</b></td></tr><tr><td height="27" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="27" width="19" align="left"> </td><td height="27" width="110" align="left"><b> </b></td><td height="27" style="border-bottom: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>Other Long-Term Investments</b></td><td height="27" width="12" align="center"><b> </b></td><td height="27" width="19" align="left"><b> </b></td><td height="27" width="117" align="left"><b> </b></td><td height="27" width="12" align="center"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>For the year ended December 31, 2009</b></td></tr><tr><td height="18" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="110">Interest rate swaps</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="117"> 4 </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (1)</td></tr><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="117"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td height="201" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Written options (GMIB liability) — $1,183 million of maximum potential undiscounted future payments as defined in Note 23
Purchased options (GMIB asset) — $651 million of maximum potential undiscounted future receipts as defined in Note 23</b></td><td height="201" style="border-top: 2px solid #000000;" align="left" width="19"><b> </b></td><td height="201" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Equity and interest rate</td><td height="201" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="201">The Company has written reinsurance contracts with issuers of variable annuity contracts that provide annuitants with certain guarantees of minimum income benefits, resulting from the level of variable annuity account values compared with a contractually guaranteed amount. 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 reduce a portion of the market risk assumed. These contracts are accounted for as written and purchased options.</td><td height="201" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="201">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 contractholders first elect to receive minimum income payments. These cash flows are reported in operating activities.</td><td height="201" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="201">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.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="19" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements (in millions)</b></td></tr><tr><td height="27" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="27" width="19" align="left"> </td><td height="27" style="border-top: 1px solid #000000;" align="left" width="110"><b> </b></td><td height="27" style="border-top: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="284" align="center" colspan="5" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>As of December 31, 2009</b></td><td height="27" style="border-top: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>Guaranteed Minimum Income Benefits (Income) Expense</b></td></tr><tr><td height="27" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="27" width="19" align="left"> </td><td height="27" style="border-bottom: 1px solid #000000;" align="left" width="110"><b>Instrument</b></td><td height="27" style="border-bottom: 1px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>Other Assets</b></td><td height="27" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>Accounts Payable, Accrued Expenses and Other Liabilities</b></td><td height="27" style="border-bottom: 1px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="27"><b>For the year ended December 31, 2009</b></td></tr><tr><td height="25" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="25" width="19" align="left"> </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="110">Written options (GMIB liability)</td><td height="25" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="25" style="border-top: 1px solid #000000;" align="right" width="117"> - </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="25" style="border-top: 1px solid #000000;" align="right" width="117"> 903 </td><td height="25" style="border-top: 1px solid #000000;" align="left" width="12"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="25" style="border-top: 1px solid #000000;" align="right" width="75"> </td><td height="25" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-top: 1px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (669)</td></tr><tr><td height="25" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="25" width="19" align="left"> </td><td height="25" width="110" align="left">Purchased options (GMIB asset)</td><td height="25" width="12" align="left"> </td><td height="25" width="19" align="right"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="117"> 482 </td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="117"> - </td><td height="25" width="12" align="left"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="75"> </td><td height="25" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="25" style="border-bottom: 1px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> 365 </td></tr><tr><td height="18" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="19"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="110">Total</td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="117"> 482 </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="117"> 903 </td><td height="18" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;border-right: 2px solid #000000;" align="right" width="75"> (304)</td></tr></table></div>
<div style="font-size:12pt"><p>Note 14— Investment Income and Gains and Losses<br /><br /></p><ul><li>Net Investment Income<br /></li></ul><p><br />The components of pre-tax net investment income for the years ended December 31 were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i>(In millions)</i></td><td width="90" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Fixed maturities</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="15"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 748 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 729 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 722 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Equity securities</td><td height="17" style="background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 7 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Commercial mortgage loans</td><td height="17" style="background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 223 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 219 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 240 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Policy loans</td><td height="17" style="background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 92 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 86 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 81 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Real estate</td><td height="17" style="background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (1)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 5 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Other long-term investments</td><td height="17" style="background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (30)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Short-term investments and cash</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 10 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 43 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 78 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,049 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,092 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,158 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Less investment expenses</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="15"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 35 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 29 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 44 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Net investment income</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="15"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,014 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,063 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,114 </td></tr></table><p>Net investment income for separate accounts (which is not reflected in the Company’s revenues) was $22 million for 2009, $148 million for 2008, and $215 million for 2007. <br /><br />B. Realized Investment Gains and Losses<br /><br />The following realized gains and losses on investments for the years ended December 31 exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.<br /><br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i>(In millions)</i></td><td width="88" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Fixed maturities</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (237)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (26)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Equity securities</td><td height="17" style="background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 12 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (31)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Commercial mortgage loans</td><td height="17" style="background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (20)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (2)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Other investments, including derivatives</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (37)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 100 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 21 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Realized investment gains (losses) from continuing operations, before income taxes</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (43)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (170)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 16 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Less income taxes (benefits)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (17)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (60)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 5 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Less realized gains attributable to noncontrolling interests</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Realized investment gains (losses) from continuing operations</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (26)</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (110)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Realized investment gains from discontinued operations, before income taxes</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 25 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Less income taxes</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 9 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Realized investment gains from discontinued operations</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="13"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 16 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Net realized investment gains (losses)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="13"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (26)</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (110)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 26 </td></tr></table><p>Included in pre-tax realized investment gains (losses) above were asset write-downs and changes in valuation reserves as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="5" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(in millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Credit related (1)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 93 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 67 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 18 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Other (2)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 150 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 22 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Total (3)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 106 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 217 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 40 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="728" align="left" colspan="7" style="background-color: #FFFFFF;" height="48"><i>(1) Credit-related losses include other-than-temporary declines in fair value of fixed maturities and equity securities, and impairments of commercial mortgage loans 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></td></tr><tr><td width="728" align="left" colspan="7" style="background-color: #FFFFFF;" height="37"><i>(2) Prior to adoption of new GAAP guidance for other-than-temporary impairments 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></td></tr><tr><td height="3" style="background-color: #FFFFFF;" align="left" width="446"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="3" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="728" align="left" colspan="7" style="background-color: #FFFFFF;" height="35"><i>(3) Includes other-than-temporary impairments on debt securities of $47 million in 2009, $213 million in 2008 and $31 million in 2007. These impairments are included in both the credit related and other categories above.</i></td></tr></table><p>The Company recognized pre-tax gains of $13 million in 2009 and pre-tax losses of $31 million in 2008 on hybrid securities. Losses in 2008 include $14 million on hybrid securities (classified as equity securities) of certain quasi-federal government agencies where the Company believes that the decline in fair value is other than temporary.<br /><br />Realized investment losses in 2009 in other investments, including derivatives primarily represent impairments of real estate entities. In 2008, gains primarily represented gains on the sales of real estate properties held in joint ventures.<br /><br />Realized investment gains and (losses) that are not reflected in the Company’s revenues for the years ended December 31 were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="470"><i>(In millions)</i></td><td width="85" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="85" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="85" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="470">Separate accounts</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"><b> (25)</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"> (146)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"> 652 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="470">Investment gains required to adjust future policy benefits for the run-off settlement annuity business</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"><b> 51 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"> 8 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="66"> 18 </td></tr></table><p>Sales information for available-for-sale fixed maturities and equity securities, for the years ended December 31 were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Proceeds from sales</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 949 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,465 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,040 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Gross gains on sales</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 51 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 26 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Gross losses on sales</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (9)</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (53)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (12)</td></tr></table></div>
<div style="font-size:12pt"><p>Note 15 ― Debt</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><b>Short-term:</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Commercial paper</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 100 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 299 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Current maturities of long-term debt</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total short-term debt</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 104 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 301 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><b>Long-term:</b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">Uncollateralized debt:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">7% Notes due 2011</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 222 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 222 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">6.375% Notes due 2011</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 226 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 226 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">5.375% Notes due 2017</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 250 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 250 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">6.35% Notes due 2018</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 300 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 300 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">8.5% Notes due 2019</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 349 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">6.37% Notes due 2021</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 78 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 78 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">7.65% Notes due 2023</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 100 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 100 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">8.3% Notes due 2023</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 17 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 17 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">7.875% Debentures due 2027</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 300 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 300 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">8.3% Step Down Notes due 2033</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 83 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 83 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="530">6.15% Notes due 2036</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 500 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 500 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Other</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 11 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 14 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total long-term debt</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,436 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,090 </td></tr></table><p>Under a universal shelf registration statement filed with the Securities and Exchange Commission, 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 treasury locks. See Note 13 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). The difference between the stated and effective interest rates primarily reflects the effect of treasury locks. 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 40 basis points.<br /> <br />Maturities of debt and capital leases are as follows (in millions): $4 in 2010, $452 in 2011, $3 in 2012, $3 in 2013, none in 2013 and the remainder in years after 2013. Interest expense on long-term debt, short-term debt and capital leases was $166 million in 2009, $146 million in 2008, and $122 million in 2007.<br /><br />On March 14, 2008, the Company entered into a 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 facility for funding. In October 2008, the Company added an additional dealer to its Program. As of December 31, 2009, the Company had $100 million in commercial paper outstanding, at a weighted average interest rate of 0.35%, used for corporate purposes.<br /><br />In June 2007, the Company amended and restated its five-year revolving credit and letter of credit agreement for $1.75 billion, which permits up to $1.25 billion to be used for letters of credit. The agreement includes options, which are subject to consent by the administrative agent and the committing bank, to increase the commitment amount up to $2.0 billion and to extend the term of the agreement. The Company entered into the agreement for general corporate purposes, including the support for the issuance of commercial paper and to obtain statutory reserve credit for certain reinsurance arrangements. There was a $27 million letter of credit issued as of December 31, 2009. As of December 31, 2009, the Company had an additional $1.5 billion of borrowing capacity within the maximum debt leverage covenant in the line of credit agreement in addition to the $2.5 billion of debt outstanding.<br /></p></div>
<div style="font-size:12pt"><p>Note 16 — Common and Preferred Stock<br /><br />As of December 31, the Company had issued the following shares:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="558"><i>(Shares in thousands)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2008 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="558">Common: Par value $0.25</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="558">   600,000 shares authorized</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="558">   Outstanding - January 1</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 271,036 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 279,588 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="558">   Issued for stock option and other benefit plans</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 3,221 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,458 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="558">   Repurchase of common stock</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (10,010)</td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="558">   Outstanding - December 31</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 274,257 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 271,036 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="558">   Treasury stock</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 76,689 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 79,910 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="558">Issued - December 31</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 350,946 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 350,946 </td></tr></table><p>The Company maintains a share repurchase program, which was authorized by its Board of Directors. The decision to repurchase shares depends on market conditions and alternative uses of capital. The Company has, and may continue from time to time, to repurchase shares on the open market through a Rule 10b5-1 plan that permits a company to repurchase its shares at times when it otherwise might be precluded from doing so under insider trading laws or because of self-imposed trading blackout periods. <br /><br />The Company has authorized a total of 25 million shares of $1 par value preferred stock. No shares of preferred stock were outstanding at December 31, 2009 or 2008. <br /><br /><br /></p></div>
<div style="font-size:12pt"><p>Note 18 — Shareholders’ Equity and Dividend Restrictions<br /><br />State insurance departments and foreign jurisdictions that regulate certain of the Company’s subsidiaries prescribe accounting practices (which differ in some respects from GAAP) to determine statutory net income and surplus. The Company’s life insurance and HMO company subsidiaries are regulated by such statutory requirements. The statutory net income for the years ended, and statutory surplus as of, December 31 of the Company’s life insurance and HMO subsidiaries were as follows:<br /><br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net income </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,088 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 420 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,130 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Surplus</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4,728 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,638 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3,346 </td></tr></table><p>As of December 31, 2009, statutory surplus for each of the Company’s life insurance and HMO subsidiaries is sufficient to meet the minimum required by regulators. As of December 31, 2009, the Company’s life insurance and HMO subsidiaries had investments on deposit with state departments of insurance with statutory carrying values of $349 million. The Company’s life insurance and HMO subsidiaries are also subject to regulatory restrictions that limit the amount of annual dividends or other distributions (such as loans or cash advances) insurance companies may extend to the parent company without prior approval of regulatory authorities. The maximum dividend distribution that the Company’s life insurance and HMO subsidiaries may make during 2010 without prior approval is approximately $1.0 billion. Restricted net assets of the Company as of December 31, 2009, were approximately $4.0 billion. One of the Company’s life insurance subsidiaries is permitted to loan up to $400 million to the parent company without prior approval.<br /></p></div>
<div style="font-size:12pt"><p>Note 17 — Accumulated Other Comprehensive Income (Loss)<br /><br />Accumulated other comprehensive income (loss) excludes amounts required to adjust future policy benefits for the run-off settlement annuity business.<br /><br />Changes in accumulated other comprehensive income (loss) were as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>(Expense)</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>After-</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Pre-Tax</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Benefit</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="432"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><b>Net unrealized appreciation, securities:</b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="432">Implementation effect of updated guidance on other-than-temporary impairments</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> (27)</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 9 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> (18)</b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="432">Net unrealized appreciation on securities arising during the year</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 843 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> (292)</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 551 </b></td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Reclassification adjustment for (gains) included in shareholders' net income</td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (14)</b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 3 </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (11)</b></td></tr><tr><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Net unrealized appreciation, securities </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 802 </b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (280)</b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 522 </b></td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><b>Net unrealized depreciation, derivatives</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (30)</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13 </b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (17)</b></td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><b>Net translation of foreign currencies</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 76 </b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (28)</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 48 </b></td></tr><tr><td height="19" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432"><b>Postretirement benefits liability adjustment: </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="19" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="432">Reclassification adjustment for amortization of net losses from past</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="432">   experience and prior service costs</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 7 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> (3)</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 4 </b></td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Curtailment gain</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (46)</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (30)</b></td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Reclassification adjustment included in shareholders' net income</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (39)</b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (26)</b></td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Net change arising from assumption and plan changes and experience</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (107)</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 36 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (71)</b></td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="432">Net postretirement benefits liability adjustment</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (146)</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 49 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (97)</b></td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>(Expense)</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>After-</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Pre-Tax</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Benefit</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="446">2008 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net unrealized depreciation, securities:</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Net unrealized depreciation on securities arising during the year</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (706)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 245 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (461)</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Reclassification adjustment for losses included in net income</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 268 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (94)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 174 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net unrealized depreciation, securities </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (438)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 151 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (287)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net unrealized appreciation, derivatives</b></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 9 </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (3)</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 6 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net translation of foreign currencies:</b></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (183)</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 62 </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (121)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Postretirement benefits liability adjustment: </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Reclassification adjustment for amortization of net losses from past</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">   experience and prior service costs</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (7)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 14 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net change arising from assumption and plan changes and experience</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,134)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 397 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (737)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net postretirement benefits liability adjustment</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,113)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 390 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (723)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>(Expense)</b></td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>After-</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Pre-Tax</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Benefit</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Tax</b></td></tr><tr><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="446">2007 </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="25" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net unrealized depreciation, securities:</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Implementation effect of updated guidance on accounting for hybrid financial instruments</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (18)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (12)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Net unrealized depreciation on securities arising during the year</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (68)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (44)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Reclassification due to sale of discontinued operations</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (23)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (15)</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Reclassification adjustment for losses included in shareholders' net income</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (4)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 9 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net unrealized depreciation, securities </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (96)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 34 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (62)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net unrealized depreciation, derivatives</b></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (6)</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (4)</td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Net translation of foreign currencies:</b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Net translation of foreign currencies arising during the year</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 33 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (10)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 23 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Reclassification due to sale of discontinued operations</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (3)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net translation of foreign currencies</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 41 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (13)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 28 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Postretirement benefits liability adjustment: </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Reclassification adjustment for amortization of net losses from past</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">   experience and prior service costs</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 95 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (33)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 62 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net change arising from assumption and plan changes and experience</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 301 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (105)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 196 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Net postretirement benefits liability adjustment</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 396 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (138)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 258 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 19 — Income Taxes<br /><br />A. Income Tax Expense<br /><br />The components of income taxes for the years ended December 31 were as follows:<br /><br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439"><b>Current taxes</b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="439">U.S. income</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 211 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 255 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 462 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="439">Foreign income</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 48 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 57 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 36 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439">State income</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 275 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 313 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 511 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439"><b>Deferred taxes (benefits)</b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="439">U.S. income</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 279 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> (224)</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="439">Foreign income</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 39 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> (2)</td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439">State income</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 319 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (221)</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="439">Total income taxes</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 594 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 92 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 511 </td></tr></table><p>Total income taxes for the years ended December 31 were different from the amount computed using the nominal federal income tax rate of 35% for the following reasons:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="437"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="437">Tax expense at nominal rate</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 664 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 135 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 571 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="437">Tax-exempt interest income</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (31)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (32)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (32)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="437">Effect of permanently invested foreign earnings</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (23)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="437">Dividends received deduction</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> (3)</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="437">Resolution of federal tax matters</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> (27)</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (1)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (26)</td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="437">State income tax (net of federal income tax benefit)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 12 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 10 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="437">Change in valuation allowance</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> (2)</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> (15)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> (24)</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="437">Other</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4 </b></td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 7 </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 15 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="437">Total income taxes</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 594 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 92 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 511 </td></tr></table><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 2009 by $23 million essentially representing unrecognized deferred tax liabilities attributable to the South Korean investment which is considered to be permanent in nature. <br /><br />B. Deferred Income Taxes<br /><br />Deferred income tax assets and liabilities as of December 31 are shown below. <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><b>Deferred tax assets</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Employee and retiree benefit plans</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 774 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 921 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Investments, net</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 111 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 130 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Other insurance and contractholder liabilities</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 430 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 454 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Deferred gain on sale of business</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 67 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 78 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Policy acquisition expenses</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 144 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 147 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Loss carryforwards</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 104 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 111 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Other accrued liabilities</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 111 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 110 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Bad debt expense</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 16 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 22 </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Other </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 34 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 39 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Deferred tax assets before valuation allowance</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,791 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,012 </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Valuation allowance for deferred tax assets</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (116)</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (126)</td></tr><tr><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Deferred tax assets, net of valuation allowance</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,675 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,886 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530"><b>Deferred tax liabilities</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Depreciation and amortization</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 291 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 238 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="530">Unrepatriated foreign income, net</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 151 </b></td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 135 </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Unrealized appreciation (depreciation) on investments and foreign currency translation </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 204 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (104)</td></tr><tr><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Total deferred tax liabilities</td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 646 </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 269 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="530">Net deferred income tax assets</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,029 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,617 </td></tr></table><p>Management believes consolidated taxable income to be generated in the future will be sufficient in amount and character to support realization of the Company’s net deferred tax assets of $1.0 billion as of December 31, 2009 and $1.6 billion as of December 31, 2008. This determination is based upon the Company’s consistent overall earnings history and future earnings expectations. Other than deferred tax benefits attributable to operating loss and foreign tax credit carryforwards, there are no constraints on the period of time within which the Company’s deferred tax assets must be realized. Federal operating loss carryforwards of $283 million were available to offset future taxable income of the generating companies, and begin to expire in 2022. Foreign tax credit carryforwards of $11 million were generated in 2009 and may be carried forward 10 years. <br /><br />The Company’s deferred tax asset is net of a federal and state valuation allowance (see table above). The valuation allowance reflects management’s assessment that certain deferred tax assets may not be realizable. As was the case at December 31, 2008, the valuation allowance at December 31, 2009 relates primarily to operating losses, and other deferred tax benefits, of the run-off reinsurance operations. It is reasonably possible there could be a significant decline in the level of valuation allowance recorded against deferred tax benefits of the reinsurance operations within the next 12 months. <br /><br />C. Uncertain Tax Positions<br /><br />A reconciliation of unrecognized tax benefits for the years ended December 31 is as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="418"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="418">Balance at January 1, </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 164 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 260 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 245 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="418">Increase (decrease) due to prior year positions</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 5 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (119)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (31)</td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="418">Increase due to current year positions</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 76 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 34 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 51 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="418">Reduction related to settlements with taxing authorities</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> (28)</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (5)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="418">Reduction related to lapse of applicable statute </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="418">   of limitations</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (3)</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (6)</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (5)</td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="418">Balance at December 31,</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 214 </b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 164 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 260 </td></tr></table><p>The December 31, 2009 balance included $119 million that would impact net income if recognized. 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. The Company, however, is currently unable to reasonably estimate the potential impact of such changes. <br /><br />The Company classifies net interest expense on uncertain tax positions and any applicable penalties as a component of income tax expense, but excludes these amounts from the liability for uncertain tax positions. The Company’s liability for net interest and penalties was $13 million at December 31, 2009, $19 million at December 31, 2008 and $17 million at December 31, 2007. The 2009 decline included $13 million associated with the completion of an IRS examination. <br /><br />During 2009, the IRS completed its examination of the Company’s 2005 and 2006 tax years, resulting in a decline in the liability for uncertain tax positions of $36 million, of which $8 million impacted shareholders’ net income. In addition, the Company recorded a reduction of interest and penalties of $13 million resulting in a total impact to shareholders’ net income of $21 million of which: <br /><br /></p><ul><li>$20 million is reflected in continuing operations; and <br /></li><li>$1 million is reflected in discontinued operations.<br /></li></ul><p><br />During 2007, the IRS completed its examination of the Company’s 2003 and 2004 tax years. As a result, the Company recorded shareholders’ net income of $25 million, primarily attributable to the recognition of previously unrecognized tax benefits, of which:<br /><br /></p><ul><li>$23 million is reflected in continuing operations; and <br /></li><li>$2 million is associated with the disposition of Lovelace Health Systems, Inc. in 2003, and is reflected in discontinued operations.<br /></li></ul><p><br />D. Federal Income Tax Examinations, Litigation and Other Matters<br /><br />During the first quarter of 2009, 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, 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 shareholders’ net income of up to $15 million, representing net interest expense on the cumulative incremental tax for all affected years. In addition, two issues remain unresolved from the IRS examination of the Company’s 2005 and 2006 consolidated federal income tax returns. One of these unresolved issues is the same matter which remains in dispute from the prior IRS examination. The Company will attempt to resolve the other matter through the administrative appeals process, and filed a formal protest of the proposed adjustments on March 31, 2009. <br /><br />The IRS has commenced examination of the Company’s 2007 and 2008 consolidated federal income tax returns, completion of which is not expected during 2010. The Company conducts business in numerous states and foreign jurisdictions, and may be engaged in multiple audit proceedings at any given time. Generally, no further state or foreign audit activity for years prior to 2002 is expected. <br /><br />Congress could initiate tax reform legislation in 2010 that potentially includes changes to the U.S. taxation of foreign operations, similar to provisions previously considered for 2010. If ultimately enacted, these changes could increase the Company’s effective tax rate. </p></div>
<div style="font-size:12pt"><p>Note 20 — Employee Incentive Plans<br /><br />The People Resources Committee of the Board of Directors awards stock options, restricted stock and deferred stock to certain employees. To a very limited extent, the Committee has issued common stock instead of cash compensation and dividend equivalent rights as part of restricted and deferred stock units. The Company issues shares from Treasury stock for option exercises, awards of restricted stock and payment of deferred and restricted stock units. <br /><br />Compensation cost and related tax benefits for these awards were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Compensation cost</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 42 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 41 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 37 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Tax benefits</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 15 </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 14 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr></table><p>The Company had the following number of shares of common stock available for award at December 31: 23.3 million in 2009, 28.5 million in 2008 and 31.1 million in 2007.<br /><br />Stock options. The Company awards options to purchase the Company’s common stock at the market price of the stock on the grant date. Options vest over periods ranging from one to five years and expire no later than 10 years after the grant date. <br /><br />The table below shows the status of, and changes in, common stock options during the last three years:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="169"><i>(Options in thousands)</i></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">2008 </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="169"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Weighted </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17">Weighted </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17">Weighted </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="169"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Average</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17">Average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17">Average </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="169"> </td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Options</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Exercise Price</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Options</td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Exercise Price</td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Options</td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">Exercise Price</td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="169">Outstanding - January 1</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,258 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 35.48 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,430 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">32.69 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 17,955 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> 29.24 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="169">   Granted</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,709 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 14.15 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 2,311 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="center" width="75">46.53 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 1,662 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="center" width="75"> 46.97 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="169">   Exercised</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> (1,167)</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 25.32 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (1,058)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="center" width="75">27.40 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (7,757)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="center" width="75"> 27.67 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="169">   Expired or canceled</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (2,049)</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 33.42 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (425)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="center" width="75">40.67 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (430)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="center" width="75"> 34.73 </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="169">Outstanding - December 31</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,751 </b></td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 29.34 </b></td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,258 </td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="center" width="75">35.48 </td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,430 </td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="center" width="75"> 32.69 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="169">Options exercisable at year-end</td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 8,578 </b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 33.53 </b></td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8,687 </td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="center" width="75">31.19 </td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8,383 </td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="center" width="75"> 29.37 </td></tr></table><p>Compensation expense of $19 million related to unvested stock options at December 31, 2009 will be recognized over the next two years (weighted average period).<br /><br />The table below summarizes information for stock options exercised during the last three years:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Intrinsic value of options exercised</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="76"><b> 7 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 23 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 169 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Cash received for options exercised</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="76"><b> 30 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 26 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 203 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Excess tax benefits realized from options exercised</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="76"><b> - </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 6 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 39 </td></tr></table><p>The following table summarizes information for outstanding common stock options at December 31, 2009:<br /><br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="536"><i>(In millions, except options in</i></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Options </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Options </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="536"><i>   thousands)</i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Outstanding</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Exercisable</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="536">Number</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,751 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 8,578 </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="536">Total intrinsic value</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 123 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 41 </b></td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="536">Weighted average exercise price</td><td height="15" style="background-color: #FFFFFF;" align="left" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 29.34 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> 33.53 </b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="536">Weighted average remaining</td><td height="18" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="536">   contractual life </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b>6.0 years</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b>4.3 years</b></td></tr></table><p>The weighted average fair value of options granted under employee incentive plans was $4.60 for 2009, $14.33 for 2008 and $16.05 for 2007, using the Black-Scholes option-pricing model and the following assumptions:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="488"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2008 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="488">Dividend yield</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>0.3% </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">0.1%</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">0.1%</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="488">Expected volatility</td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>40.0% </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75">35.0%</td><td height="17" style="background-color: #FFFFFF;" align="center" width="75">35.0%</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="488">Risk-free interest rate</td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>1.6% </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75">2.2%</td><td height="17" style="background-color: #FFFFFF;" align="center" width="75">4.7%</td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="488">Expected option life</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>4 years</b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">4 years</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">4 years</td></tr></table><p>The expected volatility reflects the Company’s past daily stock price volatility. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining maturities of traded options are less than one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary grant. Expected option life reflects the Company’s historical experience excluding activity related to options granted under a replacement option feature. This feature was cancelled in 2004. <br /><br />Restricted stock. The Company awards restricted stock to its employees or directors with vesting periods ranging from one to five years. These awards are generally in one of two forms: restricted stock grants or restricted stock units. Restricted stock grants are the most widely used form of restricted stock awards and are used for substantially all U.S.-based employees receiving restricted stock awards. Recipients of restricted stock grants are entitled to receive dividends and to vote during the vesting period, but forfeit their awards if their employment terminates before the vesting date. Awards of restricted stock units are generally limited to international employees. A restricted stock unit represents a right to receive a common share of stock when the unit vests. Recipients of restricted stock units are entitled to receive hypothetical dividends, but cannot vote during the vesting period. They forfeit their units if their employment terminates before the vesting date. <br /><br />The table below shows the status of, and changes in, restricted stock grants and units during the last three years:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="193"><i>(Awards in thousands)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="80"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75">2008 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="75">2007 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="193"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="99" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Weighted</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17">Weighted</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17">Weighted</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="193"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="99" align="center" colspan="2" style="background-color: #FFFFFF;" height="17"><b>Average Fair Value</b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17">Average Fair Value</td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td width="94" align="center" colspan="2" style="background-color: #FFFFFF;" height="17">Average Fair Value</td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="193"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Grants/Units</b></td><td width="99" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>at Award Date</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">Grants/Units</td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">at Award Date</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75">Grants/Units</td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">at Award Date</td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="193">Outstanding - January 1</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,347 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="80"><b> 40.53 </b></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,482 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 34.28 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,802 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 26.72 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="193">   Awarded</td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,678 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="80"><b> 18.14 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 820 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 43.90 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 698 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 47.20 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="193">   Vested</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"><b> (557)</b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="80"><b> 32.00 </b></td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (760)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 23.81 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> (750)</td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 19.06 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="193">   Forfeited</td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (355)</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="80"><b> 33.79 </b></td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (195)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 40.47 </td><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (268)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 31.45 </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="193">Outstanding - December 31</td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 4,113 </b></td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="80"><b> 27.65 </b></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,347 </td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 40.53 </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,482 </td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 34.28 </td></tr></table><p>The fair value of vested restricted stock was: $10 million in 2009, $35 million in 2008 and $36 million in 2007. <br /><br />At the end of 2009, approximately 2,880 employees held 4.1 million restricted stock grants and units with $63 million of related compensation expense to be recognized over the next three years (weighted average period).<br /><br /></p></div>
<div style="font-size:12pt"><p>Note 21 — Leases, Rentals and Outsourced Service Arrangements<br /><br />Rental expenses for operating leases, principally for office space, amounted to $138 million in 2009, $131 million in 2008 and $114 million in 2007. As of December 31, 2009, future net minimum rental payments under non-cancelable operating leases were approximately $500 million, payable as follows (in millions): $116 in 2010, $107 in 2011, $83 in 2012, $60 in 2013, $44 in 2014 and $90 thereafter. <br /><br />The Company also has several outsourced service arrangements with third parties, primarily for human resource and information technology support services. The initial service periods under these arrangements range from two to seven years and their related costs are reported consistent with operating leases over the service period based on the pattern of use. The Company recorded in other operating expense $115 million in 2009, $113 million in 2008 and $87 million in 2007 for these arrangements.<br /></p></div>
<div style="font-size:12pt"><p>Note 22 ― 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 may be combined. The Company measures the financial results of its segments using “segment earnings (loss),” which is defined as income (loss) from continuing operations excluding after-tax realized investment gains and losses. <br /><br />Consolidated pre-tax income from continuing operations is primarily attributable to domestic operations. Consolidated pre-tax income from continuing operations generated by the Company's foreign operations was approximately 9% in 2009, 36% in 2008 and 11% in 2007. <br /><br />The Company determines segment earnings (loss) consistent with the accounting policies for the consolidated financial statements, except that amounts included in Corporate are not allocated to segments. The Company allocates certain other operating expenses, such as systems and other key corporate overhead expenses, on systematic bases. Income taxes are generally computed as if each segment were filing a separate income tax return. The Company does not report total assets by segment since this is not a metric used to allocate resources or evaluate segment performance. <br /><br />The Company presents segment information as follows:<br /><br />Health Care includes medical, dental, behavioral health, prescription drug and other products and services that may be integrated to support consumer-focused health care programs. This segment also includes group disability and life insurance products that were historically sold in connection with certain experience-rated medical products. <br /><br />Disability and Life includes group:<br /><br /></p><ul><li>disability insurance;<br /></li><li>disability and workers’ compensation case management;<br /></li><li>life insurance; <br /></li><li>accident; and <br /></li><li>specialty insurance. <br /></li></ul><p><br />International includes: <br /><br /></p><ul><li>life, accident and supplemental health insurance products; and <br /></li><li>international health care products and services including those offered to expatriate employees of multinational corporations. <br /></li></ul><p><br />Run-off Reinsurance includes accident, workers’ compensation, international life and health, GMDB and GMIB reinsurance businesses. The Company stopped underwriting new reinsurance business in 2000.<br /><br />The Company also reports results in two other categories.<br /><br />Other Operations consist of:<br /><br /></p><ul><li>non-leveraged and leveraged corporate-owned life insurance (COLI); <br /></li><li>deferred gains recognized from the 1998 sale of the individual life insurance and annuity business and the 2004 sale of the retirement benefits business; and<br /></li><li>run-off settlement annuity business. <br /></li></ul><p><br />Corporate reflects amounts not allocated to segments, such as interest expense on corporate debt and on uncertain tax positions, net investment income on investments not supporting segment operations, intersegment eliminations, compensation cost for stock options and certain corporate overhead expenses. <br /><br />Summarized segment financial information for the years ended December 31 was as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="383"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="383"><b>Health Care</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="383">Premiums and fees: </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="383">Medical:</td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Guaranteed cost excluding voluntary / limited benefits (1),(2)</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 3,148 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 3,504 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 3,877 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Voluntary/limited benefits</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 232 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 200 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 160 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Experience-rated (2),(3)</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,699 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,953 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,877 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Stop loss</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,274 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,197 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 589 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Dental</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 731 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 785 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 773 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Medicare </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 595 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 400 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 349 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Medicare Part D </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 342 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 327 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 326 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Other (4)</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 515 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 518 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 473 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Total medical</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 8,536 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8,884 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8,424 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Life and other non-medical</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 179 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 184 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 235 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">   Total premiums</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 8,715 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 9,068 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8,659 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Fees (2),(5)</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,669 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,597 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,007 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">     Total premiums and fees</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 11,384 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,665 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10,666 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Mail order pharmacy revenues</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,282 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,204 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 1,118 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Other revenues</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 262 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 267 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 250 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Net investment income</td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 181 </b></td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 200 </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 202 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Segment revenues</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 13,109 </b></td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,336 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,236 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="383">Income taxes</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 399 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 352 </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"> 358 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="383">Segment earnings</td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 731 </b></td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 664 </td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 679 </td></tr><tr><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="383"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="15"><i>(1) Includes guaranteed cost premiums primarily associated with open access and commercial HMO, as well as other risk-related products.</i></td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="17"><i>(2) Premiums and/or fees associated with certain specialty products are also included.</i></td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="44"><i>(3) Includes minimum premium members who have a risk profile similar to experience-rated funding arrangements. The risk portion of minimum premium revenue is reported in experience-rated medical premium whereas the self funding portion of minimum premium revenue is recorded in fees. Also includes certain non-participating cases for which special customer level reporting of experience is required.</i></td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="17"><i>(4) Other medical premiums include risk revenue for specialty products.</i></td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="30"><i>(5) Represents administrative service fees for medical members and related specialty product fees for non-medical members as well as fees related to Medicare Part D of $41 million in 2009, $69 million in 2008 and $61 million in 2007.</i></td></tr><tr><td width="665" align="left" colspan="7" style="background-color: #FFFFFF;" height="17"><i> </i></td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Disability and Life</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Premiums and fees: </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   Life</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,301 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,261 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,148 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   Disability</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,057 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,004 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 942 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   Other</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 276 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 297 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 284 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Total</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,634 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,562 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,374 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Other revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 113 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 117 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 131 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 244 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 256 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 276 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 2,991 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,935 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,781 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 109 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 109 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 92 </td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Segment earnings</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 284 </b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 273 </td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 254 </td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>International</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Premiums and fees:</td><td height="13" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="13" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   Health Care</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 884 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 856 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 845 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   Life, Accident and Health</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 998 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,014 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 955 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Total</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,882 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,870 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,800 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Other revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 22 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 18 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 7 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 69 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 79 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 77 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,973 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,967 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,884 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 70 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 104 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 96 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Equity in income of investees</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 11 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 3 </td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Segment earnings</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 183 </b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 182 </td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 176 </td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Run-off Reinsurance</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Premiums and fees and other revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> (254)</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 374 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 113 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 104 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 93 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (141)</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 478 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 106 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes (benefits)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 93 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (375)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (43)</td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Segment earnings (loss)</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 185 </b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (646)</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (11)</td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Other Operations</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Premiums and fees and other revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 176 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 184 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 190 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 407 </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 414 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 437 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 583 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 598 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 627 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 31 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 43 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 45 </td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Segment earnings</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 86 </b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 87 </td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 109 </td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Corporate</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Other revenues and eliminations</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> (58)</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (53)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (55)</td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10 </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 29 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (58)</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (43)</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (26)</td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income tax benefits</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> (91)</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (81)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (42)</td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Segment loss</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (142)</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (162)</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (97)</td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Realized investment gains (losses) from continuing operations</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Realized investment gains (losses) from continuing operations</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> (43)</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (170)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 16 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes (benefits)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> (17)</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> (60)</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 5 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Less: Realized investment gain attributable to noncontrolling interest</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Realized investment gains (losses) from continuing operations,</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">   net of taxes and noncontrolling interest</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (26)</b></td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (110)</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10 </td></tr><tr><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><b>Total</b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Premiums and fees and other revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 16,161 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 17,004 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 15,376 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Mail order pharmacy revenues</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,282 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,204 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,118 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Net investment income</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,014 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,063 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,114 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Realized investment gains (losses) from continuing operations</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (43)</b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (170)</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 16 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Total revenues</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 18,414 </b></td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19,101 </td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 17,624 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Income taxes</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 594 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 92 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 511 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Segment earnings</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,327 </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 398 </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> 1,110 </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">Realized investment gains (losses) from continuing operations,</td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="13" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="13" style="background-color: #FFFFFF;" align="left" width="446">   net of taxes and noncontrolling interest</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> (26)</b></td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (110)</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10 </td></tr><tr><td height="13" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Shareholders' income from continuing operations</td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 1,301 </b></td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 288 </td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="13" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,120 </td></tr></table><p>Premiums and fees, mail order pharmacy revenues and other revenues by product type were as follows for the years ended December 31:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2008 </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17">2007 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Medical</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 12,089 </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,337 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,276 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Disability</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,063 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 994 </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 945 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Life, Accident and Health</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 2,748 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,766 </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,619 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="446">Mail order pharmacy </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"><b> 1,282 </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,204 </td><td height="17" style="background-color: #FFFFFF;" align="left" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,118 </td></tr><tr><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Other</td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 261 </b></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 907 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 536 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="446">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"><b> 17,443 </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 18,208 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 16,494 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 23 ― Contingencies and Other Matters<br /><br />The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.<br /><br />A. 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 December 31, 2009, employers maintained assets that exceeded the benefit obligations. Benefit obligations under these arrangements were $1.7 billion as of December 31, 2009.  As of December 31, 2009, approximately 75% 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 December 31, 2009.  Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.  See Note 11 for further information on the fair value hierarchy.<br /><br />The Company does not expect that these financial guarantees will have a material effect on the Company’s consolidated results of operations, liquidity or financial condition..</p><p>B. Guaranteed Minimum Income 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 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 minimum benefit guaranteed under the contract 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.  See Note 11 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 GMIB contracts.  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 /></p><ul><li>no annuitants surrendered their accounts;<br /></li><li>all annuitants lived to elect their benefit;<br /></li><li>all annuitants elected to receive their benefit on the next available date (2010 through 2014); and<br /></li><li>all underlying mutual fund investment values remained at the December 31, 2009 value of $1.3 billion with no future returns.<br /></li></ul><p><br />The maximum potential undiscounted payments that the Company would make under those assumptions would aggregate $1.2 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.<br /></p><p>C. Certain Other Guarantees<br /><br />The Company had indemnification obligations to lenders of up to $235 million as of December 31, 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 2010 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 December 31, 2009.<br /><br />As part of the reinsurance and administrative service arrangements, the Company pays claims for the group medical and long-term disability business of Great-West Healthcare and collects related amounts due from their third-party reinsurers. Any uncollected amounts will represent additional assumed liabilities of the Company and decrease shareholders’ net income if and when these amounts are determined uncollectible. At December 31, 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 $22 million.<br /><br />As of December 31, 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 each lease.  Guarantees of $28 million expire in 2012 and $16 million expire in 2016.  The Company had additional liabilities for these guarantees of $8 million as of December 31, 2009.<br /><br />The Company had indemnification obligations as of December 31, 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 December 31, 2009.<br /><br />The Company contracts on an administrative services only (“ASO”) basis with customers who fund their own claims. The Company charges these customers administrative fees based on the expected cost of administering their self-funded programs. In some cases, the Company provides performance guarantees associated with meeting certain service related and other performance standards. If these standards are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. The Company establishes liabilities for estimated payouts associated with these guarantees. Approximately 10% of reported ASO fees were at risk for the periods reported, with actual reimbursements of generally less than 1% of reported ASO fees in 2009, 2008 and 2007. <br /><br />The Company does not expect that these certain other guarantees will have a material adverse effect on the Company’s consolidated results of operations, liquidity or financial condition.</p><p>D. 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 /></p><ul><li>additional mandated benefits or services that increase costs;<br /></li><li>legislation that would grant plan participants broader rights to sue their health plans;<br /></li><li>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 /></li><li>changes in Employee Retirement Income Security Act of 1974 (“ERISA”) regulations resulting in increased administrative burdens and costs;<br /></li><li>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 /></li><li>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 /></li><li>additional variations among state laws mandating the time periods and administrative processes for payment of health care provider claims;<br /></li><li>legislation that would exempt independent physicians from antitrust laws; and<br /></li><li>changes in federal tax laws, such as amendments that could affect the taxation of employer provided benefits.<br /></li></ul><p><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 and 49% of the segment’s earnings for year ended December 31, 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 />E. 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 FASB’s accounting guidance for uncertainty in income taxes. Further information can be found in Note 19. 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 and has recorded accruals in accordance with GAAP. 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 with prejudice five of the six counts of the complaint. 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. The appeal is fully briefed and pending and oral argument is scheduled for February 26, 2010 before the United States Court of Appeals for the Eleventh Circuit. CIGNA denies the allegations and will continue to vigorously defend itself. <br /><br />CIGNA has received insurance recoveries related to the In re Managed Care Litigation. In 2008, the Court of Common Pleas of Philadelphia County 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.<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 cooperated 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, thus 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 appealed. 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, 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. Both parties appealed the court’s decisions to the United States Court of Appeals for the Second Circuit which issued a decision on October 6, 2009 affirming the District Court’s judgment and order on all issues. On January 4, 2010, the Company and the plaintiffs filed separate petitions for a writ of certiorari to the United States Supreme Court. The implementation of the judgment is currently stayed. The Company will continue to vigorously defend itself in this case. 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 best estimate of the liabilities related to the court order. <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 contributed $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 responded to inquiries regarding the use of Ingenix data from the Illinois and Texas Attorneys General and the Departments of Insurance in Illinois, Florida, Vermont, Georgia, Pennsylvania, Connecticut, and Alaska. <br /><br />The Company was named as a defendant in seven putative nationwide class actions asserting that due to the use of data from Ingenix, Inc., the Company improperly underpaid claims, an industry-wide issue. Two actions were brought on behalf of members, (Franco v. CIGNA Corp. et al., and Chazen v. CIGNA Corp. et al.), and five actions were brought on behalf of providers, (American Medical Association et al. v. CIGNA Corp. et al., Shiring et al. v. CIGNA Corp. et al.; Higashi et al. v. CGLIC et al.; Pain Management and Surgery Center of Southeast Indiana v. CGLIC et al.; and North Peninsula Surgical Center v. Connecticut General Life Insurance Co. et al.). Six of the seven matters have been consolidated into the Franco case pending in the United States District Court for the District of New Jersey. The consolidated amended complaint, filed on August 7, 2009, asserts claims under ERISA, the RICO statute, the Sherman Antitrust Act and New Jersey state law. CIGNA filed a motion to dismiss the consolidated amended complaint on September 9, 2009, which is now fully briefed and pending. Discovery is ongoing and class certification is scheduled to be briefed in March and April of 2010. The one remaining class action that has not yet been consolidated in the Franco case is North Peninsula Surgical Center, filed on July 6, 2009, 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. The North Peninsula case was voluntarily dismissed on September 29, 2009 and re-filed in the United States District Court for the District of New Jersey on November 12, 2009. The new complaint includes ERISA and state law unfair competition claims only. The case is expected to be consolidated into the Franco case in the near future. <br /><br />On June 9, 2009, CIGNA filed motions in the United States District Court for the Southern District of Florida to enforce the In re Managed Care Litigation settlement described above by enjoining the RICO and antitrust causes of action asserted by the provider and medical association plaintiffs in the Ingenix litigation on the ground that they arose prior to and were released in the April 2004 settlement. On November 30, 2009, the Court granted the motions and ordered the provider and association plaintiffs to withdraw their RICO and antitrust claims from the Ingenix litigation by December 21, 2009. The plaintiffs filed notices of appeal with the United States Court of Appeals for the Eleventh Circuit on December 10 and 11, 2009, along with motions to stay the order pending appeal. On January 12, 2010, the United States Court of Appeals for the Eleventh Circuit stayed the order pending resolution of the appeal. <br /><br />One of the provider plaintiffs, Pain Management and Surgery Center of Southern Indiana, filed a voluntary dismissal of its claims on November 11, 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 />INDUSTRY DEVELOPMENTS AND OTHER MATTERS <br /><br />The disability industry is under continuing review by regulators and legislators with respect to its offset practices regarding Social Security Disability Insurance (“SSDI”). There has been specific inquiry as to the industry’s role in providing assistance to individuals with their applications for SSDI. The Company has received one Congressional inquiry and has responded to the information request. Also, legislation prohibiting the offset of SSDI payments against private disability insurance payments for prospectively issued policies was introduced but not enacted in the Connecticut state legislature. The Company is also involved in related pending litigation. If the industry is forced to change its offset SSDI procedures, the practices and products for the Company’s Disability and Life segment could be significantly impacted.<br /></p></div>
<div style="font-size:12pt"><p>Quarterly Financial Data (unaudited)<br /><br />        The following unaudited quarterly financial data is presented on a consolidated basis for each of the years ended December 31, 2009 and 2008. Quarterly financial results necessarily rely heavily on estimates. This and certain other factors, such as the seasonal nature of portions of the insurance business, suggest the need to exercise caution in drawing specific conclusions from quarterly consolidated results.<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="293"><i>(In millions, except per share amounts)</i></td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="20">Three Months Ended</td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="293"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="20">March 31</td><td width="113" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="20">June 30</td><td width="113" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="20">Sept. 30</td><td width="113" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="20">Dec. 31</td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="293"><b>Consolidated Results</b></td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="right" width="293"><b>2009 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="75"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="293">Total revenues</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,773 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,488 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,517 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 4,636 </b></td><td height="18" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="293">Income from continuing operations before income taxes </td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 273 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 630 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 487 </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="16" style="background-color: #FFFFFF;" align="right" width="75"><b> 508 </b></td><td height="16" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="293">Shareholders' net income </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 208 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b><i> (1)</i></b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 435 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b><i> (2)</i></b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 329 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b><i> (3)</i></b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"><b> 330 </b></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><b><i> (4)</i></b></td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">Shareholders' net income per share:</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>1 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">   Basic</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 0.76 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.59 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.20 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.20 </b></td><td height="20" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">   Diluted</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 0.76 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.58 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.19 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 1.19 </b></td><td height="20" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="right" width="293"><b>2008 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="left" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">Total revenues</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 4,569 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 4,863 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 4,852 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 4,817 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="19" style="background-color: #FFFFFF;" align="left" width="293">Income from continuing operations before income taxes </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="75"> 74 </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="75"> 413 </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="75"> 233 </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="19" style="background-color: #FFFFFF;" align="right" width="75"> (338)</td><td height="19" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="293">Shareholders' net income (loss)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 58 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><i> (5)</i></td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 272 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><i> (6)</i></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> 171 </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><i> (7)</i></td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> (209)</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"><i> (8)</i></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="293">Shareholders' net income (loss) per share:</td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">   Basic</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.21 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.97 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.62 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> (0.77)</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">   Diluted</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.20 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.96 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 0.62 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> (0.77)</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293"><b>Stock and Dividend Data</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="right" width="293"><b>2009 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">Price range of common stock — high</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 23.06 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 25.60 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 33.00 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 38.12 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">                                                  — low</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 12.68 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 16.84 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 23.10 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 26.83 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">Dividends declared per common share</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> 0.040 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"><b> - </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="right" width="293"><b>2008 </b></td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">Price range of common stock — high</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 56.98 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 44.43 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 44.13 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 34.47 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="background-color: #FFFFFF;" align="left" width="293">                                                  — low</td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 36.75 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 35.07 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 31.76 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="background-color: #FFFFFF;" align="right" width="75"> 8.00 </td><td height="20" style="background-color: #FFFFFF;" align="right" width="19"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="293">Dividends declared per common share</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 0.040 </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="20" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td></tr></table><p>(1)        The first quarter of 2009 includes an after-tax gain of $23 million for the GMIB business, an after-tax benefit of $20 million associated         with the completion of the 2005 and 2006 IRS examinations and an after-tax charge of $47 million to strengthen GMDB reserves.<br />(2)        The second quarter of 2009 includes an after-tax gain of $110 million for the GMIB business, an after-tax benefit of $30 million         associated with a pension curtailment gain, and an after-tax charge of $9 million for the cost reduction program.<br />(3)        The third quarter of 2009 includes an after-tax gain of $16 million for the GMIB business and an after-tax charge of $7 million for the         cost reduction program.<br />(4)        The fourth quarter of 2009 includes an after-tax gain of $60 million for the GMIB business and an after-tax charge of $13 million for the         cost reduction program.<br />(5)        The first quarter of 2008 includes an after-tax loss of $195 million for the GMIB business and an after-tax charge of $24 million         associated with litigation matters.<br />(6)        The second quarter of 2008 includes an after-tax benefit of $34 million for the GMIB business and an after-tax charge of $52 million         associated with litigation matters.<br />(7)        The third quarter of 2008 includes an after-tax loss of $61 million for the GMIB business.<br />(8)        The fourth quarter of 2008 includes an after-tax loss of $215 million for the GMIB business, an after-tax loss of $192 million for the         GMDB business and an after-tax charge of $35 million for the cost reduction program partially offset by an after-tax benefit of $47         million for a reduction in management incentive compensation accruals.<br /></p></div>