AGM 2011

May 25, 2011

Slides

Joe, I'm very impressed by your control. He goes like this, and everybody's quiet. Sorry, we're starting one minute late. Let me just first say good morning to all of you. My name, to those who don't know, is Jon S. Fossel. I'm chairman of the board of Unum, and I want to welcome everybody to our 2011 annual meeting of stockholders of Unum Group. This happens to be my fifth annual meeting, and I'll leave to Tom and Rick most of the good news. But from a shareholder's point of view, I'll just tell you one piece. In the last five years, Unum stock is up something like 60%, and the S&P 500 is up like 16%. I'll leave it to whoever follows me as chairman to duplicate that performance. But it's not been an easy time, obviously, from an economy's point of view, and a lot of other stresses in the financial system. But Unum has done a heck of a job, and I as a shareholder, my financial advisor reminds me it's my single biggest holding, and it maybe shouldn't be quite so big, but I'm a happy shareholder. I'll put it to you that way. I'd like to start by introducing my fellow members of the board and ask them to stand as I read their names. E. Michael Caulfield. Michael is chairman of our finance committee. Pam H. Godwin. Ron E. Goldsberry. Kevin T. Kabat. Thomas Kinser. Gloria Larson. Gloria is chairperson of our regulatory compliance committee. Pat MacMillan. Pat is chair of our human capital committee. Ed Muhl. Mike Passarella. Mike is chairman of our audit committee. Bill Ryan. Bill is chair of our governance committee. Tom Watjen, who I think you know, is our president and CEO. I had a line in here they put in if any member of the board wasn't here, I should mention that. Let me say something about this board. With one very minor exception, and it's not been an easy year, we've had a lot of meetings this year. Every board member has attended 100% of all the meetings we've had in the past 12 months. Some of them were not in easy places to get to with a lot of forewarning. We had one in New York, for example, with two days' notice. I don't know about the rest of you, but some of us have other obligations than just go to Unum board meetings, so that was quite a feat, and I congratulate my fellow directors. Okay, now I have to do sort of the formal thing. At the outset, I'd like to refer you to the rules for the annual meeting. They're printed on the backside of the agenda card that you've been provided, or if you haven't, it's there at the desk. They're intended to ensure we have an orderly meeting. In my five years, they've always been orderly. Don't wreck my record. We ask you to abide by the rules. We'll now commence with the business session of the meeting, and I will give the report of the inspectors of election. On or about April 14 of this year, the company furnished its proxy materials, including the notice of the annual meeting, proxy statement, and annual report to the shareholders of record of the company as of March 28 of 2011. As of the record date of March 28th, there were 309,658,737 shares of common stock of the company outstanding. The number of shares represented at this annual meeting in person or by proxy is 269,489,889 or 87.0% of the shares outstanding. That is quite remarkable as well. I know a lot of other companies have to struggle to get quorums for their annual meetings. We are way above that. It is apparent from the report of the inspectors of election that a quorum is present. The meeting is therefore called to order to transact the business set forth in the notice of annual meeting. I will preside over the meeting as chair, and Susan Roth, to my left, will serve as secretary of the meeting, and Beau Bishop, our general counsel, will serve as parliamentarian. Where are you, Beau? There he is. I am not quite sure what a parliamentarian does. You haven't had to do anything at these meetings, but if you have to, we know who you are. Representatives of our transfer agent, which is Computershare Investor Services, are serving as inspectors of election. The minutes of the 2010 annual meeting of shareholders will be read unless I hear a motion to dispense with the reading of those minutes from last year. Do I hear a motion? Motion. I hear lots of motions. Is there a second? Second. All in favor of dispensing with the reading of the minutes from the 2010 annual meeting, signify by saying "Aye. Aye. Any opposed? The motion is carried, and therefore, we will dispense with the reading of the minutes. We will now proceed with the business set forth in the notice of annual meeting and described in the proxy statement. Copies of the notice of the annual meeting, the proxy statement, the form of proxy, and annual report are on file in the office of the corporate secretary, if anybody would like to see them later. The items set forth in the notice and proxy statement are properly before this annual meeting of shareholders without further formalities. Please let the record reflect that at 10:06 A.M. on May 25, 2011, the polls have opened for voting on the matter set forth in the proxy statement. If you wish to vote by ballot, and that could be you didn't vote up till now, or you changed your mind and would like to change your vote. But if you would like to vote by ballot, signify by raising your hand and we will give you a ballot. Anybody? Okay. We can dispense with that. Let the record reflect, 10:07 A.M. on May 25, the polls have now closed. The first item of business is the election of Jon S. Fossel, that's me, Gloria Larson, who you met earlier, and William J. Ryan, and Tom Watjen as directors of the company. We have a term, and we need to get reelected if you think we're doing a good job. That's the first item of business. The votes tally with respect to the nominees show that each nominee received a number of four votes for their election, representing not less than 98% of the votes cast with respect to the nominees. I guess you all like the fact the stock's been up 60%. This is more than the majority of the votes cast at the meeting. Therefore, each nominee is elected to serve for a three-year term until the annual meeting of shareholders to be held in 2014 or until his or her successor is duly elected and qualified, or until his or her earlier resignation, retirement, or removal. Hope we don't have that. Second item of business is the advisory vote on executive compensation. This item is commonly known as the say-on-pay vote, which is to approve the compensation of the company's named executive officers as disclosed in the proxy statement. The report from the Inspectors of Election on voting for this item shows that of the votes entitled to be cast by shareholders represented and entitled to vote at the meeting, 96% were for the proposal, 3% were against, and 1% abstained. The proposal, in case you all don't know, is that every year the shareholders would have a right to tell us whether or not they think our pay structure is appropriate and all that kind of thing. So 96% thought that that was a good idea. The votes for the approval of this item clearly exceed the required majority. Therefore, the advisory vote on executive compensation is approved. Third item is the advisory vote on the frequency of future advisory votes on executive compensation. This item asks shareholders to indicate whether the company should conduct these future say-on-pay votes every year, every two years, or every three years. You already know that you all think we ought to do it. The question is how frequently. The company recommended every year. The report from the Inspectors of Election on the voting for this item shows that of the votes cast by shareholders represented entitled to vote at the meeting, 90% were in favor of a frequency of every year, 1% were in favor of frequency of every 2 years, and 9% were in favor of frequency of every 3 years, and nobody abstained. The frequency receiving the greatest number of votes was the one-year option. Therefore, shareholders have indicated a preference for conducting future say-on-pay votes on an annual basis. Item 4. Fourth item of business is the approval of the Unum European Holding Company Limited Savings-Related Share Option Scheme of 2011. For those of us who are Americans, we hear the word scheme, we think it's something illicit. That's a very common phrase. It's just the way they say. They talk about lorries in the U.K. instead of trucks, and scheme is just a normal way of describing when you want to do something. In any event, the report from the Inspectors of Election on the voting for this item shows that of the votes entitled to be cast by shareholders represented and entitled to vote at the meeting, 99% were for approval, 1% were against, and 0% abstained. The votes in favor clearly exceed the majority. Let me read that again. The Unum European Holding Company Limited Savings-Related Share Option Scheme of 2011 is approved. Item 5. The fifth item of business is the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for 2011. Representatives of Ernst & Young are present and prepared to answer appropriate questions. Does anybody have any questions they'd like to ask of our independent auditors? Okay. The report from the Inspectors of Election on voting for this item shows that of the votes entitled to be cast by shareholders represented entitled to vote at the annual meeting, 99% were for and 1% were against, and nobody abstained. I guess the auditors are doing a good job, and I can assure you from the directors' point of view, they do a very, very thorough and very capable job. You should be proud to have them, and I guess 99% of you are. The votes for this item clearly exceed the required majority. Therefore, the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for 2011 is ratified. At this time, in just a second, I'm going to turn the meeting over to Tom Watjen and to Rick McKenney, our Chief Financial Officer, and let them take you through a lot of things that are happening and looking forward a little bit as well. It's easy enough to be proud of the stock price, but there are reasons for that. It doesn't get there just on automatic pilot. It gets there in large part because the Unum leadership team and the staff, right down to the lowest person on the totem pole, has done a spectacularly good job during this period of strengthening the company's operation capability of growing its earnings, of making the balance sheet strong, having very little in the way of. I will probably steal a lot of their thunder, but they can repeat it because it is worth repeating. Having an investment portfolio that is very strong, very low default rates, having a dividend that has been increasing over the last bunch of years at a pretty healthy rate. I guess we are going to tell you a little more about that in a minute. But they have done a good job, and that is why the stock price has done well, not just because some stocks went up or anything else. I will let Tom and Rick fill you in on some of the details. Thank you, Jon. We will try to keep our actual comments brief, but let me add my welcome to the 2011 shareholder meeting. As Jon mentioned, I will divide the time here at the podium actually with you this morning a little bit with Rick McKenney just talking about our results. As Jon mentioned, there are good reasons actually for why I think the stock has performed well. I do want to spend a few minutes talking about some things that I think are at the heart of the ability to be successful in this environment, and frankly, even to have, I think, a brighter outlook with you look going forward. So I want to definitely get into that as I go through my comments. If you think about what was in our annual report shareholder letter this year, once again, I think we talked about the importance of staying simple, getting back to basics. I think that is frankly one of the key things that have allowed us to be successful. It is why I actually have a lot of confidence in our future. If you think about those basics, there is a few of them I think that are really at the heart of our success. It is around focusing on a few things, doing those things very well, staying close to customers and reacting as those customer needs change. It is around discipline in everything we do, whether it is financial discipline, whether it is discipline about how we make management decisions, but being a very predictable, consistent, repeatable organization that can actually show some consistency of performance. Not just financial performance, but across all elements of what we do as a business. Frankly, it's also creating a sense of an organization that wants to do the right thing. It wants to do the right thing for our customers. It wants to do the right thing for our claimants. We recognize we have obligations to regulators and rating agencies, so we have a whole series of stakeholders that we have a personal responsibility to. I want to take a couple of minutes and talk about a couple of those elements before I actually pass it over to Rick to talk about the financial foundation. Just on our company, again, everyone knows the story well. We are a very focused company. We're a market leader in all three of the businesses in which we compete in. Actually, a good starting point when we think about our company and where we're going is, actually I like the businesses we're in. We actually have very nice positions in business that have served us well in the past. As I talk about in some of my closing comments, as we think about the future, I think even pose even greater opportunities for us as we see some of the things happening in the environment and the economy and frankly, in society in general. So very nice to have these businesses, be a market leader in those businesses. Frankly, with leadership comes a sense of responsibility too, to again, do the right thing, to lead our industry and to position us frankly, not just as an industry but also as a company, obviously, to be successful going forward. As I said, I'll come back to make a few comments about that in a second. The other thing, too, that's incredibly important to, I think, behind some of our success is the value of our brand. Again, we don't talk a lot about this sometimes, but in fact, this has actually had a huge impact on our ability to be a successful organization. I will say our brand has always been well-defined by our customers. Our customers have historically given us very high scores across all of our businesses in terms of our ability to successfully, consistently meet their objectives and the things that are important to them. So even interestingly enough, in our darkest moments as an organization, we have always continued to maintain very high customer loyalty, a very high connection with our customer base. That wasn't always the case with some of our distributors, and we had to work to restore some of that faith and confidence in our company. Again, this exhibit just shows over the last four years just how that reputation with our key brokers in this particular case has actually grown. So again, we actually had a point, as we all know, some years ago where we faced some really daunting challenges, and we very methodically went about the process of actually putting those challenges behind us, and it's actually led to a lot better confidence with a very key set of constituents like the brokers. Obviously they have great faith in our company now, and that's an important part of our future growth. Probably the most important thing is actually our employees. Our employees obviously have made a huge step towards enhancing the quality of our business, the things that they do each and every day. Our shareholder employees, obviously many are here in this audience, have had a key influence on our success. This is the piece I take the greatest pride in, to see that people are engaged in the business. They take personal responsibility to do the right thing. No matter what uncertainty or what issue happens out on the horizon, we know we are going to make the right call and make the right adjustment when it has to be done. This is the piece that has not only led to our past success, but as I said when I talk about the future, I am very confident will lead to our future success because our people really want to make a difference. Speaking of responsibility, a culture of responsibility in any environment is very important, but it is especially important now when we are coming off of a financial crisis and economic downturn. Confidence in business is generally kind of low. We do not spend a lot of time trying to get awards, but it is always nice to see when outside audiences look to our company and assess how we are doing relative to others. It is not just us talking, but people on the outside talking. I will just scan through a few things that I think are great examples of just how we are perceived in the broader marketplace. These are three examples of organizations that rate both our U.K. business, our Unum US business, as well as Colonial. Across all three of these spectrums, these organizations give us incredibly high marks for service, consistency, presence in the marketplace. Again, we are recognized not just within this room here, but outside the world actually sees us in a very similar light that this company does a lot to serve the marketplace very effectively. To the employee side, the outside world also sees us as an organization that has invested very heavily in our people, giving everyone a chance to challenge themselves to be all the things that they can be in terms of making contributions to this company. That is why, again, it is very encouraging to get recognition from organizations like this, to see our workplace in the context of other companies and give us very high marks relative to those others. That is a huge competitive advantage, being able to have a workplace in an environment which encourages people to really take personal responsibility, ability to be accountable, and do the right things at times when frankly, maybe sometimes they are being questioned. So great set of results. I would also say it is nice to see just broadly in terms of reputation, the most recent example being named to Forbes' top 150 companies in terms of reputation. Again, we work at it every day. We do not do it because we want the accolade, but in fact, it is nice to get that kind of recognition from outside sources. Last but not least, as you know, we are a giving organization to our communities. The disasters here in the Spokane community were just another good example of that. Giving back is a huge part of the culture. That doesn't happen because people on this stage ask people to do it. It's because our people want to do it, actually. It's wonderful to see the giving, the consistency of commitment to the communities, even the consistency of commitment to broader causes like environmental causes. The recognition, for example, we received this past year from Newsweek as being a very green-oriented company is a very important accomplishment. Again, these are great examples. I think these are the things we don't talk a lot about. Rick is going to talk about the financial performance in a second. But when Jon talked about the reasons for success, these are as important, frankly, as delivering solid financial results, and they're also the kind of things that give me great confidence in our future. Let me turn things over to Rick just to set the stage in terms of the financial performance. Thank you, Tom. Very happy to be here to take you through some of our financial results. I think Tom did a great job of talking about who we are. I'd like to take you through about how we've been doing and use those measurements over the last couple of years and give you a sense of where we're going from here. We start out talking about our earnings per share, a common measurement that we use to express how our company is doing. If you look over the last five or six years, we've done incredibly well, 10% growth. Each of our business lines growing. If you look at our Unum UK business, our Colonial Life business, all seeing growth. Our Unum US business with some good discipline has seen that growth through that period of time as well. These are good results in any environment, but I think you have to also take the context of what has happened over that period of time, where the country here in the U.S. as well as in the U.K., has seen some of the toughest times they've seen in a while through the Great Recession that they've seen. Throughout that period of time, we've seen some very good results. As we look at these results today, you can see in the last couple of years they've slowed a bit with the slowing economy. As we look forward this year, we've put out an earnings expectation of growth between 6% and 12%. We have the ability to do so. I'll talk about how we're getting there with taking some of our capital, returning it to shareholders, but our company is seeing good, stable, consistent growth through this period of time. That's the operating model we've built to take us forward. The key underpinning of that is our investment portfolio. When you look over the last couple of years through the recession, when others in the industry and others in the world around us have seen very difficult results, you'll see default rates that we've seen well below the industry. In a world that saw 5% type defaults across the investment universe, we were less than half a percent. In 2009, a similar level as the world started to heal a little bit. You've seen in 2010 and 2011, we've seen de minimis defaults in our portfolio and have done incredibly well. I'd also show you our watch list, which is level 1 through 3 securities. This is an internal measure of those securities that we're looking at. You'd see at the peak, given some of the credit dynamics that we saw out there as well as some of the liquidity challenges in the market around us, we would have been watching roughly $700 million to $800 million of securities that had some challenges ahead of them. You've seen this heal over the last couple of years as it's come in. There's two reasons for that. One is the world has gotten better. Liquidity has returned to the markets. But also, equally as importantly, our investment team has done an incredible job of moving out of these securities ahead of the market. They've rotated out of sectors earlier than others. I think they've done a good job with active portfolio management. When we look at this watch list, it's de minimis, and I think we're doing a much better job in terms of what the rest of the industry is looking like, and I think they're doing a great job on that front. We're very proud of our investment team, the 40 roughly plus members that do it here. I also announced recently that Breege Farrell, who's in the audience today, has taken over our investment portfolio. We're very happy to have Breege on board. I'd also tip our hat to David Fussell, who ran the portfolio, and also Frank Williamson, who's here, who did a great job through the credit cycle and has put us in a very good spot. What that means for our company in terms of flexibility around the financials, because we did not see those credit losses, we've seen our portfolio get ever stronger through the credit crisis. If you look back to 2006, we ran the company about 300% RBC, risk-based capital levels, which is roughly three times what would be expected from a regulatory formulaic perspective. We've increased that to 400%. What that means in real numbers is we took what would have been a $3 billion capital position to $1 billion if it required, to $4 billion of capital to $1 billion if required, or roughly a billion dollars of excess capital that we built up through the credit cycle. This has put us in very good stead both internally to ourselves as well as the credit rating agencies have taken note of it as well. We've received upgrades from each of those agencies over the last 18 months in a world where the downgrade to upgrade ratio has been dramatically in favor of downgrades. We've done incredibly well, and it's being recognized by some external constituencies. Through that period of time, we also, as a result of being quite conservative in redeploying that capital, built up a capital position at year-end of cash position of $1.2 billion at year-end. Annually at our holding company, we used about $250 million. You're looking at a five times that coverage that we held at our holding company. In the first quarter, we started to take that down. We refinanced some debt. We brought ourselves down to a leverage ratio of just under 21%. We've started to return capital to shareholders. It's been an important part of our story going forward. When you look at this capital position, we do not take it lightly. First and foremost, we want to put that capital right back into our business, in our high returning lines, both here in the U.S., in our Colonial Life business, as well as in Unum UK, where we have excess capital, and we have had excess capital over a period of time. We'd like to acquire, we'd like to grow, we'd like to add new business lines, add new companies. Where those opportunities are not out there, and they haven't been out there for a period of time, we'll return capital to shareholders. You can see here that over the last three years, we've returned the last four years, actually, we returned $700 million in 2008. Last year, $500 million announced in the middle of the year last year, and earlier this year announced a billion-dollar share repurchase plan. We're well on our way to that. We are giving it back to shareholders because we feel very good about our capital position. There is a point in which you need to return some of that capital to shareholders. Equally as important is on the dividend side, and that's an annual give back to shareholders on a quarterly basis, paying back some of the earnings that were generated within the company. You can see over the last three years that we have an increase of 10% going back to 2009, 12% in 2010, and we're announcing this morning that we're increasing that to 13.5% increase over the course of this year. An important part of our capital that we're giving back to shareholders, that in combination with our share purchase, we think serves our shareholders extremely well. Our shareholders have also looked at that and reward us in terms of returns. You saw Jon mentioned that a little bit earlier. Even on a year-to-date basis, we're outperforming the S&P Life Index by almost 10%. Even in this short period of this year, we're doing better than the market. We don't run the company on that kind of timeframe, though. We look over the much longer term. I take you to our three-year numbers, where we're outperforming the S&P Life Index by over 30%, and then take you back as well on a five-year basis, as Jon mentioned, where we've returned 63%, and a life index that's down 7%, and an S&P 500 that's grown 17%. We think our steady, consistent earnings generation and then redeployment of capital has served our shareholders well, and it certainly is the plan that we take forward. I will turn it back to Tom to talk a little bit more about our future. Thank you, Rick. We are very pleased with the results we have had, and hopefully you are as well. I think we have actually shown that we can continue to balance the needs of a company to grow, to return capital, but also be very disciplined and be sure that we have things to make decisions that are not only serving the short term, but also serving the long term as well. As you can imagine, with those kind of results, it sets a pretty high standard as we try to think about the future. I guess, as I said in my opening remarks, I actually do believe the future is very bright for our company. There is an awful lot of challenges out there, but I want to share with you one of the things that we see as a great opportunity. As we all know, if you step back and look very broadly at the environment, you can paint a fairly dismal picture. I think the political environment is going to continue to accentuate the negatives. I want to come to how we are going to actually see some opportunity amongst that. Just look at the environment. If you look at consumers both in the U.S. and the U.K., as we exit a very severe financial crisis, a very difficult economic environment, savings rates are as low as they have ever been. People's families are, frankly, in very fragile positions. They do not have basic insurance protections for themselves and their families. Home equity is down to historically low levels. You can paint a picture for the individual, frankly, where the individual consumer, frankly, is hurting as we leave this economic environment. Second thing, as you know, our focus is primarily to work with employers and to work with their employees in the workplace. You can take a step back and look at what is happening with employers. Obviously, employers too are facing a lot of challenges to operate in this global, more competitive environment. They are also consistently looking for ways to move expenses from the employer to the employee and shift that cost burden, so to speak, to the employee. You have that dynamic going on. As I mentioned in the political environment we operate in, we obviously are going to have continual discussions about the deficit issues and how much can governments play in providing a safety net to citizens, again, both in the U.S. and the U.K., especially as we sit here today where the deficits in relationship to GDP are at the highest levels they've been since World War II. So again, we're looking at a very challenging environment. You'd say, how on earth can you stand up here and be optimistic about our future? As Rick McKenney said, we're very fortunate. We have a very solid financial foundation from which to think about our business. As I mentioned in my earlier comments, we've got some very uniquely positioned businesses in the marketplace. If you sort of look at the business as maybe some of us see it going forward, frankly, we've always known the things that we do have a very high social content to them. They really matter in helping individuals and their families. I'd actually add another element, which I think going forward, actually, the more successful our industry and our company is, it's actually going to have a big impact in terms of some of the political debate as well. Let me just kind of walk through how I see some things unfolding here, which I think are going to create some good opportunity for our industry and for our company. First and foremost, I think more than ever, people recognize after the financial crisis that they have to take more personal responsibility for their affairs. That's actually a very clear thing. I think people recognize, don't count on somebody else to do it for you. Actually take that into your own hands and find ways to actually protect yourselves and your families. Think more about savings. Think more conservatively how you manage your family balance sheet. That clearly is a dynamic that's unfolding as we speak. Second thing is, I think one of the things our research has shown very clearly is even though employers are looking to shift expenses from themselves to their employees, they still want to be part of the process. They still want to provide benefits. Even if the individual has to pay more for those benefits, they still want to be part of the process. Conversely, individuals actually enjoy getting benefits in the workplace. That's one of the few places they can sit down and know that somebody's actually thought this through for them. The employer actually provides them quality information in terms of the kinds of things they have to be thinking about, and obviously provides them low cost alternatives to actually fulfill that need. Even despite the challenges the employer is facing, it's very interesting to see that the employer still wants to play that particular role. Now think about what that means for us as a company that actually works with the employer marketplace and works obviously very extensively with individuals. That's a great opportunity for us. We do think more and more activity should happen in the workplace. We think that's probably the primary source of information and low cost financial solutions for most of consumers, both in the U.S. and the U.K. In fact, today, 80% of the disability insurance in the U.S. is actually purchased in the workplace. 70% of life insurance is purchased in the workplace, and those numbers are probably going to go up. We're in a very unique position to be part of that. The third element that is kind of interesting, too, and we will be releasing some studies here coming in mid-June, actually, that I think are going to be very powerful, which shows that the more people take personal responsibility for their own financial affairs, that actually can have a direct reduction in some of the deficit issues that are being confronted in Washington. Meaning the more people do this themselves, the less they put pressure on Social Security and some of the other federal programs. In fact, if you look at just the people who are insured in the private and disability insurance industry today, that probably saves the government about $3.5 billion a year. So again, the more we can continually find ways with government, frankly, to help facilitate using the workplace more to provide this coverage, that is a really good thing. You can expect us as a company and the industry leader to be very visible on this in Washington, and it will probably start to take a little more active role beginning in June. We are very excited about what some of those things can bring, but this is the future. We think we are in a very unique spot, so that even though those numbers are sometimes a little daunting to think, how do we repeat those? We think we feel we are very well positioned in this marketplace. It is going to require continued change at the company. Again, we feel very good about our prospects going forward. As I close, let me just say, I think, again, we feel very good about where things stand. I think we have built a track record of delivering on our commitments and our results. Again, we know that is a responsibility we have to continue to do. On the other hand, as we look forward, we continue to see some both challenges and opportunities. I can assure you, we think we have got the resources and the focus on the right things in the future to allow us to replicate some of the performance here we have seen the last five years. Frankly, with those results, we are confident we are going to be able to continue to generate good, solid value for our shareholders. Because again, the actions we take we think are good for our customers, they are good for our people, they are good for our markets. As you see now, they are good for government, and frankly, they are also good for our shareholders. It is very nice to have all those elements into our business plan, which is why, again, we feel so very good about the company today and where we are taking it in the future. John, as I close, I want to thank again our employees. They have done a Herculean effort the last four or five years to help get this company positioned, not just to deliver results this week, this quarter, or this year, but set us up very well for the future. I want to thank the board. As you mentioned, the board has been put into overtime a little bit this year. A lot of tough decisions about capital and strategy and things like that, which we have worked through very effectively. Last but not least, thank our shareholders for their patience. I think it is patience that has been rewarded, as Rick McKenney said, with good stock performance. We don't ever take that support lightly, so we look forward to continue to deliver solid results in the future. With that, let me turn things back over to you for your closing remarks and the Q&A. It's easy to be real positive and proud at a time like this. Those that know me well would tell you that I'm about the most optimistic guy on the face of the earth. Having said that, let's not forget that, A, this has not been an easy environment for anybody that we've come through. We could name a few other insurance companies that the government bailed out. We weren't there or even close. It's not an easy time at the moment. The economy is recovering slowly and in kind of fits and starts. Unemployment is way too high. Gasoline prices, every time I look, it get me, how can I not burn so much gas? The whole situation in the Middle East is uncertainty, to say the least. The lack of our confidence as voters in Congress and politically elected officials isn't real high. Personally, I think they deserve it. I don't care what party they're a part of. They just haven't done the job we elected them for. The housing market is very depressed. There are huge federal and state deficits that create problems that we got to get solved with cutting spending and/or raising taxes. There's an environment that we're looking forward that isn't kind of the most— this is a joke among my board members, most robust environment that we could think about. When you think about the future, Tom Watjen's painted the picture that's a very accurate picture in terms of the strengths that Unum Group brings to doing what we do and what we aspire to do. But don't think it's going to be perfect. We don't control what the stock market does. It's going to be up and down. I think the trend over the next two, three, four years is higher. But we don't control that. We don't control the politicians. I'd like to sometimes. But we don't control their decisions. There's some things that are just outside of our ability to influence the way we might like to. Having said that, like I said at the outset, it's hard not to be optimistic in terms of where Unum stands in a more difficult environment, an environment that candidly is probably going to get better, but it may not be tomorrow's newspaper. It may be next year's newspaper or whatever. That doesn't mean that every quarterly report of our earnings is going to be exactly perfect, that every quarter or year-to-date for the stock is going to be something we love. It's going to have fits and starts. But having said that, I can't think of, certainly in the insurance business of any kind, I can't think of a company that's better positioned to take advantage of. I used to say in my previous life, a problem is nothing but an opportunity waiting to happen. There are problems out there, and we, because of the strength of our balance sheet and our operations and our talented staff and everything else, are way better positioned than anybody else to take advantage of some of those. I think you'll see some of that as you go forward. Now, the part of the annual meeting that I enjoy is giving you all an opportunity to ask questions. I especially enjoy it because I can deflect the questions to those that know the answers, which aren't necessarily me. So why don't we start with whatever questions. We do this every time. Every time, no one raises their hand, and the reason is twofold. One, nobody wants to be first, and second, I've said this before at annual meetings, anybody who has a question thinks that it might be perceived by somebody as a stupid question. There are no stupid questions. There are only stupid answers. So somebody has to be first. No. Okay, I'll ask a question. We're now strong in the U.S., we're strong in the U.K. Do we intend to expand outside of the U.K. and the U.S. over the next 5 years? That's a question for Tom. Well, I think as we've shared actually pretty consistent message here, which is first and foremost, we want to grow with the markets we have right now. We see tremendous growth in those markets. I think Rick alluded to the fact that we're fortunate enough to have excess capital, and so before we even think about dividend increases and share buybacks, our first priority is to put the capital to work to take advantage of the opportunities we see in our present markets. Having said that, I think in general, we've always been willing to look for acquisitions that actually fit nicely with the things that we do, actually. I think that will continue to be a piece of our value equation for shareholders. It's both operational enhancements, it's capital management, and if we see acquisitions that make sense for our business, we'll certainly look at those, including international acquisitions, if that makes sense, Jon. But, you think back to my earlier comments, the operative word is discipline. We are very cautious as we think about those kind of things. They've got to be things that are manageable and that fit with the things we think we can bring value to. So the answer is yes on international, but it starts with a bigger picture, which says, we really are first and foremost just trying to take the things that we run today to make them better. But there's an awful lot of acquisitions out there, and I think Rick and the team look at a lot of them, but we also obviously decline a lot of them. Okay. The first question's been asked, so somebody can go second. I know a lot of you're not as shy as you're acting. If there aren't any other questions, do I have, Madam Secretary or anybody else, any other business I'm supposed to do? I'll give you one more chance. It's a rare occasion. You get the entire board of directors, you get Tom Watjen and Rick McKenney and the entire management team in one place to ask questions. How about the retired members of the senior management team? Do you have any questions, Bob? I'm a little scared. All right, well, if there seriously aren't any, we'll hang around for a couple of minutes, and if you want to pin any of us down one-on-one, we'll be here to do so. Let me thank all of you again, as shareholders, as employees, as other interested parties, for your confidence in the job that we all collectively have done, and I will declare the annual meeting adjourned. Thank you all very much.