LincolnNational's(LNC)CEODennisGlassonQ12015

ResultsEarningsCallTranscript
StartTime:10:00
EndTime:11:01
LincolnNationalCorporation(NYSE:LNC)
Q12015EarningsConferenceCall
April30,2015,10:00AMET
Executives
DennisR.GlassPresidentandCEO
RandalJ.FreitagCFO
ChrisGiovanniSVP,IR
Analysts
SuneetKamathUBS
RyanKruegerKeefe,Bruyette&Woods,Inc.
SethWeissBankofAmericaMerrillLynch
ThomasGallagherCreditSuisse
StevenSchwartzRaymondJames
ErikBassCitigroup
HumphreyLeeDowling&Partners
RandyBinnerFBRCapitalMarkets
EricBergRBCCapitalMarkets
Operator
Goodmorning,andthankyouforjoiningLincolnFinancialGroup'sFirstQuarter2015EarningsConferenceCall.Atthis
time,alllinesareinlistenonlymode.Later,wewillannouncetheopportunityforquestionsandinstructionswillbe
givingatthattime.[OperatorInstructions].
Atthistime,IwouldliketoturntheconferenceovertotheSeniorVicePresidentofInvestorRelations,ChrisGiovanni.
Pleasegoahead,sir.
ChrisGiovanni
Thankyou,Liz.Goodmorning,andwelcometoLincolnFinancialsfirstquarterearningscall.
Beforewebegin,Ihaveanimportantreminder.Anycommentsmadeduringthecallregardingfutureexpectations,
trendsandmarketconditionsincludingcommentsaboutsalesanddeposits,expenses,incomefromoperations,and
liquidityandcapitalresourcesareforwardlookingstatementsunderthePrivateSecuritiesLitigationReformActof
1995.Theseforwardlookingstatementsinvolverisksanduncertaintiesthatcouldcauseactualresultstodiffer
materiallyfromcurrentexpectations.Theserisksanduncertaintiesaredescribedinthecautionarystatement

disclosuresinourearningsreleaseissuedyesterdayandourreportsonforms8K,10Qand10KfiledwiththeSEC.
WeappreciateyouparticipatingtodayandinviteyoutovisitLincolnsWebsitewww.lincolnfinancial.comwhereyoucan
findourpressreleaseandstatisticalsupplement,whichincludeafullreconciliationofthenonGAAPmeasuresusedin
thecallincludingincomefromoperationsandreturnonequitytotheirmostcomparableGAAPmeasures.
SopresentingontodayscallareDennisGlass,PresidentandChiefExecutiveOfficerandRandyFreitag,Chief
FinancialOfficer.Aftertheirpreparedremarks,wewillmovetoquestionandanswerportionofthecall.
IwouldnowliketoturnthingsovertoDennis.
DennisR.Glass
Thankyou,Chris,andgoodmorning,everyone.Operatingearningspershareonceagainincreasedovertheprioryear
quarter,albeitslightlyasoperatingearningsweredownduetoelevatedmortalityinIndividualLifeandpoorGroup
Protectionresults.Weacknowledgedatthestarttotheyearwaslowerthananalystprojections,butweremain
comfortablewithourfinancialplanningandbusinesstargets.Ourconfidenceisgroundedonseveralfronts.
Firstandforemost,ourbroadanddeepdistributionfranchiseconsistentlygivesLincolnacompetitiveadvantage.This
enablesmomentumandlongtermrevenueandearningsdriverstocontinue.Wesawthisinthefirstquarterwith
positivenetflowsinallofourbusinesses,salesthatbenefitedfromvariousproductintroductionsandrefinements,
whichresultedingoodsalesgrowthasthequarterprogressedandhascontinuedinApril.Accountvaluegrowthin
everybusinesswithtotalbalancesup6%toarecord222billion.
Next,wehavearigorousapproachtoexpensemanagement.Thisquarter,weonceagainsawourexpenseratio
decreasefromtheprioryear.Also,ourbalancesheetstrengthandcapitalgenerationenablesustocomplement
organicearningswithcapitalmanagement,furtheraugmentingearningspersharegrowth.
Allofthissupportskeyshareholdermetrics,severalofwhichshowedimpressivegrowththisquarterincludingbook
valuepershare,excludingAOCI,increased9%fromtheprioryear.Therepurchaseof350millionofLincolnshares,a
postfinancialcrisishigh,anda25%yearoveryearincreaseinourcommonstockdividend.
WhileourROEwasnegativelyimpactedbytheearningsitemsInotedupfront,ourROEinaseasonallyweakquarter
andinthemidstofacontinuedturnaroundinGroupProtectionexceeded11%whichisconsistentwithreturns
generatedbyourpeersduring2014.Thatbeingsaid,weclearlyexpectourROEstorecoverandremainabovepeers.
Letmenowturntoourbusinesslines,startingwithannuities.Favorableequitymarketsandpositivenetflowsledtoa
7%increaseinouraverageaccountbalancesandanothersolidearningsquarter.Ourconsistentmarketpresence
continuestoproducequarterlysalesinthe$3billionrangeandpositivenetflows.Variableannuitydepositsof2.7billion
decreased8%fromthefirstquarteroflastyear,butweareencouragedbythesalesmomentumwesawoverthe
courseofthefirstquarter.
Toprovidesomecontext,averagedailysalesinMarchwereup15%comparedtoJanuaryandFebruaryandthis
trajectoryhascontinuedinApril.Asaresult,weexpectquarterlyannuitysalestoexceed3billioninthenextquarter,
whichshouldalsoenhancenetflows.
Weremainfocusedonpushingthepercentageofvariableannuitysalesfromproductswithoutlivingbenefitsto30%.
Thisquarter,wereached27%,upfrom19%intheprioryearperiod,makingtheseventhstraightquarterofsequential
increases.Whenfactoringintheimpactofsalesonsalescoveredbyourreinsurancetreaty,nonguaranteeproducts
comprise58%oftotalDAsales.
Ourconsistentmarketpresenceandproventrackrecordofofferingvaluablecustomersolutionsthatalsoenable
Lincolntoachievegoodreturnsandmanagedriskstillholdstruetoday.InaDAmarketplacethatremainsrational,we
areconfidentwearepositionedforgrowth.
TurningtoIndividualLife,totallifeinsurancesalesinthequarterwere153million,a6%increasefromtheprioryear
quarter.Withoneofthebroadestproductportfoliosintheindustry,wecontinuetodelivergrowthwithadiversifiedmix
ofsalesandbysellingmoreproductswithoutlongtermguarantees.
Thisquarter,nosingleproductrepresentedmorethan29%oftotalproduction,downfrom32%lastyearand62%ofour
salesdidnothavelongtermguarantees,upfrom59%intheprioryearquarter.Equallyimportant,withineachproduct
wehavedifferentfeaturesandoptionsthatenableourdistributorstoexpandconsumerreach,butalsogiveLincoln
anothertactictodiversifyrisk.AnexampleofthisisourMoneyGuardproduct,whereroughlyhalfofoursalesthis

quarterwereflexpayandtheotherhalfsinglepay.Thisreducesinterestratesensitivity.
Focusingonindividuallifeinsurance,salesdecreased2%inthequarter,however,similartomypriorcommentsaround
variableannuitysales,weareencouragedbythesalesmomentumwesawinMarchandthecarrythroughtoApril.Also
ofnote,mostproductscontributedtothismomentum.
COLIandBOLIsaleswere14millioninthequartercomparedwithjust3millionintheprioryearquarter.Ouroutlook
andappetiteforCOLIandBOLIhasnotchanged,aswewillremainopportunistic.Overall,saleshereneedtomeetthe
same12%to15%returnhurdlewetargetforourentirelifeportfolio.
Lookingforward,whilewedidseeabumpinmortality,whichRandywillspeaktolater,weexpectprofitablesales
growthin2015giventhedepthandbreadthofourdistributionrelationshipsandproductdiversitycombinedwithprudent
underwriting.
TurningtoGroupProtection,Randywilltouchonouroperatingearningslossshortly.Thelackofearningsimprovement
isdisappointing,butdoesnotchangeourexpectationsofapproachingourtargetmarginstowardtheendof2016to
2017timeframe.Wearebeginningtoseetractionontheactionswehavebeenimplementingandareencouragedby
theunderlyingpricingandclaimsmanagementtrends.Weremainfocusedontakingpricingactionsaimedatour
employerpaidbusinessesandenhancingclaimsmanagementtorestoreprofitability.
Firstquartersalesof56millionweredown13%fromthesameperiodlastyear.Ourpricingactionscontinuedtoput
downwardpressureonnewbusinessopportunities,particularlyinthe1,000plusmarket,whichhistoricallyhasbeena
morecompetitivesegmentofthemarket.Lookingforward,weseesalesgrowthremainingpressuredaswecontinueto
pushforrateincreases.
InRetirementPlanServices,earningswereimpactedbysomespreadcompressionthoughweareencouragedby
underlyingbusinessdrivers.Notably,wereturnedtopositivenetflows.Flowsof$115millionimprovedsignificantly
whenmeasuredagainstoutflowsinthefourthquarterandprioryearquarter.Positivenetflowsinthefirstquarteris
consistentwithouryearendoutlookthatcalledforpositivenetflowsforthefirsthalfof2015.
Ouroptimismandvisibilitynowextendsthroughthethirdquarter.Afewpiecestothisoutlook.First,ourpipelineis
strong.Thisshouldbenefitfirstyearsalesinthenextcoupleofquarters.Also,ourexpectationsaroundretentionremain
favorable.Weattributethistoourconstanttradedeffortonimprovingplannedsponsorandparticipantexperiences.
Weremainoptimisticinthegrowthoutlookforourretirementbusiness.Longerterm,ourcoremarketsarepoisedto
growfasterthantheindustrywhilecontinuedexpansionintosegmentslikegovernmentandsmallmarketsbodewellfor
Lincoln.
Turningtodistribution,thedepthandbreadthofourretail,wholesaleandworksiteteamscontinuestodifferentiate
Lincoln.Wecurrentlyhaveover1,400clientfacingprofessionals,up4%versustheprioryear.Thenumberof
producerssellingLincolnproductsis63,000strongand26%ofthemarecrossselling,upfromtheprioryear.
Aswehavediscussedinthepast,ourlargedistributionforceenablesourmixshifts.Forexample,ourfocusongrowing
variableannuitieswithoutguarantees.Wenowhavealmost13,000producerssellingBAswithoutguarantees,up26%
fromayearago.AtLincolnFinancialNetwork,wehad163experiencedadvisorschoosetoaffiliatewithLincolnthis
quarter,whichputsouradvisornetworkatmorethan8,300,includinga2%increaseinregisteredreps.
SpendingaminuteonInvestmentManagement,ournewmoneypurchasesof$2.8billioninthefirstquarterwere
investedatanaverageyieldof3.8%,whichwasdownfromthe4.3%inthefourthquarter,primarilydrivenbythedrop
intreasuryrates,aswellasanassetmix,whichfluctuatesfromquartertoquarter.
Wedelivereda186basispointspreadonnewmoneyovertheaverage10yeartreasury,whichisstrongandconsistent
withourhistoricalexperience.Ouryieldenhancingdebtprogramcontinuestoaddvaluetoourcoreinvestmentstrategy
andadded12basispointstonewmoneyratesinthequarter.
Incomefromalternativeinvestmentswas8millionforthequarter,whichwasbelowtheprioryearsquarteraswellas
ourhistoricalaverage.Thisresultwasdrivenbyheadwindsfromourenergyexposure,whichwebelievehasstabilized.
Beforewrappingup,IwanttobrieflydiscusstheDepartmentofLaborsfiduciarystandardsproposal.Asyouhave
heardfromothermanagementteams,thisisavoluminousandcomplexproposalandlikemostfinancialservice
companies,wearereviewingtheproposaltounderstandallofitspotentialimplications.Aswithallpertinentregulatory
matters,thereisaprocessandthedetailsareveryimportant.Wewillbeveryengaged,expressourviews,aswellas
collaboratewithvariousindustrytradegroups.

Intheend,therelikelywillbesomechange.Webelievecompanieswithscale,abroadsetofproductofferingsanda
stronganddiversedistributionfranchiseswithaprovenabilitytopivotinresponsetomarketplaceorregulatorychanges
willbebestpositionedtonavigatechanges.Clearly,weareconfidentonallthesefrontsandexpectittoonceagain
differentiateLincoln.
Inclosing,Irecognizetheyearstartedslowerthanmanyexpected.However,Idonotexpectseasonalfluctuationsin
mortalitytodefineouryear.Ourfranchiseremainsacompetitiveadvantage,whileoursalesandflowsoutlookare
strong.Bothwillenableourlongtermrevenueandearningsmomentumtocontinue.
IwillnowturnthecallovertoRandy.
RandalJ.Freitag
Thankyou,Dennis.Lastnight,wereportedincomefromoperationsof352millionor$1.35pershareforthefirst
quarter,up1%fromtheprioryear.Consistentwithfirstquarterresultsthepastfewyears[indiscernible]by30million
comparedto18millionlastyear.
Asyouknow,wedonotnormalizeformortality,asitwillfluctuatefromquartertoquarter.However,wefeltthe
deviationrelativetoourexpectationwaslargeenoughthatitshouldbementioned.
Lookingatkeyperformancemetrics,thetoplinecontinuestoshowhealthymidsingledigitgrowthwithoperating
revenueup5%forthequarter,drivenbyanotherquarterofpositivenetflowsandthebenefitoffavorableequity
markets.
Weremainfocusedonmanagingexpenses,whichagaindrovemarginexpansionasthe4%growthinG&Anetof
capitalizedexpensestrailedrevenuegrowth.Itisalsoworthnotingtheelevatedexpenses,whichIattributedto
seasonalityinthefourthquarter,didnormalize.
Bookvaluepershare,excludingAOCI,grew9%to$49.70,analltimehigh.AsDennisnoted,operatingreturnonequity
cameinat11.2%,negativelyimpactedbytheadversemortalityandpoorresultsinGroupProtection.Ourbalance
sheetremainsanimportantsourceofstrength,whichgivesussignificantfinancialflexibility.
Netincomeresultsforthequarterwerenegativelyimpactedby28millionforvariableannuitynetderivativelossesand
10millionoflosseswithinourgeneralaccount.
Now,Iwillturntosegmentresultsandstartwithannuities.Reportedearningsforthequarterwere239million,an11%
increaseoverlastyear.Operatingrevenuesincreased9%fromthefirstquarterof2014,aspositivenetflowscontinued
andwebenefitedfromfurthertailwindsinequitymarkets,whichcombineddrovea7%increaseinaverageaccount
valuesthatreached123billionattheendofthequarter.
Returnmetrics,whethermeasuredbyROAorROE,remainstrong.ROAincreasedthreebasispointsversustheprior
yearandstandsat78basispointswhileROEcameinat25%,consistentwiththefourthquarter.Wecontinuetoexpect
profitablegrowthindepositsandnetflows,whichwilladdtoourrecordassetlevelsanddrivefurtherupsidetoannuities
earnings.
InRetirementPlanServices,wereportedearningsof35million.Firstquarterrevenuegrowthwasup1%yearover
year.Accountvaluesbenefitedfrompositivenetflowsinthefirstquarteralongwithfavorableequitymarket
performance.Asaresult,accountvaluesincreasedsequentiallyandendedthequarterat55billion,up5%versusthe
prioryear.
Normalizedspreadscompressed13basispointsversustheprioryearquarter,consistentwithourexpectationsfor
spreadstodeclineby10to15basispointsannuallyintheretirementbusiness.Ourreturnonassetswas26basis
pointsforthefirstquarter,withinthe25to30basispointrangewehavediscussedinthepast.
TurningtoourLifeInsurancesegment,earningsof111millionweredownasaresultofthefluctuationsinmortality.26
millionofthequartersadversemortalityhittheLifeInsurancesegmentversus18millionintheprioryearquarter.Aswe
havediscussedinthepast,ourfocusonretainingmoremortalityexposurecombinedwiththebusinessrecapturedat
yearendshouldleadtosomeincreaseinquarterlyvolatility.
Lookingatmortalityexperienceinthecurrentquarter,andunderstandingthatwedontyethavecompleteinformation,
wedobelievetheseverewinterweatherandfluseasonlikelyplayedapartinourexperience,consistentwith
commentsmadefromothersintheindustry.Itisworthnotingthatwetypicallyhaveseenseasonallyhighmortalityin
thefirstquarteronlytoseemortalityimproveoverthecourseoftheyear.

Toprovidesomecontext,IndividualLifesfirstquarterearningsforthepastcoupleofyearshaveaveraged20%offull
yearearnings.SowhileLifesfirstquarterresultswereonceagainnegativelyimpactedbyelevatedmortality,weexpect
thatwhenviewedovermoreextendedperiodoftime,experiencewillbeinlinewithourlongertermexpectations.
Itisalsoworthmentioningthatouroutlookforthebusinesswerecapturedatyearendhasnotchanged.Notably,itwill
haveamodestnegativeimpactonIndividualLifeearningsandslightlyincreaseourquarterlyearningsvolatilitybutbe
accretivetoEPSgiventhebenefitofincrementalsharebuybacks.
Turningquicklytothelifeearningsdrivers,averageaccountvalueswereup5%withaverageinforcebaseamountup
4%,bothconsistentwithrecentperformance.Normalizedspreadscameinaround166basispoints,down5basis
pointsfromtheprioryear,onceagaininlinewithourexpectations.
GroupProtectionfellshortofexpectations,aswereportedalossfromoperationsof6millioninthefirstquarter
comparedtoagainof20millionintheprioryear.Theearningsdomasksignificantsequentialimprovementinkey
metrics.Ournonmedicallossratioimprovedfrom81%inthefourthquarteroflastyearto78%thisquarter.
Importantly,ourdisabilitylossratiodeclinednearly10percentagepointsto80[indiscernible]processandisevenlysplit
betweenthedecreaseinclaimincidentsandhigherrecoverieswithbothimprovingbyapproximately10%.These
positiveearningsdriverswereoffsetbyafewnegativeitems,includingacceleratedamortizationofDACandaportion
oftheelevatedmortalityInotedupfront.
IntermsoftheacceleratedamortizationofDAC,thiswasprimarilyduetoourextensiverepricingofpolicyrenewals.
Thisreducedearningsbyapproximately10millionwhencomparedtothefourthquarter.Withthefirstquarterour
heaviestrenewalperiod,theamortizationimpactisgreatestinthisperiod.
Lookingforward,althoughweexpectamortizationtobeupversusprioryearquarters,wedonotanticipatethe10
millionInotedforthisquartertorecurinsubsequentperiodsof2015.Bottomline,wedoexpectearningstoimprovebut
continuetocautionthattheimprovementwillnotbelinear.
BeforemovingtoQ&A,letmecommentonafewotheritemsofnote.Givenourstrongyearendcapitalpositionandthe
benefitfromthereinsurancerecapture,weacceleratedcapitalmanagementinthequarterwith350millioninbuybacks.
Wecontinuetoviewsharerepurchasesasanexcellentuseofcapitalandexpecttoexceedthe650millionweveputto
workin2014.
Returningcapitaltoshareholdersremainsapriorityandasaresult,weexpecttogototheBoardinafewweekstoask
foranincreaseinoursharerepurchaseauthorization,consistentwithourpastpractices.Statutorysurplusstandsat8.5
billionandweestimateourRBCratiowillendthequarteratapproximately515%,downfromyearendaswepaid400
millionindividendstotheholdingcompany.Holdingcompanycashendedthequarteratnearly800million.
Finally,inMarch,wecompleteda$300milliondebtoffering,theproceedswhichwillbeusedtoretirethe250millionof
debtdueinJune.Weremaincomfortablewithourleverageandcapitalstructure.
Sowrappingthingsup,earningscameupabitshorttostarttheyear,butweremainveryconfidentlookingforward.In
additiontothestrongfranchisehighlightedbyDennis,weareencouragedbyourbeliefthatelevatedmortalityinthefirst
quarterisdrivenbyseasonality,consistentwithourpastexperienceinprioryearsandthatwewillseebettermortalityin
IndividualLiferesultsovertheremainderoftheyear.
Theimprovementswesawinunderlyingdisabilitytrendsthatledtoameaningfulsequentialdecreaseinourdisability
lossratioandfinally,thestrengthofourbalancesheetandstrongcapitalgeneration,whichallowsustocontinue
activelydeployingcapital.
Withthat,letmeturnthecallovertotheoperatorforquestions.
QuestionandAnswerSession
Operator
[OperatorInstructions].OurfirstquestioncomesfromthelineofSuneetKamathwithUBS.Yourlineisnowopen.
SuneetKamath
Thanksandgoodmorning.FirstquestionontheDOLforfiduciarystandards,IappreciatethatitsstillearlydaysbutI
justwantedtogetahighlevelsense,maybefromDennis,howyouthinkthiscouldimpactyourannuitiesandRPS

business?Andthenspecificallyrelatedtoannuities,couldthismovetheindustrybacktowardsofferingmoreliving
benefitguaranteesinordertoimprovethevaluepropositionofthevariableannuity?Thanks.
DennisR.Glass
Yes,Suneet,Ithinkitiscomplicatedandthereslotyettoberevealedintermsofthefinalchangeshere.Idothink,if
youdontmind,IllrepeatwhatIsaidinmyremarksandthatisthatwebelievetherewillbesomechangebutwethink
thatLincoln,becauseofourscale,broadsetofproductofferingsandstronganddiversedistributionfranchiseswitha
provenabilitytopivotinresponsetomarketorregulatedchangeswillbeablewillthereforebeabletonavigate
throughwhatevercomesdowntheroad.
Buthavingsaidthat,letmedigalittlebitdeeperintoyourquestionandfirsttalkaboutannuities.Sooneofthebig
issues,oneoftheoverarchingissuesinthisdocumentishowagentsgetpaid,feesversuscommissions.Itsworth
notingwecurrentlyofferfeebasedproductsthatmeetthefiduciarystandardofprovidinginvestmentadvice.Asan
example,ourBAproductsarealreadysetuptobesoldasfeebasedadvisoryproductssowealreadyhavetaken
action.Wellcontinuetorespondtochanges,beitthroughlaworneedsandpreferencesfromourdistributionpartner.
Sothatsimportant.
Stickingwithannuities,wevealwaysbeenknownmoreforournonqualifiedcompetitivepositioningduetoourpatented
EyeforLifeincomefeature,specificallyVAs58%ofwhatwesellisnonqualifiedand42%arequalified,andwethink
thisisprobablyalittlebetterthantheindustryaverage.Withrespecttononlivingbenefits,wedontthinktheresgoingto
beanyreductioninthepaceofourgrowthinthatproduct.Sothatsaspecificansweronthataswell.
Andthenfinally,onRPS,theresalotofissues.Ithinkthebiggerretirementcompanieshavetouchedonthem.Ithink
ourbottomlineiswethinkthatwellbeabletorespondtochangesandwemayhavetomakesomechangesintheway
wedobusiness.Butwedontseethisasasignificanthurdleforcontinuingtogrowthatbusiness.Andletmejuststop
there.
SuneetKamath
Okay,thatshelpful.Ididwanttoaskanotheroneoncaptives.Justintermsofwhatyourehearingaroundregulatory
review,variableannuitycaptives,ifyoucanupdateusonthat.Andthenalso,maybeforRandy,ifyoucanremindus,
howyouwhatkindofassetsdoyouhaveinthecaptivelettersofcreditexposure,thosekindsofthings?Thanks.
DennisR.Glass
Yes,letmestartbyremindingallofusthatwejustfinishedwebeingtheindustryandtheregulatorsalong,
thoughtfulprocessaroundcaptiveregulationsforATripleXandTripleXandthatturnedoutprettygood,bothfroma
regulatorystandpointandfromtheperspectiveoftheindustry.So,Imkindofencouragedbythefactthatwejustwent
throughthiswiththem.
Onceagain,LincolnistakingsortofaleadingroleinthediscussionswithrespecttoVAcaptives.Onceagain,good
newsintermsoftheprocess,similartowhattheregulatorsdidonATripleX,TripleX.Theyarehiringacoupleof
outsideconsultantstobringmoreperspectiveandhelpthemastheylookatthisissue.
InthiscaseofVAcaptives,thedifficultyisthatyouhavearegulatoryregimethatismoreonabookvaluebasisandyou
haveeconomicsofthepolicymoreonthebasisoffairmarketandsortofmoreGAAPeconomics.Sothecompanies
havetochooseandwevetalkedaboutbalancesheetrisk,theyhavetochoosebetweenhedgingtoprotectyourselfor
tobuildassetstopayfutureclaims.Andthenyoucanatthesametimeprotectagainstsomepotentialswingsin,Illcall,
statutorycapitalcallsrelatedtoextremeeconomicscenarios.
SoImoptimisticthatmaybewellbeabletocraftasolutionwiththeregulatorsthatsortofmitigatesthistugandpull
betweenthateconomics.Andmaybe,thisisbeingabitoptimistic,wewontneedVAcaptivesifwecangetthatatall,if
wecangetthatproblemsolved.Sotheprocessisunderway.ImencouragedwithwhatIhearbeingsaidbythe
regulatorsandwhattheyvealreadyaccomplished,andwellseewhereitturnsout.
RandalJ.Freitag
Suneet,hi,thisisRandy.WeremainverywellpositionedfromanassetstandpointintheVAcaptive.Ibelieveatthe
endofthequarter,ourassetsexceededourhedgetargetbyroughly$1.5billion,soIthinkthatsastorythatcontinues
todifferentiateusasacompany.Soverywellpositionedfromwherewesit.
Ifyouremember,andDennissortofdescribeditinhisdiscussion,themainriskaroundthisisthedifferencethatcan

emergebetweenstatutoryliabilitiesandeconomicliabilitiesincertaineconomicenvironments.Itsreallyonlythathot
economicenvironment,whichisprimarilyabigspikeininterestrates,whichwouldcauseustouseanythingbutthe
hardassetsthatwecurrentlyusetoday.
Sowhatmakesupourcurrenthedgeassets,itsthevalueofthederivativeassetswehold,somebondsthatweholdin
there,butwerecurrentlyusingwhatyouwoulddescribeassoftassets.
SuneetKamath
Gotit.OnelastoneforDennis.Intermsofyourregulatorydiscussions,ImeanIthinkonTripleXandATripleX,the
regulatorstookaviewofsortofaprospectiveapproachtothisasopposedtoaretroactive.Isthatyoursenseinterms
ofhavinganapproachVAcaptives,orisittooearlytotellonthat?Thanks.
DennisR.Glass
Alltheconversationisaroundprospective.Ithinkifyoulookbackhistoricallyintheinsuranceindustry,theregulatory
frameworkveryseldomlydomakethingsretroactive.Clearly,inthespecificcaseofATripleX,TripleX,therewasno
retroactivitybutIwouldhopethatitwouldbeforwardlookingbutIcantsaydefinitivelyifitwillorwontbe,because
werenotthatfardowntheroad.
SuneetKamath
Okay.Thankyou.
Operator
OurnextquestioncomesfromthelineofRyanKruegerwithKBW.Yourlineisnowopen.
RyanKrueger
Thanks.Goodmorning.Onequickfollowup,Randy.Youmentionedthe1.5billionofnetassetsinthecaptives.Can
youtelluswhattheRBCimpactwouldbeifyoudidconsolidatethecaptiveatthispoint?
RandalJ.Freitag
Yes,itsnotsomethingwelookatonaregularbasisbutitcontinuestobethesamestory,whichisnonegativeimpact
onourLNL,RBCorlifeinsurancecompanyreportedRBCifweweretobringourcaptivesbackin.
RyanKrueger
Okay,gotit.ThenIwanttomovetocapitalmanagement.Inthepastyoutalkedaboutaninterestingroupbenefits
M&A.Wouldyoufeelcomfortablemakinganacquisitioninthatspacerightnowiftherightopportunitypresenteditself
giventhechallengesthatyoureworkingthroughinyourownbusiness?
DennisR.Glass
Greatquestion.Whatwevesaidinthepastwasthefollowing,andourattitudehasntchanged,whichiswedliketo
increasemorbidityearningsattherighttimeandprobablywithinacquisition.Werenotrulingoutanacquisitionnow,but
becauseofthedifficultywerehavingwithourcorebusiness,itmakesithardertogetoverthehurdleofdoingan
acquisition.Andthenfinally,quiteclearly,anythingwedointermsofacquisitionshastobemeasuredagainstother
sourcesofcapitalsuchasbuyingoursharesback.Soopenminded,butatthemomentthingswouldhavetoatthe
momenttheressomeimpediments.Notsayingthatwewouldntdosomethingbutitdbehardertodoit.
RyanKrueger
Okay.Andthenjustlastone,istheIguesswheredoyoufeellikeyoucouldbringyourRBCratiodowntoinanM&A
ifyouweretodoalargerM&Atransaction,isaround450stilltherightwaytothinkaboutwhereyoumightbeableto
bringthatto?
RandalJ.Freitag
Ryan,IthinkitsthenatureoftheM&Adealyoudo.Ifitwasagroupdeal,Ithinkthatsprobablyareasonableestimate.
Ithinkthewaywevetalkedaboutthisinthepastissortof,onourbalancesheetweprobablyhavecapacitytodo750
millionorsoofM&Awithexistingcapitalfromthebalancesheet.

DennisR.Glass
Butagain,Iwanttoreinforcethisissuethatcontinuingtofocusonsharebuybacksisahighpriorityforus.Andthat
whenwetalkaboutexcesscapital,itsdifferentastowhetheryouusethatexcesscapitalforsharebuybacksorfor
acquisitionsintermsofthesplit,becausewhenyoudoanacquisition,thecapitalstaysinthecompanywhereasshare
buybacksthecapitalgoesout.Sotheexcesscapitalcantallbeusedforsharebuybackswhereasmorbidcouldbe
usedforacquisitions.
RyanKrueger
Veryhelpful.Thankyou.
Operator
OurnextquestioncomesfromthelineofSethWeisswithBankofAmericaMerrillLynch.Yourlineisnowopen.
SethWeiss
Hi.Thankyou.Aclarificationquestiononthe$30millionadversemortalityhit.Justwanttomakesurethisisrelativeto
expectationsforaseasonallyhigher1Q.Isthatcorrect?
RandalJ.Freitag
Thatssortofrelativetoourbaselineexpectationsforafullyear.Soifyouweretolookatanaveragequarterduringthe
year,30millionwouldbewhatsoverandabovethatnumberanditsreallysortofconsistentwithwhatweve
experiencedinthepast.IfIlookattheAtoEinthefirstquarterofthisyear,itsreallynodifferentthantheAtoEforthe
firstquarterlastyear.Sowedidntseeanythingabnormalintheseasonality.Wejustcontinuetogrowandretainmore
businessandIthinkthatswhythenumberisbiggerthanlastyears.
SethWeiss
Okay.Thankyou.AndifIcanmoveontogroupandmaybealittlebitmoregranularityhere.IfIweretonormalizefor
theacceleratedamortizationandmaybeaddinacouplemillionmoreformortalityattributedthere,wegettomodest
profitabilitybutstillunder$5millionundera1%margin.Andlastquarteryouspokeaboutnewclaimsmanagement
causingsomepressureonincidentsandrecoveriesbutexpectationstoimprovethoseclaimsmanagementissues
withinthenext6to12months.Socouldyouspeakaboutwhatclaimsmanagementpressuresyoumayhavefeltthis
quarter?Andhowprogressonshoringupthoseissuesisgoing?
RandalJ.Freitag
Sure,Seth.Youremembertheoriginalissuesaroundclaimsmanagementprocessarosewhenweinstalledthenew
systeminthemiddleofnextyear,andthatcausedaveragecaseloadsperexaminertogoupandsomeofthenew
processchangesthatwentinplacereallycausedsortofabackup.Sowehadsomethingsthatweneededtofix.Aswe
said,itwouldbesomethingthatwedfixaswecameintothesecondhalfofthisyear.Wethoughtwedbewherewe
neededtobe.
Ithinkwemadesignificantimprovementinthisquarterandthatreallydrovethesignificantimprovementyousawonthe
disabilitylossratio,asImentioneditimprovenearly10points,withalotofthatimprovementdirectlyattributableI
believetosomeoftheimprovementsthatwemadeintheclaimsmanagementprocess.Westillhaveawaystogo.
Specifically,Ithinkwehavemoreworktodoonbringingaveragecaseloadsdownperexaminer.Ithinkthatsstillto
come.Butwemadealotoftheprocessimprovementsbringinginsupportforclaimsexaminers,forinstance,whether
thatsnursingsupport,whetherthatssupportatthemanageriallevel,orwhateveritis.Sowemadealotofprocessand
supportiveimprovements,butwestillhavemoretogoIthinkbeforewegettowhereweneedtobe.
SethWeiss
Okay.Thankyou.AndthenifIcouldjustdoonequickoneoncapital,absentM&A,howshouldwethinkaboutbringing
thatRBCratiodownovertime,whichat515,Ithinkisstillquitehighrelativetopeers?
RandalJ.Freitag
Yes,IthinkitsstillhighandIthinkaswevesaidinthepast,thewaywevebeendeployingcapital,weexpectitto

comedown.Therehavebeensomeitemswhichhavebeenfavorable,whetheritwastheimpactofthereinsurance
recaptureinthefourthquarterorsomefavorableexperiencewehadlastyearintheRMBSreratingprocess,for
instance.Sotherehavebeenanumberofthingsthathavebeenfavorable.Butthewayweredistributingcapital,we
continuetoexpectittocomedown10to15,10to20pointsayear,somewhereinthatrange.
SethWeiss
Okay.Thankyou.
RandalJ.Freitag
Youbet.
Operator
[OperatorInstructions].OurnextquestioncomesfromthelineofTomGallagherwithCreditSuisse.Yourlineisnow
open.
ThomasGallagher
Goodmorning.Firstquestionisjustontheadversemortalitythisquarter.Canyoucommentonwhetherorwhat
impactyousawfromtherecaptureblockthisquarter?Didthatcontributetotheweakness?Andifso,howmuch?
RandalJ.Freitag
Hi,Tom.Yes,Imeanitcontributedoveralltotheelevatedmortalityexperience.So,aswementioned,inbringinginthat
bookofbusiness,weexpectitsimilartoexperiencefortherestofourbookandwesawthat.AsImentioned,overall,
wehadanactualtoexpectedexperience.Inthisquarterthatwasverysimilartothefirstquarterof2014.Sotherewas
nobigimpactfromthat.
Doingtherecaptureincreasedtheaveragepaysizeofourpolicyandwasgoingtocreatealittlemorevolatility.Andina
quarterwhereyouhavebadexperiencethatincreasedmortalitythatincreasedvolatility,meansyouregoingtohave
moreclaims,morebadexperience,andwehadthat,the30millionversusthefirst18millionwehadlastyear.So
theresreallynodifferentiatedimpactfromtherecapturebusinesscomparedtowhatweveexperiencedinprioryears
firstquarters.
ThomasGallagher
Gotyou.So,Randy,essentiallycontributeditsfairshareasapercentofthetotalblockbutnothingbeyondthat.Isthat
afaircharacterization?
RandalJ.Freitag
Thatsaveryfaircharacterization.
ThomasGallagher
Okay.Andthenonefollowup.Dennis,thecommentyoumadeonliving,orVAsalesoutlivingbenefitguarantees.I
guessmyquestionthereis,whatpercentofthosesalesarecomingfromqualifiedsources?Isitsimilartoyouroverall
mixinthelow40%range?Andwouldyouseethosesalesaspotentiallyvulnerableorpotentiallygettingoverhauls,just
consideringthevaluepropositionthatmaybehardertoproveunderafiduciarystandardsthreshold?
DennisR.Glass
Yes.Tom,letmerepeatthequestion.Whatpercentageofournonguaranteedbusinessiscomingfromqualifiedplans?
ThomasGallagher
Thatsright.Yes.
DennisR.Glass
Yes.Theanswertothatisabout25%iscomingfromqualifiedplansand75%fromnonqualifiedplans.

ThomasGallagher
Gotyou.Anddoyouthinkthat25%,justconsideringwhatshappeninghereandunderstandingthetechnicalitiesofthe
proposalareyettobedetermined,butifyouthinkaboutthespiritofwhatsbeingproposedhere,wouldyouexpectthat
25%potentiallygoingaway?
DennisR.Glass
Tom,thatsaveryspecificquestionanditsactuallyaquestionthatisprobablymoreappropriateforthebroad
distributionorganizations.Wehavesuchdifferentalternativestosellproduct,differentdistributionsystemsand
channels,asyouknow.Wedontthinkthatthereisaseriousrisktothat25%butitmayendupcomingfromdifferent
channelsthanitscomingfromtoday.SoIfallbackonourcommentbroad,diversifieddistributionandourproven
abilitytopivot,whetheritsforcustomerpreferences,pricingissuesorregulatoryreasons.Andthatwellfindawaywith
thisdistributionorganizationtocontinuetogrowoursales.
ThomasGallagher
Okay.Thanks,Dennis.
Operator
OurnextquestioncomesfromthelineofStevenSchwartzwithRaymondJames.Yourlineisnowopen.
StevenSchwartz
Hi.Goodmorning,everybody.TofollowupalittlebitonTomsquestion.Iminterestedin,Dennis,ifyouknowwhat
percentageofyourVAsalesareinupfrontcommissionasopposedtofeebased?Letsjustputitthatwaysimplyin
todaysworld,howaretheysold?
DennisR.Glass
Imtryingtogetananswerforthat.Thevastmajorityaresoldonanupfrontcommissionbasis.
StevenSchwartz
Okay,allright.Andthen,Dennis,youtalkedalittlebitaboutsalesandhowtheypickedup
DennisR.Glass
CouldIcometobackandagainreinforcethefactofhowyoupaytheagentsisreallydeterminedbyourdistribution
channels.AndasIsaidinmypreparedremarks,wearepreparedalreadytosellthesesameVAproductsonafee
basisratherthanfrontendcommission.AndIwanttoreemphasizeanotherpoint,whichwevemadeinthepast,living
benefitproductsareanimportantpartoftheretirementplanningforAmericans,andIdontseethedemandforthat
productgoingawayeventhoughcompaniesanddistributionorganizationsmayhavetoadjustthewaytheygetittothe
consumer.
StevenSchwartz
Yes,Imeanitsagoodpoint,itsnotreallyyourissue.Youcandoit.Itsaquestionofwhetherbrokerdealersand
brokerswanttosellthatwayornotandmaybetheyllhaveto.Thatsalloutthere.ThatswhyIaskedthequestion.
DennisR.Glass
Yes.
StevenSchwartz
Thenduringyourpreparedremarks,youtalkedabouthowsalesbothinannuitiesandlifeinsurancepickedupinthe
quarterandcontinuetopickup.Ithinkyoureferencedmaybenewproductsorrevisionstoolderproducts,ifyoucould
fillthatoutplease.
DennisR.Glass
Yes.Ithinkthepickupisjustrelatedtobetterproductivity.TheresbeensomeproductchangesbutIwouldntattribute

thepickuptoanyspecificproduct.Theresnothingdramaticinthewayofproductimprovementsthatwouldhaveledto
that15%pickup.Ijustthinkwegotofftoaslowerstartandwearenowbacktowherewethinkweatlevelsofsales
thataremoreconsistentwithourexpectationsfortherestahigherlevelofsales.
StevenSchwartz
Okay.AndthelastoneforRandy,IthinkmaybeSethaskedthisquestion.Theadversemortalitythatyourepointingto
isrelativetowhatyoudexpectonaveragefortheyear,Igetthat.Butweknowthefirstquarterisalwaysgoingtohave
badweather.Weknowthefirstquarterisalwaysgoingtohavethefluseason.WevegottheChristmaseffect.Sodo
youhaveasense,Randy,ofgenerallyspeaking,whatyouwouldconsidertobeIdcallitnormaladversemortalityin
thefirstquarterrelativetoyourbaseline?
RandalJ.Freitag
Steven,obviouslyitsatoughnumberestimateifyouaskmetosortoftakeastabatit.Maybehalfofthe$30million
wassortofoverandaboveanormalseasonalfirstquarter,butputabigconfidenceintervalaroundthatnumber.
StevenSchwartz
Okay,fairenough.Thankyou,guys.
Operator
OurnextquestioncomesfromthelineofErikBasswithCitigroup.Yourlineisnowopen.
ErikBass
Hi.Thankyou.IguessfirstjustwantedtofollowuponIthinkwhatSethwasaskingonthegroupside.Haverecent
resultschangedyourviewatall?AndhowlongitwilltakegroupresultstorecoverandgetbacktoIthinkthe5%to6%
marginyouvetargetedonarunratebases,ordoyouthinkwerejustseeingmorenegativenoiserelatedtoDACand
mortalityandotherfactors?Butkindofthetimingofgettingtotheendgoalhasntchanged.
RandalJ.Freitag
Ididsayinmyremarksthatourexpectationswithrespecttogettingbacktogoodmarginshaventchanged.Itssortof
late2016,early2017.Sothathasntchanged.
ErikBass
Gotit.Andthatsonarunratebases?
RandalJ.Freitag
Right.
ErikBass
Okay.Andthenmaybecanaskoneonvariableannuities.Haveyouseenmuchimpactfromincreasedcompetitionas
otherinsurershaverolledoutbothnewguaranteefeaturesaswellasproductswithoutlivingbenefitsorisyoursense
thattheoverallindustrydemandforVAsjusttickeddownalittlebitinthefirstquarter?
DennisR.Glass
Ithinkittickeddownalittlebitinthefirstquarter,asyousay.WecontinuetohavewhatIwouldrefertoasrational
competitioninthismarketrightnow.Differentcompanieshavedifferentvaluepropositions,differentfeaturesand,at
anypointintime,youcanseeonegetaheadoftheotherforwhateverreason.Butwereastrong,consistentplayer.
Wellcontinuetogetourfairshare.Overall,ourcostandbenefitsareconsistentwithwhatothercarriersareoffering.
Andthenwehavethebenefitofthebestwholesalingforcewethinkinthecountry.So,wellcontinuetogetourfair
shareonourterms.
ErikBass
Gotit.Thankyou.

Operator
OurnextquestioncomesfromthelineofHumphreyLeewithDowlingPartners.Yourlineisnowopen.
HumphreyLee
Thankyouandgoodmorning.JustwanttofollowontheGroupProtectionintermsoftheDACamortization.Canyou
justremindus,inanygivenyearswhatisthepatternforyourrenewalcycle?Sowhatpercentageofyourbusinessin
anygivenyeargothroughtheJan1renewalcycleversustheJuly1cycle?
RandalJ.Freitag
Soletsstartoutwithyourtypicalgroupcontractisaboutathreeyearguarantee,somaybeabouta30yearbusinessis
goingthroughinanyparticularyear.Insideofthat,roughly60%orsoisinthe50%to60%isinthefirstquarterofthe
year.AndthenoursecondbiggestwouldbethethirdquarterforJulyrenewals.
HumphreyLee
Okay.AndthenhowshouldwekindofcomparetheJulyrenewaltokindoftherestofthepattern?
RandalJ.Freitag
Yes,IthinkasIsaid50%to60%thefirstquarterandthethirdquarteristhenextbiggest.But,look,thebulkofitisin
thefirstquarteroftheyearandIlljuststoprightthere.
HumphreyLee
Okay,gotit.Andthenintermsofyourretirementplanservices,Lincolnsalwaysbeenastrongplayerinthe403(b)
market.Canyoureminduswhatpercentageofyourretirementplanservicesisinthe403(b)market?
DennisR.Glass
Whatpercentageofsalesareinthe403(b)market?
HumphreyLee
Maybeanaccountvalueaswell?
DennisR.Glass
About50%.
HumphreyLee
Okay.Sobasicallythosewouldnotbeaffectedbythefiduciaryproposal,buttheremaining50%couldpotentiallybe
affected?
DennisR.Glass
Again,intheretirementbusinessandinourotherbusinesses,wethinkwecancontinuetosellthroughregulatory
changes.Andsomeoftheregulatorychangesbythewaythatarebeingproposed,wevebeenadvocatesforsome
time.So,yes,Iunderstandtheresalotofquestionsaboutit.Theresgoingtobechange.Goodcompanieswillreactto
thechange.Boththelivingbenefitproductsandretirementproductsareinbigdemandandsoitsmoreaboutthe
changesyouhavetomakeinthesellingprocess,commissionsandsoforthtobeabletomeetthedemandsofthe
marketplace,whichwillcontinuetobestrong.
HumphreyLee
Okay.Thankyou.
Operator
OurnextquestioncomesfromthelineofRandyBinnerwithFBR.Yourlineisnowopen.
RandyBinner

Hi,thanks.Mostlyaskedandanswered,soImgoingtoaskaDOLfiduciaryfollowupforDennis.Theresdifferent
piecesoftheconversationherethathavetalkedaboutkindofapotential,Icallitbifurcationofregulation,whereasifa
productisaffectedbyERISA,itwouldhaveacertainsetofrules.Andthenifitsnot,itwouldnt.Sowhetheritwas
HumphreysquestionorIthinkTomGallaghersbeforethatonqualified,nonqualified.
Iguessmyquestionforyou,Dennis,isyourperspectiveonitifthatwouldbefeasibleinthemarketthatyouwouldhave
kindofdramaticallydifferentrulesbasedonwhetheritkindofhittheERISAformatornotoriftherewouldbekindofa
lowestcommondenominatoreffectinthemarketandeveryonewouldeverythingwouldkindofmigratetowards
whateverthenewrulesarepushedbyDOL?
DennisR.Glass
Yes,Ithinkthatshardtopredict.
RandyBinner
Okay.IthoughtIdtakeatryatthat.TheoneotherfollowupIhadjustonthegrouppiecewasafterthisfirstquarter
renewal,howmuchofthebookhasbeenrepricedsinceyoustartedthelastmajorrepricinginitiative?Ithinkitwas
30%atthefourthquarter.Doyouhaveafigureofhowmuchhasbeenrepricedatthispoint?
RandalJ.Freitag
Yes.Soaswementionedearlier,30%wentthroughthepipelastyearandIthinkbytheendofthisyearwillbeatabout
80%.Aswementioned,50%to60%ofthisyearsgoesthroughinthefirstquarter.Soifyousortofdothemaththere
andapplythat,roughly50%ofthepremiumhaswentthroughthepipeline.
RandyBinner
Halfwaydone.Okay.ThatsallIhave.Thanks.
RandalJ.Freitag
Youbet.
Operator
OurnextquestioncomesfromthelineofEricBergwithRBCCapital.Yourlineisnowopen.
EricBerg
Thanksverymuch.Idliketoreturntothetwotopicsthathavesortofbeendominantinthiscall,mainlybeingthe
mortalityandthegroupinsurance.Ontheindividualside,Ijustwanttosortofsharpenmyunderstandingonceandfor
allofwhathappenedhere.Randy,yousaidthatactualtoexpectedsweresimilarthisyeartolastyear.IguesswhatId
liketoknowis,weretheybothabove100%thisyearandlastyear?
RandalJ.Freitag
No,theyrenotabove100%.Sotypicallyforayear,ouractualtoexpectedisgoingtobeinthe80s.Andwhatweve
seenoverthepastyearsinthefirstquarteristhatitsroughly10pointshigherthanthatinthefirstquarter.Andthats
whatweexperiencedagainthisyear.
EricBerg
Okay.IllhavetocirclebackbecauseIdontunderstandhowyoucouldIllcirclebacktoChrishowyoucanexpect
somethingtobebelowyourexpectations.ItdoesntIcantgetmymindaroundit.
RandalJ.Freitag
Well,Eric,letmedescribethatalittlebitmaybetoinformyou.Itsbecauseofhowwecalculateit.Soforotherbusiness
wevesoldinthelast15yearsorso,weusedtheexactpricingexpectations.Weexpecttoberoughlyinthe100%
range.Foralltheoldhistoricbusiness,weusedsortofastandardindustrytable.Andsothatnumbertypicallycomes
upsomewherebelow100.Soforeverythingthatwevesoldrecently,everythingthatwehavereallygooddataand
recordsfor,weusedtheexactpricingexperience.Andthenforalltheolderbusiness,weusemoreofanindustrytable.
Andthatswhyyouendupwiththisblendednumber,whichendsupbelow100%.

EricBerg
IfIcouldaskyounowaboutthegroupinsurance.Itsstillnotapparenttomeagain,Idliketosharpenmy
understandinghavinglistenedcloselytothelastquestionsaboutwhatisnotgoingwellhereinthefollowingsense.
YouvedescribedtheresultsascoreandIthinkRandy,youdescribedthemaspoor.Butwhatweknowisthatthere
hasbeenasignificantimprovementinincidence.Theresbeenasignificantimprovementinrecovery.Youveraised
pricessharply.ThishasledtoIguesslactation,whichinturnhastriggeredanoncashchargefortheaccelerated
amortizationofDAC.Sogivenallthat,yourelosingcustomersasyouexpected,youregettingabetterclaims
experienceasyouexpected.Whatisnothappeningthatyouwouldliketohaveseenhappenedbynow?Whereareyou
behind?
DennisR.Glass
Yes,Eric,Ithinknowweregettingintoalittlebitofsemantics.Ourcommentsimplyweredisappointedinanegative
quarterintheabsolute.Thatsnotacommentwithrespecttoexpectationsofsomeofthesethingsthatyouretalking
about.Werejustdisappointedthatwevehadalostquarter.
EricBerg
Okay.
DennisR.Glass
Andaswevesaidallalong,theprogressthatweregoingtomakehereisnotgoingtobelinear.Iapologizefor
repeatingthis.Westilltheresnothinghappenedatthisquarterthatwehaventseenexcuseme,thatchangesour
expectationsastogettingclosertoourmarginslate2016,2017.
Ithinkitsfairtosay,andIknowthatwevebeentalkingaboutpriceincreasesnowforacoupleofquarters,Ithinkits
fairtosaythatwehavegottenmuchmoreaggressiveinthelastsixmonthswithourpriceincreasesthanwedidinthe
firstsixmonths.Soitsnotthatwereseeingtheprogress,butwereevengettingbetterincreasesbutthosearent
goingtoshowupforalittlebit.
Anddontforgetthatitshardtorememberthatthesepriceincreasesaregoingtoflowinovertime.Yourenotgetting
themallatonetime.SoIunderstandthequestion.Thereisalotofvariables.Iguesswejustfallbackonweremaking
goodprogressandourexpectationsremainthesame.
EricBerg
Thatanswersmyquestion.Thankyouverymuch.
DennisR.Glass
Yes.
Operator
Ladiesandgentlemen,weareatthetopofthehour.IdliketoturnthecallbacktoChrisGiovanniforclosingremarks.
ChrisGiovanni
Thankyousomuchandthankyouallforjoiningusthismorning.Asalways,werearoundtotakeyourquestionsonthe
InvestorRelationslineat8002372920orthroughemailatinvestorrelations@lfg.com.Again,thankyouallforjoining
andhaveagreatday.
Operator
Ladiesandgentlemen,thankyouforyourparticipationintodaysconference.Thisconcludestheprogramandyoumay
nowdisconnect.Everyone,haveagreatday.
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