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In addition to generally accepted accounting principles, we use non-GAAP financial measures to evaluate our financial results. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in our press release and financial supplement.Now, I'll turn the call over to Jim. Jim Wehr Thanks, Naomi, and good morning everyone. This morning I’ll give my perspective about the quarter and what we see for Phoenix, in the near term. Looking at our operating income of $6.5 million, you can see the tax has continued to add volatility to our results, as Peter will discuss later. But if you focus on the fundamentals of our performance, the first quarter is a continuation of many of the favorable trends, we established last year. Let me walk you through a few of these trends. The investment portfolio produced sound results with continued low impairments, and improved asset evaluations. In addition, net investment income increased 6% over the fourth quarter, and is up year over year. Policy persistency remained strong after returning to more normal levels in 2011. We continue to right size our cross structure and carefully manage expenses. While we are growing our businesses, we have been holding the line in uncontrollable expenses, and believe we can get more work done here. Our mortality experience remains very good, statutory surplus grew further to $882 million, even after a $24 million dividend to the holding company. RBC improved a 371%, its worth reminding everybody that it wasn’t that long ago, that we aspired to 300% RBC, and now we are well beyond that. All these numbers say one main thing to me, and should to you, Phoenix has a very strong balance sheet, and we plan to keep it that way with sound management and a profit driven business strategy. That statement, ‘profit driven business strategy’ brings me to the trends in our growth initiatives. We’ve guided to fixed index annuity sales of 1 to 1.4 billion for the year. We are not changing that guidance though, we will likely recommend at the lower end of the range.
First quarter sales of 227 million were consistent with our 2011 run rate, but put us slightly below our target for 2012. So what happened? We continued to stick to our profitable growth strategy, with a focus on preserving solid margins and do business. Even in the phase of price competition and the potential for a dip in sales. We have demonstrated that discipline with two reprising actions since October, and while these actions were prudently aligned with lower interest rates, they almost certainly caused us some sales. However, we are still competitive and we have seen other companies modify their pricing, subsequent to our changes. Also we are adding new benefits and features in June, which should broadly appeal of our product portfolio.In short, we are confident our offerings will continue to generate strong sales that also meet our profitability targets. Saybrus also showed steady progress, with increasing profitability. In fact, its results have improved every quarter, since there was established in late 2009, and we continue to believe that the Saybrus model has a lot of potential. As a final note, we believe it’s important for our long term success that we rebuild our life portfolio to balance our growing annuity and distribution businesses. During the quarter, we launched an indexed dual product for the middle market to be sold through IMO’s. As is the case with any new product launch, results in the initial quarter were quite modest. But we have selling agreements with eight distributors, and expect sales to grow incrementally over the next several quarters. As we look towards 2013, we are currently pursuing additional product offerings and distribution relationships. In some you’re hearing a lot of the same themes today, as you’ve heard in the last several quarterly calls, solid balance sheet, good persistency expense management and profitable growth. Read the rest of this transcript for free on seekingalpha.com