Mike Bell: In terms of the Great-West membership you are exactly right. There are some classification issues in terms of what we count as members versus what Great-West has historically counted as members. Based on our membership definition which has been consistent for several years now we are including a number of PPA members that are either in PPAs at Great-West, now CIGNA owns as well as PPA members that are accessing that medical network. Based on that definition we were able to count 250,000 or so members that are in those arrangements that is why we are reporting 1.76 million members. In terms of the payables, at June 30, Great-West reserves on a net basis were $67 million of the overall balance of $827 million.
Joshua Raskin (Lehman Brothers): Are there any Systems conversions planned for Great-West?
David Cordani: When we talked about the Great-West acquisition we suggested that one of the real attractive parts for us was to secure their infrastructure and build on that. The way I would ask you to think about the systems conversions for the market facing systems and tools, claim payment and market support those systems for the select segment and the core Great-West members will stay in place. Great-West was in the process and will continue that process of enhancing those systems and moving to an upgraded platform from a market standpoint. We will build on those systems and will note convert that business in mass to CIGNA systems. Behind the scenes as you might expect there is some infrastructural support for data centers, etc. which we had planned for but the most important message is the service proposition to the individual member, the employer, and the physicians will stay off their very strong systems today.
Joshua Raskin (Lehman Brothers): Are you expecting more attrition in 2009 on the Great-West book as well?
Mike Bell: At this point we have not communicated specific membership projections for 2009. It is fair to say that imbedded in our current earnings range for 2009 is some additional downward pressure on membership but we do expect by year end 2009 to be able to stabilize that book particularly given the access to the improved medical cost position.
John Rex (JP Morgan): Could you size the impact of the higher level of catastrophic claims you saw in the quarter and also the negative development that was rolling through from first quarter on medical costs?
Mike Bell: In terms of quantifying this for the first six months of the year we saw catastrophic claims including catastrophic claims related to what we believe is the flu in first quarter of approximately 50 basis points. Most of that is centered in first quarter and you are right in terms of your assertion the first quarter did emerge worse than we had expected that has picked up in the second quarter reported results. It would be 50 basis points all together. In terms of specifics underneath that we did see an increase in the acuity of claims and just overall higher inpatient costs. Interestingly that has been centered in the guaranteed cost book, we did not see a material change in either the ASO or the experience rated book in the first half of the year as it relates to catastrophic claims. Therefore we do not believe this is a widespread phenomenon, our guaranteed cost experience tends to be concentrated in some under 50 accounts as well as a couple of selected geographies. I would not characterize it as an overall issue here. The final point I would make is that remember the medical cost trend for guaranteed costs for the first six months of the year has been 7.1% versus the comparable period in 2007. For full year what is modeled is medical cost trend for the full year guaranteed cost book of 7% to 7.5%. We are not talking about an overall seat change in terms of trend.
John Rex (JP Morgan): Your guidance on the transaction costs was $45 to $50 million before. How much was born in the second quarter because the assumption was that the vast majority of that would be born in it?
Mike Bell: That is correct. The update, we refer to it internally as integration expense. They tend to be integration and transition costs because they are incremental expenses that we do not think will be part of our expense base for the long term. Our current estimate for that for 2008 is $50 million after tax. At the upper end of the previous range the main delta there is higher IT costs. We have got a higher data center migration costs including higher labor costs. We are also likely to incur some upgraded software costs not to do with the major change in customer facing systems or anything but behind the scenes costs. That is the reason we are now at the upper end of that range for 2008.
John Rex (JP Morgan): How much was born in the second quarter?
Mike Bell: The rest was born in the second quarter that we had anticipated it was just a shade more than a third of that $50 million. We do expect third quarter to be modestly higher and then fourth quarter to be modestly lower.
David Cordani: The somewhat higher transitional costs are on technology in 2008 we expect also to see some higher transitional costs in technology in 2009 and that is one of the primary items that affects the earnings range that you reference before and our focus here is to ensure that we are doing everything that is prudent to make sure we have no disruption or minimal disruption as possible for the benefit of the customers.
Gregory Nersessian (Credit Suisse): Why the catastrophic claims do not impact your stop loss results?
Mike Bell: Overall it is the same point that we talked about earlier. We do not see it as a widespread phenomenon in terms of increased acuity in terms of inpatient claims. We did see it specifically in the guaranteed cost block which again is a relatively small part of our overall membership block. It was concentrated in a couple of specific geographies, concentrated in the under 50 group business. I think it is a combination of volatility we are also anti-selection particularly with the under 50 book. We do not see any evidence that it has spread at this point to the more stable ASO in experience books at this point. We would have seen that as higher stop loss claims on both ASO and ER if in fact that had spread to those books.
Gregory Nersessian (Credit Suisse): Is there any concern on the guaranteed cost book where you are raising rates ahead of trend that if there is anti-selection those rate actions are only going exacerbate the problem and you are going to lose more of your good risk?
Mike Bell: In the under 50 book in certain states that require community rates or specific filed rates that do not vary group to group there is that risk. Remember, the 50 block is a small proportion even of our overall guarantee cost block. We have less than 100,000 members in that book. We are re-underwriting that book market to market and certainly are cognizant of the point you are making.
David Cordani: Two points, one is the risk always exists but you should anticipate that we are going to pass a blanket rate increase across the book of business other than when we are dealing with the under 50. Secondly, as we look at our July result it would suggest that the loss ratios on the business we are retaining versus the loss ratios on the business that we are losing are in the direction we expect. The loss ratios are higher on the business we are losing then on the business we are retaining which would suggest we are retaining the better risks and differentiating our pricing strategy.
Gregory Nersessian (Credit Suisse): What is available for repurchase?
Mike Bell: We ended second quarter with $100 million of parent company cash. We expect subsidiary dividends in the second half of the year between $200 and $250 million. We also repurchased $44 million in July that you need to take out of the roll forward. What that says if we use the mid-point for example that would say if we did no further repurchase, no M&A over the remainder of the year we would expect to end the year at $280 million of parent company cash. Our policy is to be non-committal in terms of share repurchase but you can conclude from my prepared remarks that we would expect to end the year in terms of parent company cash balance somewhere between the $100 million that we had at June 30, and our long term target which we would expect to gradually get to at year end 2009 $250 million. That would be a good way to think about the ranging.
Scott Fidel (Deutsche Bank): What are you expecting for medical costs in 2009?
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