Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 6—Shareholders’ Equity Preferred Stock The Company has five million shares of authorized preferred stock, none of which is issued or outstanding.
Under the terms of the Company’s Restated Articles of Incorporation, the Board of Directors is authorized to determine or alter the rights, preferences, privileges and restrictions of the Company’s authorized but unissued shares of preferred stock.
CEO Restricted Stock Award On March 19, 2003, the Company’s Board of Directors granted 10 million shares of restricted stock to the Company’s CEO that vested on March 19, 2006.
The amount of the restricted stock award expensed by the Company was based on the closing market price of the Company’s common stock on the date of grant and was amortized ratably on a straight-line basis over the three-year requisite service period.
Upon vesting during 2006, the 10 million shares of restricted stock had a fair value of $646.6 million and had grant-date fair value of $7.48 per share.
The restricted stock award was net-share settled such that the Company withheld shares with value equivalent to the CEO’s minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities.
The total shares withheld of 4.6 million were based on the value of the restricted stock award on the vesting date as determined by the Company’s closing stock price of $64.66.
The remaining shares net of those withheld were delivered to the Company’s CEO.
Total payments for the CEO’s tax obligations to the taxing authorities was $296 million in 2006 and are reflected as a financing activity within the Consolidated Statements of Cash Flows.
The net-share settlement had the effect of share repurchases by the Company as it reduced and retired the number of shares outstanding and did not represent an expense to the Company.
The Company’s CEO has no remaining shares of restricted stock.
For the year ended September 30, 2006, compensation expense related to restricted stock was $4.6 million.
Comprehensive Income Comprehensive income consists of two components, net income and other comprehensive income.
Other comprehensive income refers to revenue, expenses, gains, and losses that under U. S.  generally accepted accounting principles are recorded as an element of shareholders’ equity but are excluded from net income.
The Company’s other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U. S.  dollar as their functional currency, unrealized gains and losses on marketable securities categorized as availablefor-sale, and net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges.
The following table summarizes the components of accumulated other comprehensive income, net of taxes, as of the three fiscal years ended September 27, 2008 (in millions):
## Table 0 ##
The change in fair value of available-for-sale securities included in other comprehensive income was $(63) million, $(7) million, and $4 million, net of taxes in 2008, 2007, and 2006, respectively.
The tax effect related to the change in unrealized gain/loss on available-for-sale securities was $42 million, $4 million, and $(2) million for 2008, 2007, and 2006, respectively.
Principal Financial Group, Inc.  Notes to Consolidated Financial Statements — (continued) 13.
Income Taxes — (continued) Net deferred tax income taxes by jurisdiction are as follows:
## Table 1 ##
In management’s judgment, the total deferred income tax asset is more likely than not to be realized.
Included in the deferred income tax asset is the expected income tax benefit attributable to net unrealized losses on available-for-sale securities.
There is no valuation allowance provided for the deferred tax asset attributable to unrealized losses on available-for-sale securities.
Management expects to recover the unrealized losses by holding the securities until maturity or recovery in value; therefore, the related deferred tax asset is expected to reverse over time.
The total deferred income tax asset also includes capital and net operating loss carryforwards for tax purposes available to offset future capital gains and taxable income, respectively.
The capital loss carryforward was $110.0 million as of December 31, 2008 and will expire if unused by 2013.
Domestic state net operating loss carryforwards were $231.6 million as of December 31, 2008, and will expire between 2009 and 2023.
Foreign net operating loss carryforwards generated in various foreign countries were $55.9 million as of December 31, 2008, with some operating loss carryforwards scheduled to expire beginning in 2014 while others never expire.
We maintain valuation allowances by jurisdiction against the deferred income tax assets related to certain of these carryforwards, as utilization of these income tax benefits fail the more likely than not criteria in certain jurisdictions.
A valuation allowance has been recorded on income tax benefits associated with state net operating loss carryforwards and foreign net operating loss carryforwards.
Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of the deferred income tax asset that is more likely than not to be realized.
Accumulated net operating losses of $376.6 million and $263.8 million at December 31, 2008 and 2007, respectively, are attributed to captive reinsurance companies that are temporarily excluded from our consolidated U. S.  federal income tax return.
These net operating losses will expire between 2021 and 2023.
One of the captive reinsurance companies will be able to join the consolidated U. S.  federal income tax return in 2012 with the other in 2013.
All accumulated net operating losses are anticipated to be utilized before expiration.
Therefore, no valuation allowance has been provided for the deferred income tax assets attributable to these net operating losses.
U. S.  federal and state deferred income taxes have not been provided on approximately $369.2 million of accumulated but undistributed earnings from operations of foreign subsidiaries at December 31, 2008.
Such earnings are considered to be indefinitely reinvested in the business.
It is not practical to determine the amount of the unrecognized deferred tax liability that would arise if these earnings were remitted due to foreign tax credits and exclusions that may become available at the time of remittance.
A tax liability will be recognized when we no longer plan to indefinitely reinvest the earnings or when we plan to sell all or a portion of our ownership interest.
The Internal Revenue Service (‘‘IRS’’) has completed examination of our consolidated federal income tax returns for years prior to 2004.
The examination of tax returns for the years 2002 and 2003 resulted in a refund of $176.7 million (including interest) in December 2006, which was consistent with the receivable that we had established for these tax years.
We are contesting other issues and have filed suit in the Court of Federal Claims, requesting refunds for the years 1995 - 2003.
At December 31, 2008 and 2007, respectively, our accrual for current tax receivable included $226.2 million and $251.5 million associated with the requested refunds, as it is management’s assessment the refunds will more likely than not be realized.
These current tax receivables are included in other assets in the consolidated statements of financial position.
We do not expect the litigation to be resolved within the next twelve months.
The IRS commenced examination of the U. S.  consolidated federal income tax returns for 2004 - 2005 in March 2007.
The fieldwork is substantially complete and the final report is expected to be received sometime in the third or fourth
Principal Financial Group, Inc.  Notes to Consolidated Financial Statements — (continued) 19.
Segment Information — (continued) The U. S.  Asset Accumulation segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals.
The Global Asset Management segment provides asset management services to our asset accumulation business, our life and health insurance operations, the Corporate segment and third-party clients.
The International Asset Management and Accumulation segment consists of Principal International, which has operations in Brazil, Chile, China, Hong Kong Special Administrative Region, India, Indonesia, Malaysia, Mexico and Singapore.
We focus on countries with large middle classes, favorable demographics and growing long-term savings with defined contribution markets.
We entered these countries through acquisitions, start-up operations and joint ventures.
The Life and Health insurance segment provides individual life insurance, group health insurance and specialty benefits, which consists of group dental and vision insurance, individual and group disability insurance and group life insurance, throughout the United States.
The Corporate segment manages the assets representing capital that has not been allocated to any other segment.
Financial results of the Corporate segment primarily reflect our financing activities (including interest expense), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other after-tax adjustments not allocated to the segments based on the nature of such items.
Management uses segment operating earnings in goal setting, as a basis for determining employee compensation and in evaluating performance on a basis comparable to that used by securities analysts.
We determine segment operating earnings by adjusting U. S.  GAAP net income for net realized capital gains (losses), as adjusted, and other after-tax adjustments which management believes are not indicative of overall operating trends.
Net realized capital gains (losses), as adjusted, are net of income taxes, related changes in the amortization pattern of DPAC and sales inducements, recognition of deferred front-end fee revenues for sales charges on retirement products and services, net realized capital gains and losses distributed, minority interest capital gains and losses and certain market value adjustments to fee revenues.
Net realized capital gains (losses), as adjusted, exclude periodic settlements and accruals on non-hedge derivative instruments and exclude certain market value adjustments of embedded derivatives.
Segment operating revenues exclude net realized capital gains (losses) (except periodic settlements and accruals on non-hedge derivatives), including their impact on recognition of front-end fee revenues and certain market value adjustments to fee revenues and revenue from our terminated commercial mortgage securities issuance operation.
Segment operating revenues include operating revenues from real estate properties that qualify for discontinued operations.
While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of segment operating earnings enhances the understanding of our results of operations by highlighting earnings attributable to the normal, ongoing operations of the business.
The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of income tax allocation.
The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law.
The segments are allocated tax adjustments consistent with the positions we took on tax returns.
The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes.
The following tables summarize selected financial information by segment and reconcile segment totals to those reported in the consolidated financial statements:
## Table 2 ##
Principal Financial Group, Inc.  Notes to Consolidated Financial Statements — (continued) 20.
Stock-Based Compensation Plans — (continued) The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date.
The weighted-average grant-date fair value of restricted stock units granted during 2008, 2007 and 2006 was $57.76, $61.38 and $50.42, respectively.
As of December 31, 2008, there were $30.3 million of total unrecognized compensation costs related to nonvested restricted stock unit awards granted under these plans.
The cost is expected to be recognized over a weighted-average period of approximately 2.0 years.
The actual tax benefits realized for the tax deductions for restricted stock unit payouts under these share-based payment arrangements for 2008, 2007 and 2006 was $6.2 million, $6.5 million and $5.4 million, respectively.
Employee Stock Purchase Plan Under our Employee Stock Purchase Plan, participating employees had the opportunity to purchase shares of our common stock on a quarterly basis through 2008.
Beginning in 2009, participating employees have the opportunity to purchase shares of our common stock on a semi-annual basis.
Employees may purchase up to $25,000 worth of company stock each year.
Employees may purchase shares of our common stock at a price equal to 85% of the shares’ fair market value as of the beginning or end of the purchase period, whichever is lower.
Under the Employee Stock Purchase Plan, employees purchased 0.8 million, 0.6 million and 0.7 million shares during 2008, 2007, and 2006, respectively.
We recognize compensation expense for the fair value of the discount granted to employees participating in the employee stock purchase plan in the period of grant.
Shares of the Employee Stock Purchase Plan are treated as an equity award.
The weighted-average fair value of the discount on the stock purchased was $6.56, $10.45 and $10.39 during 2008, 2007 and 2006, respectively.
The total intrinsic value of the Employee Stock Purchase Plan shares settled was $5.1 million, $6.5 million and $6.9 million during 2008, 2007 and 2006, respectively.
Cash received from shares issued under these share-based payment arrangements for 2008, 2007 and 2006 was $28.8 million, $31.7 million and $28.5 million, respectively.
The actual tax benefits realized for the tax deductions for the settlement of the share-based payment arrangements for 2008, 2007 and 2006 was $0.7 million, $1.0 million and $0.8 million, respectively.
The maximum number of shares of common stock that we may issue under the Employee Stock Purchase Plan is 2% of the number of shares outstanding immediately following the completion of our initial public offering.
As of December 31, 2008, a total of 1.9 million of new shares are available to be made issuable by us for this plan.
Long-Term Performance Plan We also maintain the Long-Term Performance Plan, which provides the opportunity for eligible executives to receive additional awards if specified minimum corporate performance objectives are achieved over a three-year period.
This plan utilizes stock as an option for payment and is treated as a liability award during vesting and a liability award or equity award subsequent to vesting, based on the participant payment election.
Effective with stockholder approval of the 2005 Stock Incentive Plan, no further grants will be made under the Long-Term Performance Plan, and any future awards paid under the Long-Term Performance Plan will be issued under the 2005 Stock Incentive Plan.
As of December 31, 2005, all awards under this plan were fully vested and no awards were granted under this plan in 2008, 2007 and 2006.
There is no maximum contractual term on these awards.
The fair value of Long-Term Performance Plan liability units is determined as of each reporting period based on the Black-Scholes option pricing model that uses the assumptions noted in the following table:
## Table 3 ##
The amount of cash used to settle Long-Term Performance Plan units granted was $2.7 million, $2.9 million and $10.8 million for 2008, 2007 and 2006, respectively.
The total intrinsic value of Long-Term Performance Plan units settled was $4.3 million, $3.0 million and $11.2 million during 2008, 2007 and 2006, respectively.
of each pricing category, the valuation of an individual security within each pricing category may actually be impacted by company specific factors.
Certain market events that could impact the valuation of securities include issuer credit ratings, business climate, management changes, litigation and government actions, among others.
Internal models specific to the asset class may also be used.
Prices are then reviewed by pricing analysts for reasonableness based on asset class given observable market data.
In addition, investment analysts who are familiar with specific securities review prices for reasonableness through direct interaction with external sources, recent trade activity or internal models.
Monthly, all bonds placed on the ‘‘watch list’’ are analyzed by investment analysts or analysts that focus on troubled securities (‘‘Workout Group’’).
This group then meets with the Chief Investment Officer and the Portfolio Managers to determine reasonableness of prices.
The valuation of impaired bonds for which there is no quoted price is typically based on the present value of the future cash flows expected to be received.
Although we believe these values reasonably reflect the fair value of those securities, the key assumptions about risk premiums, performance of underlying collateral (if any) and other market factors involve qualitative inputs.
The Securities Valuation Office (‘‘SVO’’) of the NAIC evaluates the bond investments of insurers for regulatory reporting purposes and assigns securities to one of six investment categories.
The NAIC designations closely mirror the NRSROs’ credit ratings for marketable bonds.
NAIC designations 1 and 2 include bonds considered investment grade by such rating organizations.
Bonds are considered investment grade when rated ‘‘Baa3’’ or higher by Moody’s, or ‘‘BBB-’’ or higher by Standard & Poor’s.
NAIC designations 3 through 6 are referred to as below investment grade.
Bonds are considered below investment grade when rated ‘‘Ba1’’ or lower by Moody’s, or ‘‘BB+’’ or lower by Standard & Poor’s.
As of December 31, 2008, the percentage, based on fair value, of total publicly traded and privately placed fixed maturity securities that were investment grade with an NAIC designation 1 or 2 was 95%.
The following table presents our total fixed maturity securities by NAIC designation and the equivalent ratings of the NRSROs as of December 31, 2008 and 2007, as well as the percentage, based on fair value, that each designation comprises:
## Table 4 ##
Fixed maturity securities include 16 securities with an amortized cost of $135.1 million, gross gains of $2.3 million, gross losses of $7.4 million and a carrying amount of $130.0 million as of December 31, 2008, that are still pending a review and assignment of a rating by the SVO.
Due to the timing of when fixed maturity securities are purchased, legal documents are filed and the review by the SVO is completed, there will always be securities in our portfolio that are unrated over a reporting period.
In these instances, an equivalent rating is assigned based on our fixed income analyst’s assessment.
Commercial Mortgage-Backed Securities and Home Equity Asset-Backed Securities Portfolios.
As of December 31, 2008, based on amortized cost, 89% of our CMBS portfolio had ratings of A or higher and 60% was issued in 2005 or before and 78% of our ABS home equity portfolio had ratings of A or higher and 85% was issued in 2005 or before.
The following table presents credit quality and year of issuance (‘‘vintage’’) for our CMBS: December 31, 2008 D
## Table 5 ##
(1) As of December 31, 2008, 56% of the 2006 vintage are rated AAA and 12% are rated AA, and 63% of the 2007 vintage are rated AAA and 18% are rated AA.

<table><tr><td></td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Unrealized losses on available-for-sale securities</td><td>$-70</td><td>$-7</td><td>$—</td></tr><tr><td>Unrealized gains on derivative instruments</td><td>19</td><td>—</td><td>3</td></tr><tr><td>Cumulative foreign currency translation</td><td>59</td><td>70</td><td>19</td></tr><tr><td>Accumulated other comprehensive income</td><td>$8</td><td>$63</td><td>$22</td></tr></table>
<table><tr><td></td><td colspan="2">December 31,</td></tr><tr><td></td><td>2008</td><td>2007</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>Deferred income tax assets:</td><td></td><td></td></tr><tr><td>U.S.</td><td>$2,372.2</td><td>$—</td></tr><tr><td>State</td><td>2.8</td><td>—</td></tr><tr><td>International</td><td>10.5</td><td>6.5</td></tr><tr><td>Net deferred income tax assets</td><td>2,385.5</td><td>6.5</td></tr><tr><td>Deferred income tax liabilities:</td><td></td><td></td></tr><tr><td>U.S.</td><td>—</td><td>-379.8</td></tr><tr><td>State</td><td>—</td><td>-14.4</td></tr><tr><td>International</td><td>-102.8</td><td>-182.1</td></tr><tr><td>Net deferred income tax liabilities</td><td>-102.8</td><td>-576.3</td></tr><tr><td>Total net deferred income tax assets (liabilities)</td><td>$2,282.7</td><td>$-569.8</td></tr></table>
<table><tr><td> </td><td colspan="2"> December 31,</td></tr><tr><td> </td><td> 2008</td><td> 2007</td></tr><tr><td> </td><td colspan="2"><i>(in millions)</i> </td></tr><tr><td> Assets:</td><td></td><td></td></tr><tr><td>U.S. Asset Accumulation</td><td>$100,468.8</td><td>$126,131.1</td></tr><tr><td>Global Asset Management</td><td>1,320.6</td><td>1,438.9</td></tr><tr><td>International Asset Management and Accumulation</td><td>7,878.4</td><td>9,350.5</td></tr><tr><td>Life and Health Insurance</td><td>14,526.2</td><td>14,816.6</td></tr><tr><td>Corporate</td><td>3,988.4</td><td>2,783.1</td></tr><tr><td>Total consolidated assets</td><td>$128,182.4</td><td>$154,520.2</td></tr></table>
<table><tr><td> </td><td colspan="3"> For the year ended December 31,</td></tr><tr><td> Long-Term Performance Plan</td><td>2008</td><td>2007</td><td> 2006</td></tr><tr><td>Expected volatility</td><td>104.1%</td><td>25.2%</td><td>11.2%</td></tr><tr><td>Expected term (in years)</td><td>1</td><td>2</td><td>2</td></tr><tr><td>Risk-free interest rate</td><td>0.5%</td><td>3.2%</td><td>4.8%</td></tr><tr><td>Dividend yield</td><td>—%</td><td>—%</td><td>—%</td></tr></table>
<table><tr><td> </td><td> </td><td colspan="3">December 31, 2008</td><td colspan="3"> December 31, 2007</td></tr><tr><td> NAIC rating</td><td> Rating agency equivalent</td><td> Amortized cost</td><td> Carrying amount</td><td>% of total carrying amount</td><td> Amortized cost</td><td> Carrying amount</td><td> % of total carrying amount</td></tr><tr><td> </td><td> </td><td colspan="6"><i>($ in millions)</i> </td></tr><tr><td>1</td><td>Aaa/Aa/A</td><td>$25,981.0</td><td>$22,116.9</td><td>57%</td><td>$25,635.0</td><td>$25,644.1</td><td>57%</td></tr><tr><td>2</td><td>Baa</td><td>17,669.2</td><td>14,675.2</td><td>38</td><td>16,661.8</td><td>16,742.0</td><td>38</td></tr><tr><td>3</td><td>Ba</td><td>2,469.8</td><td>1,760.6</td><td>5</td><td>1,904.7</td><td>1,872.0</td><td>4</td></tr><tr><td>4</td><td>B</td><td>254.2</td><td>163.9</td><td>—</td><td>179.0</td><td>179.4</td><td>1</td></tr><tr><td>5</td><td>Caa and lower</td><td>109.7</td><td>62.3</td><td>—</td><td>103.1</td><td>99.3</td><td>—</td></tr><tr><td>6</td><td>In or near default</td><td>71.2</td><td>47.5</td><td>—</td><td>12.0</td><td>11.9</td><td>—</td></tr><tr><td></td><td>Total fixed maturity securities</td><td>$46,555.1</td><td>$38,826.4</td><td>100%</td><td>$44,495.6</td><td>$44,548.7</td><td>100%</td></tr></table>
<table><tr><td> </td><td colspan="2"> December 31, 2008</td><td colspan="2"> December 31, 2007</td></tr><tr><td> </td><td> Amortized cost</td><td> Carrying amount</td><td> Amortized cost</td><td> Carrying amount</td></tr><tr><td> </td><td colspan="4"><i>(in millions)</i> </td></tr><tr><td> Lowest agency rating</td><td></td><td></td><td></td><td></td></tr><tr><td>AAA</td><td>$3,558.3</td><td>$2,757.0</td><td>$2,818.8</td><td>$2,829.6</td></tr><tr><td>AA</td><td>812.7</td><td>373.4</td><td>645.3</td><td>631.3</td></tr><tr><td>A</td><td>673.0</td><td>270.8</td><td>636.4</td><td>601.4</td></tr><tr><td>BBB</td><td>555.3</td><td>179.7</td><td>569.8</td><td>504.8</td></tr><tr><td>BB and below</td><td>86.0</td><td>26.2</td><td>84.1</td><td>98.5</td></tr><tr><td>Total by lowest agency rating</td><td>$5,685.3</td><td>$3,607.1</td><td>$4,754.4</td><td>$4,665.6</td></tr><tr><td> Vintage</td><td></td><td></td><td></td><td></td></tr><tr><td>2003 and prior</td><td>$1,888.6</td><td>$1,587.2</td><td>$2,092.9</td><td>$2,174.9</td></tr><tr><td>2004</td><td>586.3</td><td>393.5</td><td>545.6</td><td>523.4</td></tr><tr><td>2005</td><td>913.6</td><td>547.9</td><td>716.2</td><td>683.4</td></tr><tr><td>2006 -1</td><td>563.4</td><td>282.8</td><td>428.2</td><td>389.7</td></tr><tr><td>2007 -1</td><td>1,642.3</td><td>750.4</td><td>971.5</td><td>894.2</td></tr><tr><td>2008</td><td>91.1</td><td>45.3</td><td>—</td><td>—</td></tr><tr><td>Total by vintage</td><td>$5,685.3</td><td>$3,607.1</td><td>$4,754.4</td><td>$4,665.6</td></tr></table>

Question: What is the Carrying amount of the Total fixed maturity securities at December 31, 2008? (in million)
Answer: 38826.4