PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 7.
POLICYHOLDERS’ LIABILITIES Future Policy Benefits Future policy benefits at December 31, are as follows:
## Table 0 ##
Life insurance liabilities include reserves for death and endowment policy benefits, terminal dividends and certain health benefits.
Individual and group annuities and supplementary contracts liabilities include reserves for life contingent immediate annuities and life contingent group annuities.
Other contract liabilities include unearned revenue and certain other reserves for group and individual life and health products.
Future policy benefits for individual participating traditional life insurance are based on the net level premium method, calculated using the guaranteed mortality and nonforfeiture interest rates which range from 2.5% to 8.5%; less than 1% of the reserves are based on an interest rate in excess of 8%.
Participating insurance represented 23% and 26% of domestic individual life insurance in force at December 31, 2005 and 2004, respectively, and 90%, 91% and 92% of domestic individual life insurance premiums for 2005, 2004 and 2003, respectively.
Future policy benefits for individual non-participating traditional life insurance policies, group and individual long-term care policies and individual health insurance policies are equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves.
Assumptions as to mortality, morbidity and persistency are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established.
Interest rates used for the aggregate reserves range from 1.4% to 9.5%; less than 2% of the reserves are based on an interest rate in excess of 8%.
Future policy benefits for individual and group annuities and supplementary contracts are equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves.
Assumptions as to mortality are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established.
The interest rates used in the determination of the aggregate reserves range from 1.4% to 14.8%; less than 2% of the reserves are based on an interest rate in excess of 8%.
Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company’s experience (except for certain group insurance coverages for which future policy benefits are equal to gross unearned premium reserves).
The interest rates used in the determination of the present values range from 0% to 6.7%; there are no reserves with an interest rate in excess of 8%.
Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses and to recover any unamortized policy acquisition costs.
Premium deficiency reserves have been recorded for the group single premium annuity business, which consists of limited-payment, long-duration traditional and non-participating annuities; structured settlements and single premium immediate annuities with life contingencies; and for certain individual health policies.
Liabilities of $3,034 million and $3,300 million are included in “Future policy benefits” with respect to these deficiencies at December 31, 2005 and 2004, respectively.
The Company’s liability for future policy benefits is also inclusive of liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 8.
2004 include asset management fees of $28 million associated with certain money market mutual fund balances of brokerage clients of Wachovia Securities.
These balances were essentially eliminated as of September 30, 2004 due to the replacement of those funds with other investment alternatives for those brokerage clients.
The resulting reduction in revenues has been offset by payments from Wachovia under an agreement dated as of July 30, 2004 implementing arrangements with respect to money market mutual funds in connection with the combination of our retail securities brokerage and clearing operations with those of Wachovia.
This agreement extends for ten years after termination of the joint venture with Wachovia.
The revenue from Wachovia under this agreement, included in revenues from retail customers in the table above, was $54 million and $35 million for 2005 and 2004, respectively.2004 to 2003 Annual Comparison.
Revenues increased $104 million, from $1.360 billion in 2003 to $1.464 billion in 2004, due primarily to higher fees from the management of institutional and retail customer assets as a result of increased asset values primarily from market appreciation, assets associated with the retirement business acquired from CIGNA, an increase in transaction and performance based incentive fees related to real estate assets under management and increased revenues related to program services for certain mutual fund wrap and separately managed platforms of Wachovia Securities.
Reduced income from our commercial mortgage operations, reflecting lower production volume and composition of originations, partially offset this increase.
Revenues include asset management fees of $28 million and $79 million, for 2004 and 2003, respectively, associated with certain money market mutual fund balances of brokerage clients of Wachovia Securities subject to the arrangements with Wachovia described above.
The revenue from Wachovia under this agreement was $35 million in 2004.
Expenses 2005 to 2004 Annual Comparison.
Expenses, as shown in the table above under “—Operating Results,” increased $34 million, from $1.198 billion in 2004 to $1.232 billion in 2005, primarily reflecting higher incentive based compensation costs resulting from favorable performance in 2005.
Partially offsetting this increase is a reduction in commission expenses associated with the money market funds of brokerage clients of Wachovia Securities subject to the arrangements with Wachovia described above.
Additionally, 2004 results include charges related to declines in value of intangible assets, expenses incurred in exiting an operating facility and termination of activities related to certain of our international investment management operations.2004 to 2003 Annual Comparison.
Expenses increased $46 million, from $1.152 billion in 2003 to $1.198 billion in 2004, due primarily to higher incentive based compensation costs associated with increased revenues, as well as charges in 2004 related to declines in value of intangible assets, expenses incurred in exiting an operating facility and termination of activities related to certain of our international investment management operations.
Financial Advisory Operating Results The following table sets forth the Financial Advisory segment’s operating results for the periods indicated.
## Table 1 ##
(1) Results of this segment are the same on both an adjusted operating income basis and a GAAP basis.
On July 1, 2003, we combined our retail securities brokerage and clearing operations with those of Wachovia Corporation, or Wachovia, and formed Wachovia Securities Financial Holdings, LLC, or Wachovia Securities, a joint venture headquartered in Richmond, Virginia.
We have a 38% ownership interest in the joint venture, while Wachovia owns the remaining 62%.
The transaction included our securities brokerage operations but did not include our equity sales, trading and research operations.
As part of the transaction we retained certain assets and liabilities related to the contributed businesses, including liabilities for certain litigation and regulatory matters.
We account for our 38% ownership of the joint venture under the equity method of accounting; periods prior to July 1, 2003 continue to reflect the results of our previously wholly owned securities brokerage operations on a fully consolidated basis.
Accordingly “—Operating Results”, as shown above, presents our securities brokerage operations on a consolidated basis for the first six months of 2003 and earnings from the joint venture on the equity basis for the remaining six months of 2003 and the years ended December 31, 2004 and 2005.2005 to 2004 Annual Comparison.
Adjusted operating income decreased $10 million, from a loss of $245 million in 2004 to a loss of $255 million in 2005.
The segment’s results for 2005 include our share of earnings from Wachovia Securities, on a pre-tax basis and excluding transition costs, of $217 million, compared to $172 million in 2004.
The segment’s results also include expenses of $452 million in 2005 related to obligations and costs we retained in connection with the contributed businesses primarily for litigation and regulatory matters, compared to $227 million in 2004.
These expenses include accruals for estimated settlement costs related to market timing issues under active negotiation with state and federal authorities.
Our results for 2005 reflect a decrease of $174 million in transition costs, from $194 million in 2004 to $20 million in 2005, reflecting the completion of the business integration during the first half of 2005.
In addition, results include income of zero and $4 million from our equity sales and trading operations for 2005 and 2004, respectively.
When we determine that there is an other-than-temporary impairment, we record a writedown to estimated fair value, which reduces the cost basis.
The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value.
In periods subsequent to the recognition of an other-than-temporary impairment, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment.
Accordingly, the discount (or reduced premium) based on the new cost basis is accreted into net investment income over the remaining life of the security based upon the amount and timing of expected future cash flows and is included in adjusted operating income.
Estimated fair values for fixed maturities, other than private placement securities, are based on quoted market prices or prices obtained from independent pricing services.
For these private fixed maturities, fair value is determined typically by using a discounted cash flow model, which relies upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions and takes into account, among other factors, the credit quality of the issuer and the reduced liquidity associated with private placements.
The estimated fair value of certain non-performing private placement fixed maturities is based on management’s estimates.
Impairments on fixed maturity securities are included in “Realized investment gains (losses), net” and are excluded from adjusted operating income.
Impairments of fixed maturity securities attributable to the Financial Services Businesses were $23 million in 2006 and $69 million in 2005.
Impairments of fixed maturity securities attributable to the Closed Block Business were $31 million in 2006 and $32 million in 2005.
For a further discussion of impairments, see “—Realized Investment Gains” above.
Trading Account Assets Supporting Insurance Liabilities Certain products included in the retirement business we acquired from CIGNA, as well as certain products included in the International Insurance segment, are experience-rated, meaning that the investment results associated with these products will ultimately accrue to contractholders.
The investments supporting these experience-rated products, excluding commercial loans, are classified as trading.
These trading investments are reflected on the balance sheet as “Trading account assets supporting insurance liabilities, at fair value.
” Realized and unrealized gains and losses for these investments are reported in “Asset management fees and other income.
” Investment income for these investments is reported in “Net investment income.
” The following table sets forth the composition of this portfolio as of the dates indicated.
## Table 2 ##
Intermodal – Decreased volumes and fuel surcharges reduced freight revenue from intermodal shipments in 2009 versus 2008.
Volume from international traffic decreased 24% in 2009 compared to 2008, reflecting economic conditions, continued weak imports from Asia, and diversions to non-UPRR served ports.
Additionally, continued weakness in the domestic housing and automotive sectors translated into weak demand in large sectors of the international intermodal market, which also contributed to the volume decline.
Conversely, domestic traffic increased 8% in 2009 compared to 2008.
A new contract with Hub Group, Inc. , which included additional shipments, was executed in the second quarter of 2009 and more than offset the impact of weak market conditions in the second half of 2009.
## Table 3 ##
Price increases and fuel surcharges generated higher revenue in 2008, partially offset by lower volume levels.
International traffic declined 11% in 2008, reflecting continued softening of imports from China and the loss of a customer contract.
Notably, the peak intermodal shipping season, which usually starts in the third quarter, was particularly weak in 2008.
Additionally, continued weakness in domestic housing and automotive sectors translated into weak demand in large sectors of the international intermodal market, which also contributed to lower volumes.
Domestic traffic declined 3% in 2008 due to the loss of a customer contract and lower volumes from less-than-truckload shippers.
Additionally, the flood-related embargo on traffic in the Midwest during the second quarter hindered intermodal volume levels in 2008.
Mexico Business – Each of our commodity groups include revenue from shipments to and from Mexico.
Revenue from Mexico business decreased 26% in 2009 versus 2008 to $1.2 billion.
Volume declined in five of our six commodity groups, down 19% in 2009, driven by 32% and 24% reductions in industrial products and automotive shipments, respectively.
Conversely, energy shipments increased 9% in 2009 versus 2008, partially offsetting these declines.
Revenue from Mexico business increased 13% to $1.6 billion in 2008 compared to 2007.
Price improvements and fuel surcharges contributed to these increases, partially offset by a 4% decline in volume in 2008 compared to 2007.
Operating Expenses

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td> 2005 </td><td> 2004 </td></tr><tr><td></td><td colspan="2"> (in millions)</td></tr><tr><td>Life insurance</td><td>$80,596</td><td>$81,729</td></tr><tr><td>Individual and group annuities and supplementary contracts</td><td>16,346</td><td>17,084</td></tr><tr><td>Other contract liabilities</td><td>3,241</td><td>2,934</td></tr><tr><td>Subtotal future policy benefits excluding unpaid claims and claim adjustment expenses</td><td>100,183</td><td>101,747</td></tr><tr><td>Unpaid claims and claim adjustment expenses</td><td>1,982</td><td>1,807</td></tr><tr><td>Total future policy benefits</td><td>$102,165</td><td>$103,554</td></tr></table>
<table><tr><td></td><td colspan="3">Year ended December 31,</td></tr><tr><td></td><td>2005</td><td>2004</td><td>2003</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td> Operating results:</td><td></td><td></td><td></td></tr><tr><td>Revenues</td><td>$453</td><td>$318</td><td>$1,306</td></tr><tr><td>Expenses</td><td>708</td><td>563</td><td>1,417</td></tr><tr><td>Adjusted operating income-1</td><td>$-255</td><td>$-245</td><td>$-111</td></tr></table>
<table><tr><td></td><td colspan="2"> December 31, 2006</td><td colspan="2"> December 31, 2005</td></tr><tr><td></td><td> Amortized Cost</td><td> Fair Value</td><td> Amortized Cost</td><td> Fair Value</td></tr><tr><td></td><td colspan="4"> (in millions)</td></tr><tr><td>Short-term Investments and Cash Equivalents</td><td>$299</td><td>$299</td><td>$317</td><td>$317</td></tr><tr><td>Fixed Maturities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. Government</td><td>173</td><td>175</td><td>206</td><td>208</td></tr><tr><td>Foreign Government</td><td>316</td><td>319</td><td>329</td><td>330</td></tr><tr><td>Corporate Securities</td><td>10,089</td><td>9,904</td><td>9,207</td><td>8,980</td></tr><tr><td>Asset-Backed Securities</td><td>609</td><td>603</td><td>685</td><td>679</td></tr><tr><td>Mortgage Backed</td><td>1,933</td><td>1,905</td><td>2,300</td><td>2,255</td></tr><tr><td>Total Fixed Maturities</td><td>13,120</td><td>12,906</td><td>12,727</td><td>12,452</td></tr><tr><td>Equity Securities</td><td>833</td><td>1,057</td><td>811</td><td>1,012</td></tr><tr><td>Total trading account assets supporting insurance liabilities</td><td>$14,252</td><td>$14,262</td><td>$13,855</td><td>$13,781</td></tr></table>
<table><tr><td><i>Millions of Dollars</i></td><td><i>2009</i></td><td><i>2008</i></td><td><i>2007</i></td><td><i>% Change 2009 v 2008</i></td><td>% Change 2008 v 2007</td></tr><tr><td>Compensation and benefits</td><td>$4,063</td><td>$4,457</td><td>$4,526</td><td>-9%</td><td>-2%</td></tr><tr><td>Fuel</td><td>1,763</td><td>3,983</td><td>3,104</td><td>-56</td><td>28</td></tr><tr><td>Purchased services and materials</td><td>1,614</td><td>1,902</td><td>1,856</td><td>-15</td><td>2</td></tr><tr><td>Depreciation</td><td>1,444</td><td>1,387</td><td>1,321</td><td>4</td><td>5</td></tr><tr><td>Equipment and other rents</td><td>1,180</td><td>1,326</td><td>1,368</td><td>-11</td><td>-3</td></tr><tr><td>Other</td><td>687</td><td>840</td><td>733</td><td>-18</td><td>15</td></tr><tr><td>Total</td><td>$10,751</td><td>$13,895</td><td>$12,908</td><td>-23%</td><td>8%</td></tr></table>

Question: what was the average yearly decline in international traffic in 2008 and in 2009?
Answer: 0.175
Reasoning program: add(11%,24%), divide(#0,const_2)