CITIZENS FINANCIAL GROUP, INC.  MANAGEMENT?S DISCUSSION AND ANALYSIS 54 Commercial Banking
## Table 0 ##
(1) We periodically evaluate and refine our methodologies used to measure financial performance of our business operating segments.
In first quarter 2018, we enhanced our assumptions for the liquidity and deposit components within our FTP methodology which provides a credit for sources of funds and a charge for the use of funds by each business operating segment.
The enhancement largely provides increased credit for the stability of deposit composition, and an increased charge for unused commitments under lending arrangements.
Prior periods have not been adjusted for this change.
(2) Includes loans held for sale.
(3) We revised our method of calculating the loans-to-deposits ratio in third quarter 2018 to exclude loans held for sale.
Prior periods have been adjusted to conform with the current period presentation.
Commercial Banking net interest income of $1.5 billion increased $86 million, or 6%, from $1.4 billion for 2017, reflecting a $2.7 billion increase in average loans and leases and a $699 million increase in average deposits.
Noninterest income of $545 million increased $7 million, or 1%, from $538 million for 2017, reflecting strength in foreign exchange fees, card fees and letter of credit and loan fees, partially offset by decreases in capital market fees.
Noninterest expense of $813 million increased $41 million, or 5%, from $772 million for 2017, largely driven by higher salaries and benefits expense and outside services.
Provision for credit losses of $26 million increased $7 million from 2017, driven by higher net charge-offs in 2018.
Residential real estate loans, which consist of traditional residential mortgages and home equity loans and lines of credit, totaled $3.7 billion at December 31, 2018.
The residential real estate portfolio is principally located within the Corporation's primary geographic markets.
Substantially all residential real estate loans past due 90 days or more are placed on nonaccrual status, and substantially all junior lien home equity loans that are current or less than 90 days past due are placed on nonaccrual status if full collection of the senior position is in doubt.
At no later than 180 days past due, such loans are charged off to current appraised values less costs to sell.
Residential mortgages totaled $2.0 billion at December 31, 2018, and were primarily larger, variable-rate mortgages originated and retained for certain private banking relationship customers.
Of the $2.0 billion of residential mortgage loans outstanding, $36 million were on nonaccrual status at December 31, 2018.
The home equity portfolio totaled $1.8 billion at December 31, 2018, of which $1.6 billion was outstanding under primarily variable-rate, interest-only home equity lines of credit, $123 million were in amortizing status and $36 million were closed-end home equity loans.
Of the $1.8 billion of home equity loans outstanding, $19 million were on nonaccrual status at December 31, 2018.
A majority of the home equity portfolio was secured by junior liens at December 31, 2018.
Energy Lending The Corporation has a portfolio of Energy loans that are included primarily in commercial loans in the Consolidated Balance Sheets.
Customers in the Corporation's Energy business line (approximately 170 relationships) are engaged in three segments of the oil and gas business: exploration and production (E&P), midstream and energy services.
E&P generally includes such activities as searching for potential oil and gas fields, drilling exploratory wells and operating active wells.
Commitments to E&P borrowers are generally subject to semi-annual borrowing base re-determinations based on a variety of factors including updated prices (reflecting market and competitive conditions), energy reserve levels and the impact of hedging.
The midstream sector is generally involved in the transportation, storage and marketing of crude and/or refined oil and gas products.
The Corporation's energy services customers provide products and services primarily to the E&P segment.
The following table summarizes information about the Corporation's portfolio of Energy loans.
## Table 1 ##
Loans in the Energy business line increased $327 million, or 18 percent, to $2.2 billion at December 31, 2018, compared to $1.8 billion at December 31, 2017, or approximately 4 percent of total loans at both December 31, 2018 and 2017.
Total exposure, including unused commitments to extend credit and letters of credit, was $4.5 billion and $4.0 billion at December 31, 2018 and December 31, 2017, respectively.
The Corporation's allowance methodology considers the various risk elements within the loan portfolio.
When merited, the Corporation may incorporate a qualitative reserve component for Energy loans.
There were $6 million and $25 million in net credit-related charge-offs in the Energy business line for the years ended December 31, 2018 and 2017, respectively.
Leveraged Loans Certain loans in the Corporation's commercial portfolio are considered leveraged transactions.
These loans are typically used for mergers, acquisitions, business recapitalizations, refinancing and equity buyouts.
To help mitigate the risk associated with these loans, the Corporation focuses on middle market companies with highly capable management teams, strong sponsors and solid track records of financial performance.
Industries prone to cyclical downturns and acquisitions with a high degree of integration risk are generally avoided.
Other considerations include the sufficiency of collateral, the level of balance sheet leverage and the adequacy of financial covenants.
During the underwriting process, cash flows are stress tested to evaluate the borrowers' abilities to handle economic downturns and an increase in interest rates.
The FDIC defines higher-risk commercial and industrial (HR C&I) loans for assessment purposes as loans generally with leverage of four times total debt to earnings before interest, taxes and depreciation (EBITDA) as well as three times senior debt to EBITDA, excluding certain collateralized loans.
HR C&I loans were $2.5 billion and $2.7 billion at December 31, 2018 and 2017, respectively.
Criticized loans within the HR C&I loan portfolio were $147 million and $284 million at December 31, 2018 and 2017, respectively.
Charge-offs of HR C&I loans totaled $15 million in 2018 and $9 million in 2017.
Expenses The Company’s operating expenses, stated as percentages of net revenues, are illustrated below for the three fiscal years ended December 26, 2004.
## Table 2 ##
Amortization decreased to $70,562 in 2004 from $76,053 in 2003 and $94,576 in 2002.
The decrease in amortization expense from 2003 primarily relates to 2003 charges related to certain unprofitable product lines.
The decrease from 2002 to 2003 is primarily related to decreased amortization of the property rights related to STAR WARS.
Amortization of these rights is based on actual sales of products under the related right as a portion of total expected sales of products related to this licensing right.
The Company expects amortization expense to be higher in 2005 due to the increased product revenue anticipated in connection with the anticipated release of STAR WARS EPISODE III: REVENGE OF THE SITH.
Royalty expense decreased to $223,193, or 7.4% of net revenues in 2004 from $248,423, or 7.9% of net revenues in 2003 and $296,152, or 10.5% of net revenues in 2002.
Lower royalty expense in 2004 compared to 2003 is primarily due to the decreased sales of BEYBLADE products.
The 2004 expense also includes a $7,200 charge related to future minimum guarantees not expected to be fully realized related to the Disney license agreement based on the Company’s reduced expectations for the related product line.
The decrease in royalty expense from 2002 to 2003 primarily relates to lower sales of STAR WARS related products, as there was no theatrical, video, or DVD release of a STAR WARS property in 2003.
The decrease in royalty expense in 2003 as a result of STAR WARS was partially offset by increased royalty expense related to BEYBLADE products and the foreign exchange impact of the weaker U. S.  dollar.
The Company expects royalty expense to increase in 2005 compared to 2004, due to the release of STAR WARS EPISODE III: REVENGE OF THE SITH.
Investment in research and product development costs is an important component to the Company’s strategy to grow core brands and to create new and innovative toy and game products.
The increase in expenditures for research and product development from $143,183, or 4.6% of net revenues in 2003 to $157,162, or 5.2% of net revenues in 2004 reflects such investment.
Higher development costs associated with electronic toys such as VIDEONOW COLOR and electronic games such as MISSION PAINT BALL, plug and play, and DVD games contributed to this increased expense in 2004.
The decrease in research and product development expenditures from $153,775, or 5.5% of net revenues in 2002 to 2003 levels was primarily due to the timing of expenses related to development of certain product lines.
Advertising expense has increased in dollars and as a percentage of net revenues to $387,523, or 12.9% of net revenues in 2004 from $363,876, or 11.6% of net revenues in 2003, and from $296,549, or 10.5% of net revenues in 2002.
This increase is consistent with the Company’s strategy to continue to focus on advertising as a means to increase and sustain awareness of its core brands, as well as to introduce new products.
Based on higher anticipated product revenues related to the theatrical release of STAR WARS EPISODE III: REVENGE OF THE SITH, the Company expects 2005 expense to decrease slightly as a percentage of revenues.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – (continued) (Amounts in Millions, Except Per Share Amounts) LIQUIDITY AND CAPITAL RESOURCES CASH FLOW OVERVIEW The following tables summarize key financial data relating to our liquidity, capital resources and uses of capital.

<table><tr><td></td><td colspan="2">As of and for the Year Ended December 31,</td><td></td><td></td></tr><tr><td>(dollars in millions)</td><td>2018</td><td>2017</td><td>Change</td><td>Percent</td></tr><tr><td>Net interest income<sup>-1</sup></td><td>$1,497</td><td>$1,411</td><td>$86</td><td>6%</td></tr><tr><td>Noninterest income</td><td>545</td><td>538</td><td>7</td><td>1</td></tr><tr><td>Total revenue</td><td>2,042</td><td>1,949</td><td>93</td><td>5</td></tr><tr><td>Noninterest expense</td><td>813</td><td>772</td><td>41</td><td>5</td></tr><tr><td>Profit before provision for credit losses</td><td>1,229</td><td>1,177</td><td>52</td><td>4</td></tr><tr><td>Provision for credit losses</td><td>26</td><td>19</td><td>7</td><td>37</td></tr><tr><td>Income before income tax expense</td><td>1,203</td><td>1,158</td><td>45</td><td>4</td></tr><tr><td>Income tax expense</td><td>276</td><td>384</td><td>-108</td><td>-28</td></tr><tr><td>Net income</td><td>$927</td><td>$774</td><td>$153</td><td>20</td></tr><tr><td>Loans and leases (period-end)<sup>(2)</sup></td><td>$53,439</td><td>$48,623</td><td>$4,816</td><td>10</td></tr><tr><td>Average Balances:</td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$52,362</td><td>$49,747</td><td>$2,615</td><td>5%</td></tr><tr><td>Total loans and leases<sup>-2</sup></td><td>51,344</td><td>48,655</td><td>2,689</td><td>6</td></tr><tr><td>Deposits</td><td>30,704</td><td>30,005</td><td>699</td><td>2</td></tr><tr><td>Interest-earning assets</td><td>51,572</td><td>48,802</td><td>2,770</td><td>6</td></tr><tr><td>Key Performance Metrics:</td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest margin</td><td>2.90%</td><td>2.89%</td><td>1bps</td><td></td></tr><tr><td>Efficiency ratio</td><td>39.80</td><td>39.62</td><td>18bps</td><td></td></tr><tr><td>Average loans to average deposits ratio<sup>-3</sup></td><td>166.09</td><td>161.15</td><td>494bps</td><td></td></tr><tr><td>Return on average total tangible assets</td><td>1.77</td><td>1.56</td><td>21bps</td><td></td></tr></table>
<table><tr><td>(dollar amounts in millions)</td><td colspan="4">2018</td><td colspan="4">2017</td></tr><tr><td>December 31</td><td colspan="2">Outstandings</td><td>Nonaccrual</td><td>Criticized (a)</td><td colspan="2">Outstandings</td><td>Nonaccrual</td><td>Criticized (a)</td></tr><tr><td>Exploration and production (E&P)</td><td>$1,771</td><td>82%</td><td>$46</td><td>$143</td><td>$1,346</td><td>73%</td><td>$94</td><td>$376</td></tr><tr><td>Midstream</td><td>298</td><td>14</td><td>—</td><td>43</td><td>295</td><td>16</td><td>—</td><td>37</td></tr><tr><td>Services</td><td>94</td><td>4</td><td>2</td><td>19</td><td>195</td><td>11</td><td>14</td><td>95</td></tr><tr><td>Total Energy business line</td><td>$2,163</td><td>100%</td><td>$48</td><td>$205</td><td>$1,836</td><td>100%</td><td>$108</td><td>$508</td></tr><tr><td colspan="3">As a percentage of total Energy loans</td><td>2%</td><td>9%</td><td></td><td></td><td>6%</td><td>28%</td></tr></table>
<table><tr><td> </td><td>2004</td><td>2003</td><td> 2002</td></tr><tr><td>Amortization</td><td>2.4%</td><td>2.4%</td><td>3.4%</td></tr><tr><td>Royalties</td><td>7.4</td><td>7.9</td><td>10.5</td></tr><tr><td>Research and product development</td><td>5.2</td><td>4.6</td><td>5.5</td></tr><tr><td>Advertising</td><td>12.9</td><td>11.6</td><td>10.5</td></tr><tr><td>Selling, distribution and administration</td><td>20.5</td><td>21.5</td><td>23.3</td></tr></table>

Question: In what year is Net interest income greater than 1450?
Answer: 2018