Proportional Free Cash Flow (a non-GAAP measure) We define proportional free cash flow as cash flows from operating activities less maintenance capital expenditures (including non-recoverable environmental capital expenditures), adjusted for the estimated impact of noncontrolling interests.
The proportionate share of cash flows and related adjustments attributable to noncontrolling interests in our subsidiaries comprise the proportional adjustment factor presented in the reconciliation below.
Upon the Company's adoption of the accounting guidance for service concession arrangements effective January 1, 2015, capital expenditures related to service concession assets that would have been classified as investing activities on the Consolidated Statement of Cash Flows are now classified as operating activities.
See Note 1—General and Summary of Significant Accounting Policies of this Form 10-K for further information on the adoption of this guidance.
Beginning in the quarter ended March 31, 2015, the Company changed the definition of Proportional Free Cash Flow to exclude the cash flows for capital expenditures related to service concession assets that are now classified within net cash provided by operating activities on the Consolidated Statement of Cash Flows.
The proportional adjustment factor for these capital expenditures is presented in the reconciliation below.
We also exclude environmental capital expenditures that are expected to be recovered through regulatory, contractual or other mechanisms.
An example of recoverable environmental capital expenditures is IPL's investment in MATS-related environmental upgrades that are recovered through a tracker.
See Item 1.
—US SBU—IPL—Environmental Matters for details of these investments.
The GAAP measure most comparable to proportional free cash flow is cash flows from operating activities.
We believe that proportional free cash flow better reflects the underlying business performance of the Company, as it measures the cash generated by the business, after the funding of maintenance capital expenditures, that may be available for investing or repaying debt or other purposes.
Factors in this determination include the impact of noncontrolling interests, where AES consolidates the results of a subsidiary that is not wholly-owned by the Company.
The presentation of free cash flow has material limitations.
Proportional free cash flow should not be construed as an alternative to cash from operating activities, which is determined in accordance with GAAP.
Proportional free cash flow does not represent our cash flow available for discretionary payments because it excludes certain payments that are required or to which we have committed, such as debt service requirements and dividend payments.
Our definition of proportional free cash flow may not be comparable to similarly titled measures presented by other companies.
## Table 0 ##
Service concession asset expenditures excluded from proportional free cash flow non-GAAP metric.
(2) The proportional adjustment factor, proportional maintenance capital expenditures (net of reinsurance proceeds) and proportional non-recoverable environmental capital expenditures are calculated by multiplying the percentage owned by noncontrolling interests for each entity by its corresponding consolidated cash flow metric and are totaled to the resulting figures.
For example, Parent Company A owns 20% of Subsidiary Company B, a consolidated subsidiary.
Thus, Subsidiary Company B has an 80% noncontrolling interest.
Assuming a consolidated net cash flow from operating activities of $100 from Subsidiary B, the proportional adjustment factor for Subsidiary B would equal $80 (or $100 x 80%).
The Company calculates the proportional adjustment factor for each consolidated business in this manner and then sums these amounts to determine the total proportional adjustment factor used in the reconciliation.
The proportional adjustment factor may differ from the proportion of income attributable to noncontrolling interests as a result of (a) non-cash items which impact income but not cash and (b) AES' ownership interest in the subsidiary where such items occur.
(3) Includes proportional adjustment amount for service concession asset expenditures of $84 million for the year ended December 31, 2015 .
The Company adopted service concession accounting effective January 1, 2015.
(4) Excludes IPL's proportional recoverable environmental capital expenditures of $205 million, $163 million and $110 million for the years December 31, 2015, 2014 and 2013, respectively
The cost of services received from employees in exchange for the issuance of stock options and restricted stock awards is measured based on the grant date fair value of the awards issued.
The value of stock options and restricted stock unit awards at the date of the grant is amortized through expense over the three-year service period.
All awards granted in 2013, 2012 and 2011 are classified as equity.
The Company receives a tax deduction based on the intrinsic value of the award at the exercise date for stock options and the distribution date for restricted stock units.
For each award, throughout the requisite service period, the Company recognizes the tax benefits, which have been included in deferred tax assets, related to compensation costs.
The tax deductions in excess of the benefits recorded throughout the requisite service period are recorded to shareholders’ equity or the income statement and are included in the financing section of the statement of cash flows.
The Company stratified its grant populations and used historic employee turnover rates to estimate employee forfeitures.
The estimated rate is compared to the actual forfeitures at the end of the period and adjusted as necessary.
Stock Options In 2013, 2012 and 2011, the Company granted non-qualified stock options to certain employees under the Plan.
The stock options vest ratably over the three-year service period beginning on January 1 of the year of grant.
These awards have no performance vesting conditions and the grant date fair value is amortized through expense over the requisite service period using the straight-line method.
The following table presents the weighted-average assumptions used in the Black-Scholes option-pricing model for grants and the resulting weighted-average grant date fair value per share of stock options granted in the years ended December 31, 2013, 2012 and 2011:
## Table 1 ##
The Company utilized the “simplified method” to determine the expected stock option life due to insufficient historical experience to estimate the exercise patterns of the stock options granted.
The Company began granting stock options at the time of its initial public offering in April 2008.
Expected volatility is based on a weighted average of historic volatilities of traded common stock of peer companies (regulated water companies) over the expected term of the stock options and historic volatilities of the Company’s common stock during the period it has been publicly traded.
The dividend yield is based on the Company’s expected dividend payments and the stock price on the date of grant.
The risk-free interest rate is the market yield on U. S.  Treasury strips with maturities similar to the expected term of the stock options.
The exercise price of the stock options is equal to the fair market value of the underlying stock on the date of option grant.
Stock options vest over periods ranging from one to three years and expire seven years from the effective date of the grant.
The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model.
The value of stock options at the date of the grant is amortized through expense over the requisite service period using the straight-line method.
As of December 31, 2013, $ 2,226 of total unrecognized compensation cost related to nonvested stock options is expected to be recognized over the remaining weighted-average period of 1.4 years.
The total grant date fair value of stock options vested during the years ended December 31, 2013, 2012 and 2011 was $3,512, $3,219, and $4,578, respectively.
The following table sets forth water services operating revenues by customer class and wastewater services operating revenues, excluding other revenues, for our Regulated Businesses for 2013, 2012, and 2011:
## Table 2 ##
The following table sets forth billed sales volumes by customer class for our Regulated Businesses for 2013, 2012 and 2011:
## Table 3 ##
The vast majority of our regulated water customers are metered, which allows us to measure and bill for our customers’ water consumption, typically on a monthly basis.
Our wastewater customers are billed either on a fixed charge basis or based on their water consumption.
Customer usage of water is affected by weather conditions, particularly during the summer.
Our water systems generally experience higher demand in the summer due to the warmer temperatures and increased usage by customers for lawn irrigation and other outdoor uses.
Summer weather that is cooler and wetter than average generally serves to suppress customer water demand and can reduce water operating revenues and operating income.
Summer weather that is hotter and drier than average generally increases operating revenues and operating income.
However, when weather conditions are extremely dry, and even if our water supplies are sufficient to serve our customers, our systems may be affected by drought-related warnings and/or water usage restrictions imposed by governmental agencies, thereby reducing customer usage and operating revenues.
These restrictions may be imposed at a regional or state level and may affect our service areas, regardless of our readiness to meet unrestricted customer demands.
Other factors affecting our customers’ usage of water include conservation initiatives, such as the use of more efficient household fixtures and appliances among residential consumers; declining household sizes in the United States; and changes in the economy and credit markets which could have significant impacts on our industrial and commercial customers’ operational and financial performance.
Customer growth in our Regulated Businesses is driven by (i) organic population growth in our authorized service areas; (ii) adding new customers to our regulated customer base by acquiring water and/or wastewater utility systems; and (iii) the sale of water to other community water systems.
Generally, we add customers through tuck-ins of small water and/or wastewater systems, typically serving fewer than 10,000 customers, in
of $4.0 million from price redeterminations for several of our military contracts as well as an increase of $16.6 million in our HOS revenues associated with contract growth, most notably in New York City.
Operation and maintenance.
Operation and maintenance expense decreased $12.6 million, or 4.5%, for the year ended December 31, 2013, compared to the year ended December 31, 2012.
The following table provides information regarding operation and maintenance expense for the years ended December 31, 2013, and 2012, by major expense category:
## Table 4 ##
As noted in the table above, decreases in operating supplies and services, production costs and employeerelated costs were partially offset by an increase in maintenance materials and supplies.
The decrease in production costs and employee-related costs is mostly due to the termination of certain municipal and industrial operations and maintenance contracts.
The decrease in operating supplies and services is attributable to the release of $3.8 million in loss contract reserves due to the resolution of certain outstanding issues and uncertainties.
Additionally, 2013 was impacted by decreased construction activity for our military contracts and is partially offset by increased HOS contracted services expense as well as higher printing and postage costs associated with expanding into new markets, including New York City.
The increase in maintenance materials and supplies is primarily due to higher HOS repair costs, which is attributable to new contracts, an increase in the number of claims, as well as the average cost per claim and is partially offset by the terminated municipal and industrial operations and maintenance contracts.
The decrease in the other category is mainly due to decreases in uncollectible accounts expense of $3.5 million, which is due to 2012 including incremental amounts related to terminated contracts in addition to improved collection experience in 2013 for certain other municipal and industrial operations and maintenance contracts.
Operating expense.
The decrease in operating expenses for the year ended December 31, 2013 is primarily driven by the decrease in operation and maintenance expense, which is explained above.
Income from continuing operations before income taxes.
The $4.8 million increase for the year ended December 31, 2013, is the result of the aforementioned changes in operating revenues and operating and maintenance expense.
Comparison of Results of Operations for the Years Ended December 31, 2012 and 2011 Operating revenues.
The increase in revenues for the year ended December 31, 2012, compared to the same period in 2011, is primarily attributable to an $8.0 million increase in our HOS revenues associated with continued contract growth and a price increase.
Also contributing to the higher revenues was a $2.2 million increase in our Contract Operations Group revenues which is mainly due to incremental revenues associated with military construction and operation and maintenance projects.
These increases were offset by decreases in our Carbon Services Group revenues of $6.0 million, as we are no longer providing these services to the Regulated Businesses, and a decrease in revenues in our Terratec business of $1.8 million.
Operation and maintenance.
Operation and maintenance expense decreased $1.6 million, or 0.6%, for the year ended December 31, 2012, compared to the year ended December 31, 2011.
The following table provides information regarding operation and maintenance expense for the years ended December 31, 2012, and 2011, by major expense category:

<table><tr><td>Calculation of Proportional Free Cash Flow (in millions)</td><td>2015</td><td>2014</td><td>2013</td><td>2015/2014 Change</td><td>2014/2013 Change</td></tr><tr><td>Net Cash Provided by Operating Activities</td><td>$2,134</td><td>$1,791</td><td>$2,715</td><td>$343</td><td>$-924</td></tr><tr><td>Add: capital expenditures related to service concession assets<sup>-1</sup></td><td>165</td><td>—</td><td>—</td><td>165</td><td>—</td></tr><tr><td>Adjusted Operating Cash Flow</td><td>2,299</td><td>1,791</td><td>2,715</td><td>508</td><td>-924</td></tr><tr><td>Less: proportional adjustment factor on operating cash activities<sup>-2 -3</sup></td><td>-558</td><td>-359</td><td>-834</td><td>-199</td><td>475</td></tr><tr><td>Proportional Adjusted Operating Cash Flow</td><td>1,741</td><td>1,432</td><td>1,881</td><td>309</td><td>-449</td></tr><tr><td>Less: proportional maintenance capital expenditures, net of reinsurance proceeds<sup>-2</sup></td><td>-449</td><td>-485</td><td>-535</td><td>36</td><td>50</td></tr><tr><td>Less: proportional non-recoverable environmental capital expenditures<sup>-2 -4</sup></td><td>-51</td><td>-56</td><td>-75</td><td>5</td><td>19</td></tr><tr><td>Proportional Free Cash Flow</td><td>$1,241</td><td>$891</td><td>$1,271</td><td>$350</td><td>$-380</td></tr></table>
<table><tr><td></td><td>2013</td><td>2012</td><td colspan="2">2011</td></tr><tr><td>Dividend yield</td><td>2.52%</td><td>2.70%</td><td></td><td>3.25%</td></tr><tr><td>Expected volatility</td><td>23.50%</td><td>28.35%</td><td></td><td>29.32%</td></tr><tr><td>Risk-free interest rate</td><td>0.70%</td><td>0.78%</td><td></td><td>1.93%</td></tr><tr><td>Expected life (years)</td><td>4.3</td><td>4.4</td><td></td><td>4.4</td></tr><tr><td>Exercise price</td><td>$39.60</td><td>$34.14</td><td>$</td><td>27.08</td></tr><tr><td>Grant date fair value per share</td><td>$5.78</td><td>$6.11</td><td>$</td><td>5.14</td></tr></table>
<table><tr><td></td><td colspan="6">For the years ended December 31,</td></tr><tr><td></td><td colspan="2">2013</td><td colspan="2">2012</td><td colspan="2">2011</td></tr><tr><td></td><td colspan="6">(In millions)</td></tr><tr><td>Water service</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential</td><td>$1,473.1</td><td>57.8%</td><td>$1,468.6</td><td>58.2%</td><td>$1,339.4</td><td>58.1%</td></tr><tr><td>Commercial</td><td>529.8</td><td>20.8%</td><td>518.3</td><td>20.6%</td><td>474.2</td><td>20.5%</td></tr><tr><td>Industrial</td><td>123.3</td><td>4.8%</td><td>139.1</td><td>5.5%</td><td>114.5</td><td>5.0%</td></tr><tr><td>Public and other</td><td>338.8</td><td>13.3%</td><td>317.7</td><td>12.6%</td><td>302.3</td><td>13.1%</td></tr><tr><td>Total water services</td><td>$2,465.0</td><td>96.7%</td><td>$2,443.7</td><td>96.9%</td><td>$2,230.4</td><td>96.7%</td></tr><tr><td>Wastewater services</td><td>82.8</td><td>3.3%</td><td>78.2</td><td>3.1%</td><td>76.3</td><td>3.3%</td></tr><tr><td>Total</td><td>$2,547.8</td><td>100.0%</td><td>$2,521.9</td><td>100.0%</td><td>$2,306.7</td><td>100.0%</td></tr></table>
<table><tr><td></td><td colspan="6">For the years ended December 31,</td></tr><tr><td></td><td colspan="2">2013</td><td colspan="2">2012</td><td colspan="2">2011</td></tr><tr><td></td><td colspan="6">(gallons in millions)</td></tr><tr><td>Billed water sales volumes</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential</td><td>180,976</td><td>51.8%</td><td>188,927</td><td>51.5%</td><td>180,916</td><td>51.2%</td></tr><tr><td>Commercial</td><td>80,392</td><td>23.0%</td><td>84,226</td><td>23.0%</td><td>81,455</td><td>23.0%</td></tr><tr><td>Industrial</td><td>37,107</td><td>10.6%</td><td>39,429</td><td>10.7%</td><td>39,295</td><td>11.1%</td></tr><tr><td>Public and other</td><td>51,009</td><td>14.6%</td><td>54,202</td><td>14.8%</td><td>52,069</td><td>14.7%</td></tr><tr><td>Total</td><td>349,484</td><td>100.0%</td><td>366,784</td><td>100.0%</td><td>353,735</td><td>100.0%</td></tr></table>
<table><tr><td></td><td colspan="4">For the Years Ended December 31,</td></tr><tr><td></td><td>2013</td><td>2012</td><td>Increase (Decrease)</td><td>Percentage</td></tr><tr><td></td><td colspan="4">(Dollars in thousands)</td></tr><tr><td>Production costs</td><td>$38,943</td><td>$42,772</td><td>$-3,829</td><td>-9.0%</td></tr><tr><td>Employee-related costs</td><td>67,042</td><td>71,002</td><td>-3,960</td><td>-5.6%</td></tr><tr><td>Operating supplies and services</td><td>111,755</td><td>117,749</td><td>-5,994</td><td>-5.1%</td></tr><tr><td>Maintenance materials and supplies</td><td>41,775</td><td>36,730</td><td>5,045</td><td>13.7%</td></tr><tr><td>Other</td><td>4,738</td><td>8,556</td><td>-3,818</td><td>-44.6%</td></tr><tr><td>Total</td><td>$264,253</td><td>$276,809</td><td>$-12,556</td><td>-4.5%</td></tr></table>

Question: In what year is Wastewater services greater than 78.4?
Answer: 2013