Item 1B.
UNRESOLVED STAFF COMMENTS None.
Item 2.
PROPERTIES The table below provides a summary of our containerboard mills, the principal products produced and each mill’s year-end 2011 annual practical maximum capacity based upon all of our paper machines’ production capabilities, as reported to the AF&PA:
## Table 0 ##
We currently own our four containerboard mills and 44 of our corrugated manufacturing operations (37 corrugated plants and seven sheet plants).
We also own one warehouse and miscellaneous other property, which includes sales offices and woodlands management offices.
These sales offices and woodlands management offices generally have one to four employees and serve as administrative offices.
PCA leases the space for four corrugated plants, 23 sheet plants, six regional design centers, and numerous other distribution centers, warehouses and facilities.
The equipment in these leased facilities is, in virtually all cases, owned by PCA, except for forklifts and other rolling stock which are generally leased.
We lease the cutting rights to approximately 88,000 acres of timberland located near our Valdosta mill (77,000 acres) and our Counce mill (11,000 acres).
On average, these cutting rights agreements have terms with approximately 12 years remaining.
Our corporate headquarters is located in Lake Forest, Illinois.
The headquarters facility is leased for the next ten years with provisions for two additional five year lease extensions.
Item 3.
LEGAL PROCEEDINGS During September and October 2010, PCA and eight other U. S.  and Canadian containerboard producers were named as defendants in five purported class action lawsuits filed in the United States District Court for the Northern District of Illinois, alleging violations of the Sherman Act.
The lawsuits have been consolidated in a single complaint under the caption Kleen Products LLC v Packaging Corp.  of America et al.
The consolidated complaint alleges that the defendants conspired to limit the supply of containerboard, and that the purpose and effect of the alleged conspiracy was to artificially increase prices of containerboard products during the period from August 2005 to the time of filing of the complaints.
The complaint was filed as a purported class action suit on behalf of all purchasers of containerboard products during such period.
The complaint seeks treble damages and costs, including attorney’s fees.
The defendants’ motions to dismiss the complaint were denied by the court in April 2011.
PCA believes the allegations are without merit and will defend this lawsuit vigorously.
However, as the lawsuit is in the early stages of discovery, PCA is unable to predict the ultimate outcome or estimate a range of reasonably possible losses.
PCA is a party to various other legal actions arising in the ordinary course of our business.
These legal actions cover a broad variety of claims spanning our entire business.
As of the date of this filing, we believe it is not reasonably possible that the resolution of these legal actions will, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.
NOTE 18 EQUITY COMMON STOCK On February 8, 2010, we raised $3.0 billion in new common equity through the issuance of 55.6 million shares of common stock in an underwritten offering at $54 per share.
The underwriters exercised their option to purchase an additional 8.3 million shares of common stock at the offering price of $54 per share, totaling approximately $450 million, to cover over-allotments.
We completed this issuance on March 11, 2010.
PREFERRED STOCK Information related to preferred stock is as follows: Preferred Stock – Issued and Outstanding
## Table 1 ##
Our Series B preferred stock is cumulative and is not redeemable at our option.
Annual dividends on Series B preferred stock total $1.80 per share.
Holders of Series B preferred stock are entitled to 8 votes per share, which is equal to the number of full shares of common stock into which the Series B Preferred Stock is convertible.
Our Series K preferred stock was issued in May 2008 in connection with our issuance of $500 million of Depositary Shares, each representing a fractional interest in a share of the Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock, Series K.  Dividends are payable if and when declared each May 21 and November 21 until May 21, 2013.
After that date, dividends will be payable each 21st of August, November, February and May.
Dividends will be paid at a rate of 8.25% prior to May 21, 2013 and at a rate of three-month LIBOR plus 422 basis points beginning May 21, 2013.
The Series K preferred stock is redeemable at our option on or after May 21, 2013.
Our 9.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series L was issued in connection with the National City transaction in exchange for National City’s Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F.  Dividends on the Series L preferred stock are payable if and when declared each 1st of February, May, August and November.
Dividends will be paid at a rate of 9.875% prior to February 1, 2013 and at a rate of three-month LIBOR plus 633 basis points beginning February 1, 2013.
The Series L is redeemable at PNC’s option, subject to Federal Reserve approval, if then applicable, on or after February 1, 2013 at a redemption price per share equal to the liquidation preference plus any declared but unpaid dividends.
Our Series O preferred stock was issued on July 27, 2011, when we issued one million depositary shares, each representing a 1/100th interest in a share of our Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series O for gross proceeds before commissions and expenses of $1 billion.
Dividends are payable when, as, and if declared by our board of directors or an authorized committee of our board, semi-annually on February 1 and August 1 of each year until August 1, 2021 at a rate of 6.75%.
After that date, dividends will be payable on February 1, May 1, August 1 and November 1 of each year beginning on November 1, 2021 at a rate of three-month LIBOR plus 3.678% per annum.
The Series O preferred stock is redeemable at our option on or after August 1, 2021 and at our option within 90 days of a regulatory capital treatment event as defined in the designations.
We have authorized but unissued Series H, I, J and M preferred stock.
As described in Note 13 Capital Securities of Subsidiary Trusts and Perpetual Trust Securities, under the terms of two of the hybrid capital vehicles we issued that currently qualify as capital for regulatory purposes (the Trust II Securities and the Trust III Securities), these Trust Securities are automatically exchangeable into shares of PNC preferred stock (Series I and Series J, respectively) in each case under certain conditions relating to the capitalization or the financial condition of PNC Bank, N. A.  and upon the direction of the Office of the Comptroller of the Currency.
The Series preferred stock of PNC REIT Corp.  is also automatically exchangeable under similar conditions into shares of PNC Series H preferred stock.
As a part of the National City transaction, we established the PNC Non-Cumulative Perpetual Preferred Stock, Series M, which mirrors in all material respects the former National City Non-Cumulative Perpetual Preferred Stock, Series E.  PNC has designated 5,751 preferred shares, liquidation value $100,000 per share, for this series.
No shares have yet been issued; however, National City issued stock purchase contracts for 5,001 shares of its Series E Preferred Stock (now replaced by the PNC Series M as part of the National City transaction) to the National City Preferred Capital Trust I in connection with the issuance by that Trust of $500 million of 12.000% Fixed-to-Floating Rate Normal Automatic Preferred Enhanced Capital Securities (the Normal APEX Securities) in January 2008 by the Trust.
It is expected that the Trust will purchase 5,001 of the Series M preferred shares pursuant to these stock purchase contracts on December 10, 2012 or on an earlier date and possibly as late as December 10, 2013.
The Trust has
The weighted-average assumptions used (as of the end of each year) to determine year end obligations for pension and postretirement benefits were as follows.
Table 74: Other Pension Assumptions
## Table 2 ##
The discount rates are determined independently for each plan by comparing the expected future benefits that will be paid under each plan with yields available on high quality corporate bonds of similar duration.
For this analysis, 10% of bonds with the highest yields and 40% with the lowest yields were removed from the bond universe.
The expected return on plan assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plan and the allocation strategy currently in place among those classes.
For purposes of setting and reviewing this assumption, “long- term” refers to the period over which the plan’s projected benefit obligations will be disbursed.
We review this assumption at each measurement date and adjust it if warranted.
Our selection process references certain historical data and the current environment, but primarily utilizes qualitative judgment regarding future return expectations.
We also examine the assumption used by other companies with similar pension investment strategies.
Taking into account all of these factors, the expected long-term return on plan assets for determining net periodic pension cost for 2018 was 6.00%.
We are reducing our expected long-term return on assets to 5.75% for determining pension cost for 2019.
This decision was made after considering the views of both internal and external capital market advisors, particularly with regard to the effects of the recent economic environment on long-term prospective equity and fixed income returns.
PNC’s net periodic benefit cost recognized for the plans is sensitive to the discount rate and expected long-term return on plan assets.
With all other assumptions held constant, a .5% decline in the discount rate would have resulted in an immaterial increase in net periodic benefit cost for the qualified pension plan in 2018, and to be recognized in 2019.
For the nonqualified pension plan and postretirement benefits, a .5% decline in the discount rate would also have resulted in an immaterial increase in net periodic benefit cost.
The health care cost trend rate assumptions shown in Tables 73 and 74 relate only to the postretirement benefit plans.
The effect of a one-percentage-point increase or decrease in assumed health care cost trend rates would be insignificant.
Defined Contribution Plans The PNC Incentive Savings Plan (ISP) is a qualified defined contribution plan that covers all of our eligible employees.
Effective January 1, 2015, newly-hired full time employees and part-time employees who became eligible to participate in the ISP after that date are automatically enrolled in the ISP with a deferral rate equal to 4% of eligible compensation in the absence of an affirmative election otherwise.
Employee benefits expense related to the ISP was $139 million in 2018, $125 million in 2017 and $122 million in 2016, representing cash contributed to the ISP by PNC.
The ISP is a 401(k) Plan and includes an employee stock ownership (ESOP) feature.
Employee contributions are invested in a number of investment options, including pre mixed portfolios and individual core funds, available under the ISP at the direction of the employee.
NOTE 12 STOCK BASED COMPENSATION PLANS We have long-term incentive award plans (Incentive Plans) that provide for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, incentive shares/performance units, restricted shares, restricted share units, other share-based awards and dollar-denominated awards to executives and, other than incentive stock options, to non-employee directors.
Certain Incentive Plan awards may be paid in stock, cash or a combination of stock and cash.
We typically grant a substantial portion of our stock-based compensation awards during the first quarter of each year.
SUMMARY OF LOAN LOSS EXPERIENCE
## Table 3 ##
(a) Includes automobile, education and other consumer.
(b) Includes $468 million in write-offs of purchased impaired loans in 2015 due to the change in derecognition policy effective December 31, 2016 for certain consumer purchased impaired loans.
See Note 1 Accounting Policies in our 2015 Form 10-K for additional information.
The following table presents the assignment of the allowance for loan and lease losses and the categories of loans as a percentage of total loans.
Changes in the allocation over time reflect the changes in loan portfolio composition, risk profile and refinements to reserve methodologies.
ALLOCATION OF ALLOWANCE FOR LOAN AND LEASE LOSSES
## Table 4 ##
(a) Includes automobile, education and other consumer.

<table><tr><td>Location</td><td>Function Kraft linerboard mill Kraft linerboard mill Semi-chemical medium mill Semi-chemical medium mill</td><td>Capacity (tons) 1,043,000 556,000 538,000 438,000</td></tr><tr><td>Counce, TN</td><td>Valdosta, GA</td><td>Tomahawk, WI</td></tr><tr><td>Filer City, MI</td></tr><tr><td>Total</td><td></td><td>2,575,000</td></tr></table>
<table><tr><td></td><td></td><td colspan="2"> Preferred Shares</td></tr><tr><td>December 31Shares in thousands</td><td>Liquidation value per share</td><td> 2011</td><td>2010</td></tr><tr><td>Authorized</td><td></td><td></td><td></td></tr><tr><td>$1 par value</td><td></td><td> 16,588</td><td>16,588</td></tr><tr><td>Issued and outstanding</td><td></td><td></td><td></td></tr><tr><td>Series B</td><td>$40</td><td> 1</td><td>1</td></tr><tr><td>Series K</td><td>10,000</td><td> 50</td><td>50</td></tr><tr><td>Series L</td><td>100,000</td><td> 2</td><td>2</td></tr><tr><td>Series O</td><td>100,000</td><td> 10</td><td></td></tr><tr><td>Total issued and outstanding</td><td></td><td> 63</td><td>53</td></tr></table>
<table><tr><td>Year ended December 31</td><td>2018</td><td>2017</td></tr><tr><td>Discount rate</td><td></td><td></td></tr><tr><td>Qualified pension</td><td>4.30%</td><td>3.60%</td></tr><tr><td>Nonqualified pension</td><td>4.15%</td><td>3.45%</td></tr><tr><td>Postretirement benefits</td><td>4.20%</td><td>3.55%</td></tr><tr><td>Rate of compensation increase (average)</td><td>3.50%</td><td>3.50%</td></tr><tr><td>Assumed health care cost trend rate</td><td></td><td></td></tr><tr><td>Initial trend</td><td>6.50%</td><td>6.75%</td></tr><tr><td>Ultimate trend</td><td>5.00%</td><td>5.00%</td></tr><tr><td>Year ultimate trend reached</td><td>2025</td><td>2025</td></tr></table>
<table><tr><td>Year ended December 31 – dollars in millions</td><td>2018</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Allowance for loan and lease losses – January 1</td><td>$2,611</td><td>$2,589</td><td>$2,727</td><td>$3,331</td><td>$3,609</td></tr><tr><td>Gross charge-offs</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>-108</td><td>-186</td><td>-332</td><td>-206</td><td>-276</td></tr><tr><td>Commercial real estate</td><td>-8</td><td>-24</td><td>-26</td><td>-44</td><td>-70</td></tr><tr><td>Equipment lease financing</td><td>-8</td><td>-11</td><td>-5</td><td>-5</td><td>-14</td></tr><tr><td>Home equity</td><td>-110</td><td>-123</td><td>-143</td><td>-181</td><td>-275</td></tr><tr><td>Residential real estate</td><td>-6</td><td>-9</td><td>-14</td><td>-24</td><td>-40</td></tr><tr><td>Credit card</td><td>-217</td><td>-182</td><td>-161</td><td>-160</td><td>-163</td></tr><tr><td>Other consumer (a)</td><td>-307</td><td>-251</td><td>-205</td><td>-185</td><td>-183</td></tr><tr><td>Total gross charge-offs</td><td>-764</td><td>-786</td><td>-886</td><td>-805</td><td>-1,021</td></tr><tr><td>Recoveries</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>67</td><td>81</td><td>117</td><td>170</td><td>207</td></tr><tr><td>Commercial real estate</td><td>24</td><td>28</td><td>51</td><td>66</td><td>84</td></tr><tr><td>Equipment lease financing</td><td>8</td><td>7</td><td>10</td><td>4</td><td>14</td></tr><tr><td>Home equity</td><td>98</td><td>91</td><td>84</td><td>93</td><td>78</td></tr><tr><td>Residential real estate</td><td>21</td><td>18</td><td>9</td><td>13</td><td>26</td></tr><tr><td>Credit card</td><td>24</td><td>21</td><td>19</td><td>21</td><td>21</td></tr><tr><td>Other consumer (a)</td><td>102</td><td>83</td><td>53</td><td>52</td><td>60</td></tr><tr><td>Total recoveries</td><td>344</td><td>329</td><td>343</td><td>419</td><td>490</td></tr><tr><td>Net (charge-offs)</td><td>-420</td><td>-457</td><td>-543</td><td>-386</td><td>-531</td></tr><tr><td>Provision for credit losses</td><td>408</td><td>441</td><td>433</td><td>255</td><td>273</td></tr><tr><td>Net decrease / (increase) in allowance for unfunded loan commitments andletters of credit</td><td>12</td><td>4</td><td>-40</td><td>-2</td><td>-17</td></tr><tr><td>Other (b)</td><td>18</td><td>34</td><td>12</td><td>-471</td><td>-3</td></tr><tr><td>Allowance for loan and lease losses – December 31</td><td>$2,629</td><td>$2,611</td><td>$2,589</td><td>$2,727</td><td>$3,331</td></tr><tr><td>Allowance as a percentage of December 31:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loans (b)</td><td>1.16%</td><td>1.18%</td><td>1.23%</td><td>1.32%</td><td>1.63%</td></tr><tr><td>Nonperforming loans</td><td>155%</td><td>140%</td><td>121%</td><td>128%</td><td>133%</td></tr><tr><td>As a percentage of average loans:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net charge-offs</td><td>.19%</td><td>.21%</td><td>.26%</td><td>.19%</td><td>.27%</td></tr><tr><td>Provision for credit losses</td><td>.18%</td><td>.20%</td><td>.21%</td><td>.12%</td><td>.14%</td></tr><tr><td>Allowance for loan and lease losses (b)</td><td>1.18%</td><td>1.20%</td><td>1.24%</td><td>1.33%</td><td>1.67%</td></tr><tr><td>Allowance as a multiple of net charge-offs</td><td>6.26x</td><td>5.71x</td><td>4.77x</td><td>7.06x</td><td>6.27x</td></tr></table>
<table><tr><td></td><td colspan="2">2018</td><td colspan="2">2017</td><td colspan="2">2016</td><td colspan="2">2015</td><td colspan="2">2014</td></tr><tr><td>December 31 dollars in millions</td><td>Allowance</td><td>Loans to Total Loans</td><td>Allowance</td><td>Loans to Total Loans</td><td>Allowance</td><td>Loans to Total Loans</td><td>Allowance</td><td>Loans to Total Loans</td><td>Allowance</td><td>Loans to Total Loans</td></tr><tr><td>Commercial</td><td>$1,350</td><td>51.6%</td><td>$1,302</td><td>50.1%</td><td>$1,179</td><td>48.1%</td><td>$1,286</td><td>47.7%</td><td>$1,209</td><td>47.6%</td></tr><tr><td>Commercial real estate</td><td>271</td><td>12.4</td><td>244</td><td>13.1</td><td>320</td><td>13.8</td><td>281</td><td>13.3</td><td>318</td><td>11.4</td></tr><tr><td>Equipment lease financing</td><td>42</td><td>3.2</td><td>36</td><td>3.6</td><td>35</td><td>3.6</td><td>38</td><td>3.6</td><td>44</td><td>3.7</td></tr><tr><td>Home equity</td><td>204</td><td>11.6</td><td>284</td><td>12.9</td><td>357</td><td>14.2</td><td>484</td><td>15.5</td><td>872</td><td>16.9</td></tr><tr><td>Residential real estate</td><td>297</td><td>8.3</td><td>300</td><td>7.8</td><td>332</td><td>7.4</td><td>307</td><td>7.0</td><td>561</td><td>7.0</td></tr><tr><td>Credit card</td><td>239</td><td>2.8</td><td>220</td><td>2.6</td><td>181</td><td>2.5</td><td>167</td><td>2.4</td><td>173</td><td>2.3</td></tr><tr><td>Other consumer (a)</td><td>226</td><td>10.1</td><td>225</td><td>9.9</td><td>185</td><td>10.4</td><td>164</td><td>10.5</td><td>154</td><td>11.1</td></tr><tr><td>Total</td><td>$2,629</td><td>100.0%</td><td>$2,611</td><td>100.0%</td><td>$2,589</td><td>100.0%</td><td>$2,727</td><td>100.0%</td><td>$3,331</td><td>100.0%</td></tr></table>

Question: What is the growing rate of Residential real estate of Recoveries in the year with the least Commercial real estate of Gross charge-offs?
Answer: -0.5