ADDITIONAL FINANCIAL INFORMATION OFF-BALANCE SHEET ARRANGEMENTS On December 31, 2016, other than operating leases, we had no material off-balance sheet arrangements.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS The following tables present information about our contractual obligations and commercial commitments on December 31, 2016:
## Table 0 ##
(a) Includes scheduled interest payments.
See Note J to the Consolidated Financial Statements in Item 8 for a discussion of long-term debt.
(b) Includes amounts committed under legally enforceable agreements for goods and services with defined terms as to quantity, price and timing of delivery.
This amount includes $16.3 billion of purchase obligations for products and services to be delivered under firm government contracts under which we would expect full recourse under normal contract termination clauses.
(c) Represents other long-term liabilities on our Consolidated Balance Sheet, including the current portion of these liabilities.
The projected timing of cash flows associated with these obligations is based on management’s estimates, which are based largely on historical experience.
This amount also includes all liabilities under our defined-benefit retirement plans.
See Note P to the Consolidated Financial Statements in Item 8 for information regarding these liabilities and the plan assets available to satisfy them.
## Table 1 ##
* See Note N to the Consolidated Financial Statements in Item 8 for a discussion of letters of credit.
APPLICATION OF CRITICAL ACCOUNTING POLICIES Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
The preparation of financial statements in accordance with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period.
On an ongoing basis, we evaluate our estimates, including most pervasively those related to various assumptions and projections for our long-term contracts and programs.
Other significant estimates include those related to goodwill and other intangible assets, income taxes, pension and other post-retirement benefits, workers’ compensation, warranty obligations and litigation and other contingencies.
We employ judgment in making our estimates but they are based on historical experience, currently available information and various other assumptions that we believe to be reasonable under the circumstances.
The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources.
Actual results may differ from these estimates.
We believe that our judgment is applied consistently and produces financial information that fairly depicts the results of operations for all periods presented.
In our opinion, the following policies are critical and require the use of significant judgment in their application: Revenue Recognition We account for revenue and earnings using the percentage-ofcompletion method.
Under this method, we recognize contract costs and revenue as the work progresses, either as the products are produced or as services are rendered.
We determine progress using either input measures (e. g. , costs incurred) or output measures (e. g. , contract milestones or units delivered), as appropriate to the circumstances.
An input measure is used in most cases unless an output measure is identified that is reliably determinable and representative of progress toward completion.
We estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit
Table 66: Commercial Lending Asset Quality Indicators (a)
## Table 2 ##
(a) Based upon PDs and LGDs.
(b) Pass Rated loans include loans not classified as “Special Mention”, “Substandard”, or “Doubtful”.
(c) Special Mention rated loans have a potential weakness that deserves management’s close attention.
If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects at some future date.
These loans do not expose us to sufficient risk to warrant a more adverse classification at this time.
(d) Substandard rated loans have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of debt.
They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.
(e) Doubtful rated loans possess all the inherent weaknesses of a Substandard rated loan with the additional characteristics that the weakness makes collection or liquidation in full improbable due to existing facts, conditions, and values.
(f) Loans are included above based on their contractual terms as “Pass”, “Special Mention”, “Substandard” or “Doubtful”.
CONSUMER LENDING ASSET CLASSES Home Equity and Residential Real Estate Loan Classes We use several credit quality indicators, including delinquency information, nonperforming loan information, updated credit scores, originated and updated LTV ratios, and geography, to monitor and manage credit risk within the home equity and residential real estate loan classes.
We evaluate mortgage loan performance by source originators and loan servicers.
A summary of asset quality indicators follows: Delinquency/Delinquency Rates: We monitor trending of delinquency/delinquency rates for home equity and residential real estate loans.
See the Asset Quality section of this Note 5 for additional information.
Nonperforming Loans: We monitor trending of nonperforming loans for home equity and residential real estate loans.
See the Asset Quality section of this Note 5 for additional information.
Credit Scores: We use a national third-party provider to update FICO credit scores for home equity loans and lines of credit and residential real estate loans on at least a quarterly basis.
The updated scores are incorporated into a series of credit management reports, which are utilized to monitor the risk in the loan classes.
LTV (inclusive of combined loan-to-value (CLTV) ratios for second lien positions): At least semi-annually, we update the property values of real estate collateral and calculate an updated LTV ratio.
For open-end credit lines secured by real estate in regions experiencing significant declines in property values, more frequent valuations may occur.
We examine LTV migration and stratify LTV into categories to monitor the risk in the loan classes.
Historically, we used, and we continue to use, a combination of original LTV and updated LTV for internal risk management reporting and risk management purposes (e. g. , line management, loss mitigation strategies).
In addition to the fact that estimated property values by their nature are estimates, given certain data limitations it is important to note that updated LTVs may be based upon management’s assumptions (e. g. , if an updated LTV is not provided by the third-party service provider, home price index (HPI) changes will be incorporated in arriving at management’s estimate of updated LTV).
Geography: Geographic concentrations are monitored to evaluate and manage exposures.
Loan purchase programs are sensitive to, and focused within, certain regions to manage geographic exposures and associated risks.
ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) (1) Our common stock is listed on the New York Stock Exchange and is traded under the symbol “PNC.
” At the close of business on February 15, 2013, there were 75,100 common shareholders of record.
Holders of PNC common stock are entitled to receive dividends when declared by the Board of Directors out of funds legally available for this purpose.
Our Board of Directors may not pay or set apart dividends on the common stock until dividends for all past dividend periods on any series of outstanding preferred stock have been paid or declared and set apart for payment.
The Board presently intends to continue the policy of paying quarterly cash dividends.
The amount of any future dividends will depend on economic and market conditions, our financial condition and operating results, and other factors, including contractual restrictions and applicable government regulations and policies (such as those relating to the ability of bank and nonbank subsidiaries to pay dividends to the parent company and regulatory capital limitations).
The amount of our dividend is also currently subject to the results of the Federal Reserve’s 2013 Comprehensive Capital Analysis and Review (CCAR) as part of its supervisory assessment of capital adequacy described under “Supervision and Regulation” in Item 1 of this Report.
The Federal Reserve has the power to prohibit us from paying dividends without its approval.
For further information concerning dividend restrictions and restrictions on loans, dividends or advances from bank subsidiaries to the parent company, see “Supervision and Regulation” in Item 1 of this Report, “Funding and Capital Sources” in the Consolidated Balance Sheet Review section, “Liquidity Risk Management” in the Risk Management section, and “Trust Preferred Securities” in the Off-Balance Sheet Arrangements And Variable Interest Entities section of Item 7 of this Report, and Note 14 Capital Securities of Subsidiary Trusts and Perpetual Trust Securities and Note 22 Regulatory Matters in the Notes To Consolidated Financial Statements in Item 8 of this Report, which we include here by reference.
We include here by reference additional information relating to PNC common stock under the caption “Common Stock Prices/Dividends Declared” in the Statistical Information (Unaudited) section of Item 8 of this Report.
We include here by reference the information regarding our compensation plans under which PNC equity securities are authorized for issuance as of December 31, 2012 in the table (with introductory paragraph and notes) that appears in Item 12 of this Report.
Our registrar, stock transfer agent, and dividend disbursing agent is: Computershare Trust Company, N. A.250 Royall Street Canton, MA 02021 800-982-7652 We include here by reference the information that appears under the caption “Common Stock Performance Graph” at the end of this Item 5.
(a)(2) None.
(b) Not applicable.
(c) Details of our repurchases of PNC common stock during the fourth quarter of 2012 are included in the following table: In thousands, except per share data
## Table 3 ##
(a) In addition to the repurchases of PNC common stock during the fourth quarter of 2012 included in the table above, PNC redeemed all 5,001 shares of its Series M Preferred Stock on December 10, 2012 as further described below.
As part of the National City transaction, we established the PNC Non-Cumulative Perpetual Preferred Stock, Series M (the “Series M Preferred Stock”), which mirrored in all material respects the former National City Non-Cumulative Perpetual Preferred Stock, Series E.  On December 10, 2012, PNC issued $500.1 million aggregate liquidation amount (5,001 shares) of the Series M Preferred Stock to the National City Preferred Capital Trust I (the “Trust”) as required pursuant to the settlement of a Stock Purchase Contract Agreement between the Trust and PNC dated as of January 30, 2008.
Immediately upon such issuance, PNC redeemed all 5,001 shares of the Series M Preferred Stock from the Trust on December 10, 2012 at a redemption price equal to $100,000 per share.
(b) Includes PNC common stock purchased under the program referred to in note (c) to this table and PNC common stock purchased in connection with our various employee benefit plans.
Note 15 Employee Benefit Plans and Note 16 Stock Based Compensation Plans in the Notes To Consolidated Financial Statements in Item 8 of this Report include additional information regarding our employee benefit plans that use PNC common stock.
(c) Our current stock repurchase program allows us to purchase up to 25 million shares on the open market or in privately negotiated transactions.
This program was authorized on October 4, 2007 and will remain in effect until fully utilized or until modified, superseded or terminated.
The extent and timing of share repurchases under this program will depend on a number of factors including, among others, market and general economic conditions, economic capital and regulatory capital considerations, alternative uses of capital, the potential impact on our credit ratings, and contractual and regulatory limitations, including the impact of the Federal Reserve’s supervisory assessment of capital adequacy program.

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Payments Due by Period
Contractual Obligations	Total Amount Committed	Less Than 1 Year	1-3 Years	4-5 Years	More Than 5 Years
Long-term debt (a)	$4,791	$991	$162	$661	$2,977
Capital lease obligations	30	2	5	4	19
Operating leases	1,187	241	339	164	443
Purchase obligations (b)	26,155	11,783	9,938	3,443	991
Other long-term liabilities (c)	18,169	3,004	2,287	1,783	11,095
$50,332	$16,021	$12,731	$6,055	$15,525

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Amount of Commitment Expiration by Period
Commercial Commitments	Total Amount Committed	Less Than 1 Year	1-3 Years	4-5 Years	More Than 5 Years
Letters of credit and guarantees*	$1,044	$560	$257	$68	$159

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Criticized Commercial Loans
In millions	PassRated (b)	Special Mention (c)	Substandard (d)	Doubtful (e)	TotalLoans
December 31, 2012
Commercial	$78,048	$1,939	$2,600	$145	$82,732
Commercial real estate	14,898	804	1,802	210	17,714
Equipment lease financing	7,062	68	112	5	7,247
Purchased impaired loans	49	60	852	288	1,249
Total commercial lending (f)	$100,057	$2,871	$5,366	$648	$108,942
December 31, 2011
Commercial	$60,649	$1,831	$2,817	$257	$65,554
Commercial real estate	11,478	791	2,823	400	15,492
Equipment lease financing	6,210	48	153	5	6,416
Purchased impaired loans	107	35	542	168	852
Total commercial lending (f)	$78,444	$2,705	$6,335	$830	$88,314

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2012 period (a)	Total sharespurchased (b)	Averagepricepaid pershare	Total sharespurchased aspartofpubliclyannouncedprograms (c)	Maximumnumber ofshares thatmay yet bepurchasedundertheprograms (c)
October 1 – 31	13	$60.05	22,552
November 1 – 30	750	$55.08	750	21,802
December 1 – 31	292	$55.74	251	21,551
Total	1,055	$55.32	1,001

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Question: In the year with lowest amount of Commercial for TotalLoans, what's the increasing rate of Equipment lease financing for TotalLoans?
Answer: 0.12952000000000002