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28 | What is the sum of the General, administrative and other expenses in the years where Production expenses, including related taxes is greater than 100? (in million) | <table><tr><td> For the Years Ended December 31</td><td> Total</td><td> United States</td><td> Europe (a)</td><td> Africa</td><td> Asia and Other (b)</td></tr><tr><td></td><td colspan="5"> (In millions)</td></tr><tr><td>2010</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Sales and other operating revenues</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unaffiliated customers</td><td>$8,601</td><td>$2,310</td><td>$2,251</td><td>$2,750</td><td>$1,290</td></tr><tr><td>Inter-company</td><td>143</td><td>143</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total revenues</td><td>8,744</td><td>2,453</td><td>2,251</td><td>2,750</td><td>1,290</td></tr><tr><td>Costs and expenses</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Production expenses, including related taxes</td><td>1,924</td><td>489</td><td>727</td><td>455</td><td>253</td></tr><tr><td>Exploration expenses, including dry holes and lease impairment</td><td>865</td><td>364</td><td>49</td><td>143</td><td>309</td></tr><tr><td>General, administrative and other expenses</td><td>281</td><td>161</td><td>48</td><td>20</td><td>52</td></tr><tr><td>Depreciation, depletion and amortization</td><td>2,222</td><td>649</td><td>463</td><td>772</td><td>338</td></tr><tr><td>Asset impairments</td><td>532</td><td>—</td><td>—</td><td>532</td><td>—</td></tr><tr><td>Total costs and expenses</td><td>5,824</td><td>1,663</td><td>1,287</td><td>1,922</td><td>952</td></tr><tr><td>Results of operations before income taxes</td><td>2,920</td><td>790</td><td>964</td><td>828</td><td>338</td></tr><tr><td>Provision for income taxes</td><td>1,425</td><td>305</td><td>477</td><td>580</td><td>63</td></tr><tr><td>Results of operations</td><td>$1,495</td><td>$485</td><td>$487</td><td>$248</td><td>$275</td></tr></table>
(a) Results of operations for oil and gas producing activities in Norway were as follows for the years ended December 31:
<table><tr><td></td><td>2012</td><td> <i>2011</i></td><td> <i>2010</i></td><td></td></tr><tr><td></td><td colspan="3"> <i>(In millions)</i></td><td></td></tr><tr><td><i>Sales and other operating revenues—Unaffiliated customers</i></td><td>$518</td><td>$996</td><td>$524</td><td><i></i></td></tr><tr><td><i>Costs and expenses</i></td><td></td><td></td><td></td><td></td></tr><tr><td><i>Production expenses, including related taxes</i></td><td>302</td><td>290</td><td>149</td><td><i></i></td></tr><tr><td><i>Exploration expenses, including dry holes and lease impairment</i></td><td>—</td><td>10</td><td>12</td><td><i></i></td></tr><tr><td><i>General, administrative and other expenses</i></td><td>10</td><td>9</td><td>9</td><td><i></i></td></tr><tr><td><i>Depreciation, depletion and amortization</i></td><td>139</td><td>232</td><td>133</td><td><i></i></td></tr><tr><td><i>Total costs and expenses</i></td><td>451</td><td>541</td><td>303</td><td><i></i></td></tr><tr><td><i>Results of operations before income taxes</i></td><td>67</td><td>455</td><td>221</td><td><i></i></td></tr><tr><td><i>Provision for income taxes</i></td><td>-82</td><td>295</td><td>154</td><td><i></i></td></tr><tr><td><i>Results of operations</i></td><td>$149</td><td>$160</td><td>$67</td><td><i></i></td></tr></table>
(b) Excludes a 2012 income tax charge of $86 million for a disputed application of an international tax treaty. Oil and Gas Reserves The Corporation’s proved oil and gas reserves are calculated in accordance with the Securities and Exchange Commission (SEC) regulations and the requirements of the Financial Accounting Standards Board. Proved oil and gas reserves are quantities, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from known reservoirs under existing economic conditions, operating methods and government regulations. The Corporation’s estimation of net recoverable quantities of liquid hydrocarbons and natural gas is a highly technical process performed by internal teams of geoscience professionals and reservoir engineers. Estimates of reserves were prepared by the use of appropriate geologic, petroleum engineering, and evaluation principals and techniques that are in accordance with practices generally recognized by the petroleum industry as presented in the publication of the Society of Petroleum Engineers entitled “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information (Revision as of February 19, 2007). ” The method or combination of methods used in the analysis of each reservoir is based on the maturity of the reservoir, the completeness of the subsurface data available at the time of the estimate, the stage of reservoir development and the production history. Where applicable, reliable technologies may be used in reserve estimation, as defined in the SEC regulations. These technologies, including computational methods, must have been field tested and demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. In order for reserves to be classified as proved, any required government approvals must be obtained and depending on the cost of the project, either senior management or the board of directors must commit to fund the development. The Corporation’s proved reserves are subject to certain risks and uncertainties, which are discussed in Item 1A, Risk Factors Related to Our Business and Operations of this Form 10-K. by net repayments of other debt of $53 million. During 2011, net proceeds from borrowings on available credit facilities were $422 million. During 2010, net proceeds from borrowings were $1,098 million, including the August 2010 issuance of $1,250 million of 30-year fixed-rate public notes with a coupon of 5.6% scheduled to mature in 2041. In January 2010, the Corporation completed the repurchase of the remaining $116 million of fixed-rate public notes that were scheduled to mature in 2011. Total common stock dividends paid were $171 million in 2012, $136 million in 2011 and $131 million in 2010. In 2012, the Corporation made five quarterly common stock dividend payments as a result of accelerating payment of the fourth quarter 2012 dividend, which historically would have been paid in the first quarter of 2013. The Corporation received net proceeds from the exercise of stock options, including related income tax benefits of $11 million, $88 million and $54 million in 2012, 2011 and 2010, respectively. Future Capital Requirements and Resources The Corporation anticipates investing a total of approximately $6.8 billion in capital and exploratory expenditures during 2013, substantially all of which is targeted for E&P operations. This reflects an 18 percent reduction from the 2012 total of $8.3 billion. The decrease is substantially attributable to a reduced level of spend in the Bakken driven by lower drilling and completion costs and decreased investments in infrastructure projects. During 2012, the Corporation funded its capital spending through cash flows from operations, incremental borrowings and proceeds from asset sales. The Corporation had a cash flow deficit of approximately $2.5 billion in 2012 and the projected deficit for 2013 is expected to moderate versus 2012 based on current commodity prices. During 2012, the Corporation announced asset sales totaling $2.4 billion, of which cash proceeds of $843 million were received in 2012 and approximately $440 million were received in January 2013. The Corporation is also pursuing the sale of its Russian operations, Eagle Ford assets and its terminal network. The Corporation expects to fund its 2013 capital expenditures and ongoing operations, including dividends, pension contributions and debt repayments with existing cash on-hand, cash flows from operations and proceeds from asset sales. Crude oil and natural gas prices are volatile and difficult to predict. In addition, unplanned increases in the Corporation’s capital expenditure program could occur. If conditions were to change, such as a significant decrease in commodity prices or an unexpected increase in capital expenditures, the Corporation would take steps to protect its financial flexibility and may pursue other sources of liquidity, including the issuance of debt securities, the issuance of equity securities, and/or further asset sales. See Overview on page 20 for a discussion of Elliott Management Corporation. The table below summarizes the capacity, usage, and available capacity of the Corporation’s borrowing and letter of credit facilities at December 31, 2012:
<table><tr><td></td><td> Expiration Date</td><td> Capacity</td><td> Borrowings</td><td> Letters of Credit Issued</td><td> Total Used</td><td> Available Capacity</td></tr><tr><td></td><td></td><td colspan="5"> (In millions)</td></tr><tr><td>Revolving credit facility</td><td>April 2016</td><td>$4,000</td><td>$758</td><td>$—</td><td>$758</td><td>$3,242</td></tr><tr><td>Asset-backed credit facility</td><td>July 2013 (a)</td><td>642</td><td>600</td><td>—</td><td>600</td><td>42</td></tr><tr><td>Committed lines</td><td>Various (b)</td><td>2,730</td><td>500</td><td>463</td><td>963</td><td>1,767</td></tr><tr><td>Uncommitted lines</td><td>Various (b)</td><td>773</td><td>490</td><td>283</td><td>773</td><td>—</td></tr><tr><td>Total</td><td></td><td>$8,145</td><td>$2,348</td><td>$746</td><td>$3,094</td><td>$5,051</td></tr></table>
(a) Total capacity of $1 billion subject to the amount of eligible receivables posted as collateral. (b) Committed and uncommitted lines have expiration dates through 2014. The Corporation has a $4 billion syndicated revolving credit facility that matures in April 2016. This facility can be used for borrowings and letters of credit. Borrowings on the facility bear interest at 1.25% above the London Interbank Offered Rate. A fee of 0.25% per annum is also payable on the amount of the facility. The interest rate and facility fee are subject to adjustment if the Corporation’s credit rating changes. The Corporation has a 364-day asset-backed credit facility secured by certain accounts receivable from its M&R operations. Under the terms of this financing arrangement, the Corporation has the ability to borrow or issue letters of credit of up to $1 billion subject to the availability of sufficient levels of eligible receivables. At December 31, 2012, outstanding borrowings under this facility of $600 million were collateralized by a total of HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 2010: In December, the Corporation acquired approximately 167,000 net acres in the Bakken oil shale play (Bakken) in North Dakota from TRZ Energy, LLC for $1,075 million in cash. In December, the Corporation also completed the acquisition of American Oil & Gas Inc. (American Oil & Gas) for approximately $675 million through the issuance of approximately 8.6 million shares of the Corporation’s common stock, which increased the Corporation’s acreage position in the Bakken by approximately 85,000 net acres. The properties acquired were located near the Corporation’s existing acreage. These acquisitions strengthened the Corporation’s acreage position in the Bakken, leveraged existing capabilities and infrastructure and are expected to contribute to future reserve and production growth. Both of these transactions were accounted for as business combinations and the majority of the fair value of the assets acquired was assigned to unproved properties. The total goodwill recorded on these transactions was $332 million after final post-closing adjustments. In September, the Corporation completed the exchange of its interests in Gabon and the Clair Field in the United Kingdom for additional interests of 28% and 25%, respectively, in the Valhall and Hod fields offshore Norway. This non-monetary exchange was accounted for as a business combination. The transaction resulted in a pre-tax gain of $1,150 million ($1,072 million after income taxes). The total combined carrying amount of the disposed assets prior to the exchange was $702 million, including goodwill of $65 million. The Corporation also acquired, from a different third party, additional interests of 8% and 13% in the Valhall and Hod fields, respectively, for $507 million in cash. This acquisition was accounted for as a business combination. As a result of both of these transactions, the Corporation’s total interests in the Valhall and Hod fields are 64% and 63%, respectively. The primary reason for these transactions was to acquire long-lived crude oil reserves and future production growth. For all the 2010 acquisitions and the exchange described above, the assets acquired and liabilities assumed were recorded at fair value. The estimated fair value for property, plant and equipment acquired in these transactions was based primarily on an income approach (Level 3 fair value measurement).4. Inventories Inventories at December 31 were as follows:
<table><tr><td></td><td>2012</td><td>2011</td></tr><tr><td></td><td colspan="2">(In millions)</td></tr><tr><td>Crude oil and other charge stocks</td><td>$493</td><td>$451</td></tr><tr><td>Refined petroleum products and natural gas</td><td>1,362</td><td>1,762</td></tr><tr><td>Less: LIFO adjustment</td><td>-1,123</td><td>-1,276</td></tr><tr><td></td><td>732</td><td>937</td></tr><tr><td>Merchandise, materials and supplies</td><td>527</td><td>486</td></tr><tr><td>Total inventories</td><td>$1,259</td><td>$1,423</td></tr></table>
The percentage of LIFO inventory to total crude oil, refined petroleum products and natural gas inventories was 71% and 72% at December 31, 2012 and 2011, respectively. During 2012 the Corporation reduced LIFO inventories, which are carried at lower costs than current inventory costs. The effect of the LIFO inventory liquidations was to decrease Cost of products sold by approximately $165 million in 2012 ($104 million after income taxes).5. HOVENSA L. L. C. Joint Venture The Corporation has a 50% interest in HOVENSA, a joint venture with a subsidiary of Petroleos de Venezuela, S. A. (PDVSA), which owns a refinery in St. Croix, U. S. Virgin Islands. In January 2012, HOVENSA shut down its refinery as a result of continued substantial operating losses due to global economic conditions and competitive disadvantages versus other refiners, despite efforts to improve operating performance by reducing refining capacity to 350,000 from 500,000 barrels per day in the first half of 2011. During 2012 and continuing into 2013, HOVENSA and the Government of the Virgin Islands engaged in discussions pertaining to HOVENSA’s plan to run the facility as an oil storage terminal while the Corporation and its joint venture partner pursue a sale of HOVENSA. Table of Contents VALERO ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Cash Flow Hedges Cash flow hedges are used to hedge price volatility in certain forecasted feedstock and refined product purchases, refined product sales, and natural gas purchases. The objective of our cash flow hedges is to lock in the price of forecasted feedstock, product or natural gas purchases or refined product sales at existing market prices that we deem favorable. As of December 31, 2011, we had the following outstanding commodity derivative instruments that were entered into to hedge forecasted purchases or sales of crude oil and refined products. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels). |
678,752.8997 | What will Interest Income reach in 2008 if it continues to grow at its current rate? | Interest expense related to capital lease obligations was $1.6 million during the year ended December 31, 2015, and $1.6 million during both the years ended December 31, 2014 and 2013. Purchase Commitments In the table below, we set forth our enforceable and legally binding purchase obligations as of December 31, 2015. Some of the amounts are based on management’s estimates and assumptions about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties, and other factors. Because these estimates and assumptions are necessarily subjective, our actual payments may vary from those reflected in the table. Purchase orders made in the ordinary course of business are excluded below. Any amounts for which we are liable under purchase orders are reflected on the Consolidated Balance Sheets as accounts payable and accrued liabilities. These obligations relate to various purchase agreements for items such as minimum amounts of fiber and energy purchases over periods ranging from one year to 20 years. Total purchase commitments were as follows (dollars in millions):
<table><tr><td>2016</td><td>$95.3</td></tr><tr><td>2017</td><td>60.3</td></tr><tr><td>2018</td><td>28.0</td></tr><tr><td>2019</td><td>28.0</td></tr><tr><td>2020</td><td>23.4</td></tr><tr><td>Thereafter</td><td>77.0</td></tr><tr><td>Total</td><td>$312.0</td></tr></table>
The Company purchased a total of $299.6 million, $265.9 million, and $61.7 million during the years ended December 31, 2015, 2014, and 2013, respectively, under these purchase agreements. The increase in purchases The increase in purchases under these agreements in 2014, compared with 2013, relates to the acquisition of Boise in fourth quarter 2013. Environmental Liabilities The potential costs for various environmental matters are uncertain due to such factors as the unknown magnitude of possible cleanup costs, the complexity and evolving nature of governmental laws and regulations and their interpretations, and the timing, varying costs and effectiveness of alternative cleanup technologies. From 2006 through 2015, there were no significant environmental remediation costs at PCA’s mills and corrugated plants. At December 31, 2015, the Company had $24.3 million of environmental-related reserves recorded on its Consolidated Balance Sheet. Of the $24.3 million, approximately $15.8 million related to environmental-related asset retirement obligations discussed in Note 12, Asset Retirement Obligations, and $8.5 million related to our estimate of other environmental contingencies. The Company recorded $7.9 million in “Accrued liabilities” and $16.4 million in “Other long-term liabilities” on the Consolidated Balance Sheet. Liabilities recorded for environmental contingencies are estimates of the probable costs based upon available information and assumptions. Because of these uncertainties, PCA’s estimates may change. The Company believes that it is not reasonably possible that future environmental expenditures for remediation costs and asset retirement obligations above the $24.3 million accrued as of December 31, 2015, will have a material impact on its financial condition, results of operations, or cash flows. Guarantees and Indemnifications We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At December 31, 2015, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is traded on the NYSE under the symbol “RJF”. At November 19, 2007 there were approximately 14,000 holders of the Company's common stock. The following table sets forth for the periods indicated the high and low trades for the common stock (as adjusted for the three-fortwo stock split in March 2006):
<table><tr><td></td><td colspan="2">2007</td><td colspan="2">2006</td></tr><tr><td></td><td>High</td><td>Low</td><td>High</td><td>Low</td></tr><tr><td>First Quarter</td><td>$ 33.63</td><td>$ 28.53</td><td>$ 25.72</td><td>$ 20.25</td></tr><tr><td>Second Quarter</td><td>32.52</td><td>27.38</td><td>31.45</td><td>24.47</td></tr><tr><td>Third Quarter</td><td>34.62</td><td>29.10</td><td>31.66</td><td>26.34</td></tr><tr><td>Fourth Quarter</td><td>36.00</td><td>28.65</td><td>30.57</td><td>26.45</td></tr></table>
See Quarterly Financial Information on page 87 of this report for the amount of the quarterly dividends paid. The Company expects to continue paying cash dividends. However, the payment and rate of dividends on the Company's common stock is subject to several factors including operating results, financial requirements of the Company, and the availability of funds from the Company's subsidiaries, including the brokerdealer subsidiaries, which may be subject to restrictions under the net capital rules of the SEC, FINRA and the IDA; and RJBank, which may be subject to restrictions by federal banking agencies. Such restrictions have never limited the Company's dividend payments. (See Note 19 of the Notes to Consolidated Financial Statements for more information on the capital restrictions placed on RJBank and the Company's broker-dealer subsidiaries). See Note 15 of the Notes to Consolidated Financial Statements for information regarding repurchased shares of the Company's common stock. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Factors Affecting “Forward-Looking Statements” From time to time, the Company may publish “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral statements that constitute forward-looking statements. These forwardlooking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, are discussed in the section entitled Risk Factors on page 42 of this report. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. Overview The following Management’s Discussion and Analysis is intended to help the reader understand the results of operations and the financial condition of the Company. Management’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, the Company’s consolidated financial statements and accompanying notes to the consolidated financial statements. The Company’s results continue to be highly correlated to the direction of the U. S. equity markets and are subject to volatility due to changes in interest rates, valuation of financial instruments, economic and political trends and industry competition. During 2007, the market was impacted by rising energy prices, a housing market slowdown, a subprime lending collapse, a growing economy, a weakening US dollar and stable interest rates. The Company’s Private Client Group’s recruiting and retention of Financial Advisors was positively impacted by industry consolidation. RJBank benefited from the widening interest rate spreads and the availability of attractive loan purchases as a result of the subprime lending crisis. Results of Operations - RJBank The following table presents consolidated financial information for RJBank for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2007</td><td>% Incr. (Decr.)</td><td>September 30, 2006</td><td>% Incr. (Decr.)</td><td>September 30, 2005</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Interest Earnings</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest Income</td><td>$ 278,248</td><td>144%</td><td>$ 114,065</td><td>153%</td><td>$ 45,017</td></tr><tr><td>Interest Expense</td><td>193,747</td><td>163%</td><td>73,529</td><td>234%</td><td>22,020</td></tr><tr><td>Net Interest Income</td><td>84,501</td><td>108%</td><td>40,536</td><td>76%</td><td>22,997</td></tr><tr><td>Other Income</td><td>1,324</td><td>111%</td><td>627</td><td>45%</td><td>431</td></tr><tr><td>Net Revenues</td><td>85,825</td><td>109%</td><td>41,163</td><td>76%</td><td>23,428</td></tr><tr><td>Non-Interest Expense</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee Compensation and Benefits</td><td>7,778</td><td>27%</td><td>6,135</td><td>14%</td><td>5,388</td></tr><tr><td>Communications and Information Processing</td><td>1,052</td><td>16%</td><td>907</td><td>14%</td><td>799</td></tr><tr><td>Occupancy and Equipment</td><td>719</td><td>14%</td><td>629</td><td>32%</td><td>478</td></tr><tr><td>Provision for Loan Losses and Unfunded</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commitments</td><td>32,150</td><td>134%</td><td>13,760</td><td>891%</td><td>1,388</td></tr><tr><td>Other</td><td>17,121</td><td>359%</td><td>3,729</td><td>218%</td><td>1,171</td></tr><tr><td>Total Non-Interest Expense</td><td>58,820</td><td>134%</td><td>25,160</td><td>173%</td><td>9,224</td></tr><tr><td>Pre-tax Earnings</td><td>$ 27,005</td><td>69%</td><td>$ 16,003</td><td>13%</td><td>$ 14,204</td></tr></table>
Year ended September 30, 2007 Compared with the Year ended September 30, 2006 - RJBank The Company completed its second bulk transfer of cash balances into the RJBank Deposit Program in March 2007, moving another $1.3 billion. This, combined with organic growth from the influx of new client assets, resulted in a $2.6 billion increase in average deposit balances. This increase in average deposit balances provided the funding for the $1.6 billion increase in average loan balances. This increase was 38% purchased residential mortgage pools and 62% corporate loans, 98% of which are purchased interests in corporate loan syndications with the remainder originated by RJBank. As a result of this growth, RJBank net interest income increased 108% to $84.5 million. Due to robust loan growth, the associated allowance for loan losses that are established upon recording a new loan and making new unfunded commitments required a provision of over $32 million in 2007. Accordingly, RJBank’s pre-tax income increased only 69%. During periods of growth when new loans are originated or purchased, an allowance for loan losses is established for potential losses inherent in those new loans. Accordingly, a robust period of growth generally results in charges to earnings in that period, while the benefits of higher interest earnings are realized in later periods. Year ended September 30, 2006 Compared with the Year ended September 30, 2005 - RJBank Assets at RJBank grew a substantial $1.8 billion during the year. The increase was driven by a $1.7 billion increase in deposits, $1.3 billion of which were redirected from the Company’s Heritage Cash Trust or customer brokerage accounts, representing the introduction of a new sweep program for certain brokerage accounts. This alternative offers clients a money market equivalent interest rate and FDIC insurance. The Company intends to expand this offering over the next several years, transferring an additional $2 to $4 billion. During the year, RJBank deployed $1.3 billion of the increased deposits into loans. Purchased residential loan pools increased $700 million and corporate loans increased $600 million. This growth, combined with increased rates, generated an increase in net interest income of nearly $18 million. Pre-tax income increased only $1.8 million, due to the $13.8 million provision for loan loss associated with the increase in loans outstanding |
24,611 | What is the sum of Net credit losses in 2009 and Gains on sales of real estate and other in 2006? (in million) | Sources of Liquidity Primary sources of liquidity for Citigroup and its principal subsidiaries include: ? deposits; ? collateralized financing transactions; ? senior and subordinated debt; ? commercial paper; ? trust preferred and preferred securities; and ? purchased/wholesale funds. Citigroup’s funding sources are diversified across funding types and geography, a benefit of its global franchise. Funding for Citigroup and its major operating subsidiaries includes a geographically diverse retail and corporate deposit base of $774.2 billion. These deposits are diversified across products and regions, with approximately two-thirds of them outside of the U. S. This diversification provides the Company with an important, stable and low-cost source of funding. A significant portion of these deposits has been, and is expected to be, long-term and stable, and are considered to be core. There are qualitative as well as quantitative assessments that determine the Company’s calculation of core deposits. The first step in this process is a qualitative assessment of the deposits. For example, as a result of the Company’s qualitative analysis certain deposits with wholesale funding characteristics are excluded from consideration as core. Deposits that qualify under the Company’s qualitative assessments are then subjected to quantitative analysis. Excluding the impact of changes in foreign exchange rates and the sale of our retail banking operations in Germany during the year ending December 31, 2008, the Company’s deposit base remained stable. On a volume basis, deposit increases were noted in Transaction Services, U. S. Retail Banking and Smith Barney. This was partially offset by the Company’s decision to reduce deposits considered wholesale funding, consistent with the Company’s de-leveraging efforts, and declines in International Consumer Banking and the Private Bank. Citigroup and its subsidiaries have historically had a significant presence in the global capital markets. The Company’s capital markets funding activities have been primarily undertaken by two legal entities: (i) Citigroup Inc. , which issues long-term debt, medium-term notes, trust preferred securities, and preferred and common stock; and (ii) Citigroup Funding Inc. (CFI), a first-tier subsidiary of Citigroup, which issues commercial paper, medium-term notes and structured equity-linked and credit-linked notes, all of which are guaranteed by Citigroup. Other significant elements of longterm debt on the Consolidated Balance Sheet include collateralized advances from the Federal Home Loan Bank system, long-term debt related to the consolidation of ICG’s Structured Investment Vehicles, asset-backed outstandings, and certain borrowings of foreign subsidiaries. Each of Citigroup’s major operating subsidiaries finances its operations on a basis consistent with its capitalization, regulatory structure and the environment in which it operates. Particular attention is paid to those businesses that for tax, sovereign risk, or regulatory reasons cannot be freely and readily funded in the international markets. Citigroup’s borrowings have historically been diversified by geography, investor, instrument and currency. Decisions regarding the ultimate currency and interest rate profile of liquidity generated through these borrowings can be separated from the actual issuance through the use of derivative instruments. Citigroup is a provider of liquidity facilities to the commercial paper programs of the two primary Credit Card securitization trusts with which it transacts. Citigroup may also provide other types of support to the trusts. As a result of the recent economic downturn, its impact on the cashflows of the trusts, and in response to credit rating agency reviews of the trusts, the Company increased the credit enhancement in the Omni Trust, and plans to provide additional enhancement to the Master Trust (see Note 23 to Consolidated Financial Statements on page 175 for a further discussion). This support preserves investor sponsorship of our card securitization franchise, an important source of liquidity. Banking Subsidiaries There are various legal limitations on the ability of Citigroup’s subsidiary depository institutions to extend credit, pay dividends or otherwise supply funds to Citigroup and its non-bank subsidiaries. The approval of the Office of the Comptroller of the Currency, in the case of national banks, or the Office of Thrift Supervision, in the case of federal savings banks, is required if total dividends declared in any calendar year exceed amounts specified by the applicable agency’s regulations. State-chartered depository institutions are subject to dividend limitations imposed by applicable state law. In determining the declaration of dividends, each depository institution must also consider its effect on applicable risk-based capital and leverage ratio requirements, as well as policy statements of the federal regulatory agencies that indicate that banking organizations should generally pay dividends out of current operating earnings. Non-Banking Subsidiaries Citigroup also receives dividends from its non-bank subsidiaries. These non-bank subsidiaries are generally not subject to regulatory restrictions on dividends. However, as discussed in “Capital Resources and Liquidity” on page 94, the ability of CGMHI to declare dividends can be restricted by capital considerations of its broker-dealer subsidiaries. CGMHI’s consolidated balance sheet is liquid, with the vast majority of its assets consisting of marketable securities and collateralized short-term financing agreements arising from securities transactions. CGMHI monitors and evaluates the adequacy of its capital and borrowing base on a daily basis to maintain liquidity and to ensure that its capital base supports the regulatory capital requirements of its subsidiaries. Some of Citigroup’s non-bank subsidiaries, including CGMHI, have credit facilities with Citigroup’s subsidiary depository institutions, including Citibank, N. A. Borrowings under these facilities must be secured in accordance with Section 23A of the Federal Reserve Act. There are various legal restrictions on the extent to which a bank holding company and certain of its non-bank subsidiaries can borrow or obtain credit from Citigroup’s subsidiary depository institutions or engage in certain other transactions with them. In general, these restrictions require that transactions be on arm’s length terms and be secured by designated amounts of specified collateral. See Note 20 to the Consolidated Financial Statements on page 169. At December 31, 2008, long-term debt and commercial paper outstanding for Citigroup, CGMHI, CFI and Citigroup’s subsidiaries were as follows:
<table><tr><td><i>In billions of dollars</i></td><td>Citigroup parent company</td><td>CGMHI<sup>-2</sup></td><td>Citigroup Funding Inc.<sup>-2</sup></td><td>Other Citigroup subsidiaries</td><td></td></tr><tr><td>Long-term debt</td><td>$192.3</td><td>$20.6</td><td>$37.4</td><td>$109.3</td><td><sup></sup><sup>-1</sup></td></tr><tr><td>Commercial paper</td><td>$—</td><td>$—</td><td>$28.6</td><td>$0.5</td><td></td></tr></table>
(1) At December 31, 2008, approximately $67.4 billion relates to collateralized advances from the Federal Home Loan Bank. (2) Citigroup Inc. guarantees all of CFI’s debt and CGMHI’s publicly issued securities. Citi Holdings contains businesses and portfolios of assets that Citigroup has determined are not central to its core Citicorp businesses. Consistent with its strategy, Citi intends to exit these businesses as quickly as practicable in an economically rational manner through business divestitures, portfolio run-offs and asset sales. During 2009 and 2010, Citi made substantial progress divesting and exiting businesses from Citi Holdings, having completed more than 30 divestiture transactions, including Smith Barney, Nikko Cordial Securities, Nikko Asset Management, Primerica Financial Services, various credit card businesses (including Diners Club North America) and The Student Loan Corporation (which is reported as discontinued operations within the Corporate/Other segment for the second half of 2010 only). Citi Holdings’ GAAP assets of $359 billion have been reduced by $128 billion from December 31, 2009, and $468 billion from the peak in the first quarter of 2008. Citi Holdings’ GAAP assets of $359 billion represent approximately 19% of Citi’s assets as of December 31, 2010. Citi Holdings’ risk-weighted assets of approximately $330 billion represent approximately 34% of Citi’s risk-weighted assets as of December 31, 2010. Citi Holdings consists of the following: Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool.
<table><tr><td>In millions of dollars</td><td>2010</td><td>2009</td><td>2008</td><td>% Change 2010 vs. 2009</td><td>% Change 2009 vs. 2008</td></tr><tr><td>Net interest revenue</td><td>$14,773</td><td>$16,139</td><td>$21,092</td><td>-8%</td><td>-23%</td></tr><tr><td>Non-interest revenue</td><td>4,514</td><td>12,989</td><td>-29,330</td><td>-65</td><td>NM</td></tr><tr><td>Total revenues, net of interest expense</td><td>$19,287</td><td>$29,128</td><td>$-8,238</td><td>-34%</td><td>NM</td></tr><tr><td>Provisions for credit losses and for benefits and claims</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net credit losses</td><td>$19,070</td><td>$24,585</td><td>$14,026</td><td>-22%</td><td>75%</td></tr><tr><td>Credit reserve build (release)</td><td>-3,500</td><td>5,305</td><td>11,258</td><td>NM</td><td>-53</td></tr><tr><td>Provision for loan losses</td><td>$15,570</td><td>$29,890</td><td>$25,284</td><td>-48%</td><td>18%</td></tr><tr><td>Provision for benefits and claims</td><td>813</td><td>1,094</td><td>1,228</td><td>-26</td><td>-11</td></tr><tr><td>Provision (release) for unfunded lending commitments</td><td>-82</td><td>106</td><td>-172</td><td>NM</td><td>NM</td></tr><tr><td>Total provisions for credit losses and for benefits and claims</td><td>$16,301</td><td>$31,090</td><td>$26,340</td><td>-48%</td><td>18%</td></tr><tr><td>Total operating expenses</td><td>$9,563</td><td>$13,764</td><td>$24,104</td><td>-31</td><td>-43%</td></tr><tr><td>Loss from continuing operations before taxes</td><td>$-6,577</td><td>$-15,726</td><td>$-58,682</td><td>58%</td><td>73%</td></tr><tr><td>Benefits for income taxes</td><td>-2,554</td><td>-6,878</td><td>-22,185</td><td>63</td><td>69</td></tr><tr><td>(Loss) from continuing operations</td><td>$-4,023</td><td>$-8,848</td><td>$-36,497</td><td>55%</td><td>76%</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>207</td><td>29</td><td>-372</td><td>NM</td><td>NM</td></tr><tr><td>Citi Holdings net loss</td><td>$-4,230</td><td>$-8,877</td><td>$-36,125</td><td>52%</td><td>75%</td></tr><tr><td>Balance sheet data(in billions of dollars)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total EOP assets</td><td>$359</td><td>$487</td><td>$650</td><td>-26%</td><td>-25%</td></tr><tr><td>Total EOP deposits</td><td>$79</td><td>$89</td><td>$81</td><td>-11%</td><td>10%</td></tr></table>
receipt in 2005, of a $10 million termination fee associated with one property that left our system. The favorable items noted above were also partially offset by $146 million of increased general and administrative expenses and $46 million of lower synthetic fuel revenue net of synthetic fuel expenses. Increased general, administrative and other expenses were associated with our Lodging segments as unallocated general, administrative and other expenses were down slightly compared to the prior year. The increase in general, administrative and other expenses reflects a $94 million charge impacting our North American Full-Service and International Lodging segments, primarily due to the non-cash write-off of deferred contract acquisition costs associated with the termination of management agreements associated with our acquisition of the CTF properties, and $30 million of expenses associated with our bedding incentive program, impacting our North American Full-Service, North American Limited-Service and International Lodging segments. General, administrative and other expenses in 2005 also reflect pre-tax performance termination cure payments of $15 million associated with two properties, a $9 million pre-tax charge associated with three guarantees, increased other net overhead costs of $13 million including costs related to the Company’s unit growth, development and systems, and $2 million of increased foreign exchange losses partially offset by $5 million of lower litigation expenses. Additionally, in 2004, general, administrative and other expenses included a $13 million charge associated with the write-off of deferred contract acquisition costs. Operating income for 2005 included a synthetic fuel operating loss of $144 million versus a $98 million operating loss in the prior year, reflecting increased costs and the consolidation of our synthetic fuel operations from the start of the 2004 second quarter, which resulted in the recognition of revenue and expenses for all of 2005 versus only three quarters in 2004, as we accounted for the synthetic fuel operations using the equity method of accounting in the 2004 first quarter. For additional information, see our “Synthetic Fuel” segment discussion later in this report. Gains and Other Income The following table shows our gains and other income for 2006, 2005 and 2004.
<table><tr><td> <i>($ in millions)</i></td><td>2006</td><td> 2005</td><td> 2004</td></tr><tr><td>Timeshare segment note sale gains</td><td>$—</td><td>$69</td><td>$64</td></tr><tr><td>Synthetic fuel earn-out payments (made) received, net</td><td>-15</td><td>32</td><td>28</td></tr><tr><td>Loss on expected land sale</td><td>-37</td><td>—</td><td>—</td></tr><tr><td>Gains on sales of real estate and other</td><td>26</td><td>34</td><td>48</td></tr><tr><td>Other note sale/repayment gains</td><td>2</td><td>25</td><td>5</td></tr><tr><td>Gains on sale/income on redemption of joint venture investments</td><td>68</td><td>7</td><td>19</td></tr><tr><td>Income from cost method joint ventures</td><td>15</td><td>14</td><td>—</td></tr><tr><td></td><td>$59</td><td>$181</td><td>$164</td></tr></table>
Gains on sale/income on redemption of joint venture investments of $68 million in 2006 represents $43 million of net gains associated with the sale of joint venture investments and $25 million of income associated with the redemption of preferred stock we held in one investee. As further explained in the earlier “Revenues” discussion for 2006, Timeshare segment note sale gains of $77 million in 2006 are presented in the “Timeshare sales and services” revenue caption. Interest Expense 2006 COMPARED TO 2005 Interest expense increased $18 million (17 percent) to $124 million in 2006 from $106 million in 2005. Included within interest expense for 2006 are charges totaling $46 million relating to interest on accumulated cash inflows, in advance of our cash outflows for various programs that we operate on the owners’ behalf, including the Marriott Rewards, Gift Certificates and SelfInsurance programs. The increase in interest on these programs over 2005 is related to higher liability balances and higher interest rates. Interest expense also increased in 2006, due to our June 2005 Series F Notes issuance, our June 2006 Series H Notes issuance, and higher commercial paper balances coupled with higher rates. Partially offsetting these increases were interest expense declines associated with the payoff, at maturity, of both our Series D Notes in April 2005 and Series B Notes in November 2005, and the exchange of our Series C and Series E Notes for lower interest rate Series G Notes in 2005.2005 COMPARED TO 2004 Interest expense increased $7 million (7 percent) to $106 million in 2005 from $99 million in the prior year, reflecting increased debt levels, which helped to facilitate significantly higher capital expenditures and share repurchases in 2005. Interest expense in 2005 reflected our June 2005 Series F Notes issuance and, versus the prior year, higher commercial paper balances coupled with higher rates. Included within interest expense for 2005 are charges totaling $29 million relating to interest on accumulated cash inflows, in advance of our cash outflows for various programs that we operate on the owners’ behalf, including the Marriott Rewards, Gift Certificates and Self-Insurance programs. The increase over 2004 is related to higher liability balances and higher interest rates. Partially offsetting these increases were interest expense declines associated with the payoff, at maturity, of both our Series D Notes in April 2005 and Series B Notes in November 2005, and the capitalization of more interest associated with the development of timeshare properties. Interest Income, Provision for Loan Losses, and Income Tax 2006 COMPARED TO 2005 Interest income, before the provision for loan losses, decreased $34 million (43 percent) to $45 million in 2006 from $79 million in 2005, primarily reflecting the impact of loans repaid to us in 2005. Also reflected in the decrease versus the prior year are $4 million of mark-to-market expenses in 2006 associated with hedges for our synthetic fuel operations. Loan loss provisions decreased $31 million versus the prior year reflecting the reversal of loan loss provisions totaling $3 million in 2006 compared to a charge of $17 million in 2005 due to the impairment of our Delta Air Lines, Inc. aircraft leveraged lease, see the “Investment in Leveraged Lease” caption later in this report for additional information, and an $11 million loan loss provision in 2005 associated with one property. Our tax provision totaled $286 million in 2006 compared to a tax provision of $94 million in 2005. The difference of $192 million is primarily attributable to $96 million of higher taxes in 2006 associated with higher pre-tax income from our lodging operations and $96 million of lower tax credits and tax benefit in 2006 associated with our synthetic fuel operations that generated a net tax benefit of $94 million in 2006 compared to a net tax benefit of $190 million in 2005. As discussed in more detail in the “Synthetic Fuel” segment caption later in this report, 2006 includes a provision for an estimated 39 percent |
312,324 | What is the difference between the greatest Premiums earned in As previously reported in 2015 and 2014? | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS):
<table><tr><td>CONSOLIDATED STATEMENTS OF OPERATIONS</td><td colspan="3">Twelve Months Ended December 31, 2015</td><td colspan="3">Twelve Months Ended December 31, 2014</td></tr><tr><td>AND COMPREHENSIVE INCOME (LOSS):</td><td></td><td rowspan="2">Effect of adoption of new accounting policy</td><td></td><td></td><td rowspan="2">Effect of adoption of new accounting policy</td><td></td></tr><tr><td></td><td>As previously reported</td><td>As adopted</td><td>As previously reported</td><td>As adopted</td></tr><tr><td>(Dollars in thousands)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>REVENUES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Premiums earned</td><td>$5,481,459</td><td>$-188,617</td><td>$5,292,842</td><td>$5,169,135</td><td>$-125,428</td><td>$5,043,707</td></tr><tr><td>Net investment income</td><td>473,825</td><td>-352</td><td>473,473</td><td>530,570</td><td>-85</td><td>530,485</td></tr><tr><td>Other income (expense)</td><td>60,435</td><td>27,845</td><td>88,280</td><td>18,437</td><td>13,871</td><td>32,308</td></tr><tr><td>Total revenues</td><td>5,837,889</td><td>-161,124</td><td>5,676,765</td><td>5,790,589</td><td>-111,642</td><td>5,678,947</td></tr><tr><td>CLAIMS AND EXPENSES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Incurred losses and loss adjustment expenses</td><td>3,101,915</td><td>-37,200</td><td>3,064,715</td><td>2,906,534</td><td>-30,598</td><td>2,875,936</td></tr><tr><td>Commission, brokerage, taxes and fees</td><td>1,202,036</td><td>-18,390</td><td>1,183,646</td><td>1,135,586</td><td>-14,441</td><td>1,121,145</td></tr><tr><td>Other underwriting expenses</td><td>265,984</td><td>-8,915</td><td>257,069</td><td>240,400</td><td>-7,296</td><td>233,104</td></tr><tr><td>Total claims and expenses</td><td>4,629,380</td><td>-64,505</td><td>4,564,875</td><td>4,344,474</td><td>-52,335</td><td>4,292,139</td></tr><tr><td>INCOME (LOSS) BEFORE TAXES</td><td>1,208,509</td><td>-96,619</td><td>1,111,890</td><td>1,446,115</td><td>-59,307</td><td>1,386,808</td></tr><tr><td>NET INCOME (LOSS)</td><td>1,074,488</td><td>-96,619</td><td>977,869</td><td>1,258,463</td><td>-59,307</td><td>1,199,156</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>-96,619</td><td>96,619</td><td>-</td><td>-59,307</td><td>59,307</td><td>-</td></tr><tr><td>NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP</td><td>977,869</td><td>-977,869</td><td>-</td><td>1,199,156</td><td>-1,199,156</td><td>-</td></tr></table>
<table><tr><td>CONSOLIDATED STATEMENT OF CASH FLOWS:</td><td colspan="3">Twelve Months Ended December 31, 2015</td><td colspan="3">Twelve Months Ended December 31, 2014</td></tr><tr><td>(Dollars in thousands)</td><td>As previously reported</td><td>Effect of adoption of new accounting policy</td><td>As adopted</td><td>As previously reported</td><td>Effect of adoption of new accounting policy</td><td>As adopted</td></tr><tr><td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income (loss)</td><td>$1,074,488</td><td>$-96,619</td><td>$977,869</td><td>$1,258,463</td><td>$-59,307</td><td>$1,199,156</td></tr><tr><td>Decrease (increase) in premiums receivable</td><td>-93,837</td><td>-4,374</td><td>-98,211</td><td>45,282</td><td>3,089</td><td>48,371</td></tr><tr><td>Decrease (increase) in funds held by reinsureds, net</td><td>31,225</td><td>-75,000</td><td>-43,775</td><td>-1,835</td><td>-</td><td>-1,835</td></tr><tr><td>Decrease (increase) in reinsurance receivables</td><td>-240,414</td><td>-24,689</td><td>-265,103</td><td>-186,014</td><td>-24,634</td><td>-210,648</td></tr><tr><td>Decrease (increase) in prepaid reinsurance premiums</td><td>-14,486</td><td>-7,333</td><td>-21,819</td><td>-79,086</td><td>956</td><td>-78,130</td></tr><tr><td>Increase (decrease) in other net payable to reinsurers</td><td>38,262</td><td>5,465</td><td>43,727</td><td>29,410</td><td>-1,102</td><td>28,308</td></tr><tr><td>Change in other assets and liabilities, net</td><td>264</td><td>-9,198</td><td>-8,934</td><td>35,419</td><td>-178,054</td><td>-142,635</td></tr><tr><td>Net cash provided by (used in) operating activities</td><td>1,308,382</td><td>-211,748</td><td>1,096,634</td><td>1,313,821</td><td>-259,059</td><td>1,054,762</td></tr><tr><td>CASH FLOWS FROM INVESTING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net change in short-term investments</td><td>-98,903</td><td>440,636</td><td>341,733</td><td>-497,983</td><td>421,500</td><td>-76,483</td></tr><tr><td>Net cash provided by (used in) investing activities</td><td>-1,121,737</td><td>440,636</td><td>-681,101</td><td>-1,180,072</td><td>421,500</td><td>-758,572</td></tr><tr><td>CASH FLOWS FROM FINANCING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Third party investment in redeemable noncontrolling interest</td><td>266,848</td><td>-266,848</td><td>-</td><td>136,200</td><td>-136,200</td><td>-</td></tr><tr><td>Subscription advances for third party redeemable noncontrolling interest</td><td>30,000</td><td>-30,000</td><td>-</td><td>40,000</td><td>-40,000</td><td>-</td></tr><tr><td>Dividends paid on third party investment in redeemable noncontrolling interest</td><td>-68,158</td><td>68,158</td><td>-</td><td>-10,334</td><td>10,334</td><td>-</td></tr><tr><td>Net cash provided by (used in) financing activities</td><td>-332,879</td><td>-228,690</td><td>-561,569</td><td>-312,232</td><td>-165,866</td><td>-478,098</td></tr><tr><td>EFFECT OF EXCHANGE RATE CHANGES ON CASH</td><td>-7,582</td><td>-198</td><td>-7,780</td><td>4,575</td><td>3,425</td><td>8,000</td></tr></table>
CONSOLIDATED STATEMENT OF CASH FLOWS: The following table presents a reconciliation of beginning and ending reserve balances for the periods indicated on a GAAP basis:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Gross reserves at beginning of period</td><td>$9,951.8</td><td>$9,720.8</td><td>$9,673.2</td></tr><tr><td>Incurred related to:</td><td></td><td></td><td></td></tr><tr><td>Current year</td><td>3,434.9</td><td>3,129.7</td><td>2,915.6</td></tr><tr><td>Prior years</td><td>-295.3</td><td>-65.0</td><td>-39.7</td></tr><tr><td>Total incurred losses</td><td>3,139.6</td><td>3,064.7</td><td>2,875.9</td></tr><tr><td>Paid related to:</td><td></td><td></td><td></td></tr><tr><td>Current year</td><td>745.6</td><td>690.0</td><td>755.9</td></tr><tr><td>Prior years</td><td>2,043.0</td><td>2,180.1</td><td>2,088.8</td></tr><tr><td>Total paid losses</td><td>2,788.6</td><td>2,870.1</td><td>2,844.7</td></tr><tr><td>Foreign exchange/translation adjustment</td><td>-99.9</td><td>-190.0</td><td>-160.7</td></tr><tr><td>Change in reinsurance receivables on unpaid losses and LAE</td><td>109.4</td><td>226.4</td><td>176.9</td></tr><tr><td>Gross reserves at end of period</td><td>$10,312.3</td><td>$9,951.8</td><td>$9,720.8</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table>
Incurred prior years’ reserves decreased by $295.3 million, $65.0 million and $39.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. The decrease for 2016 was attributable to favorable development in the reinsurance segments of $468.7 million related primarily to property and short-tail business in the U. S. , property business in Canada, Latin America, Middle East and Africa, as well as favorable development on prior year catastrophe losses, partially offset by $53.9 million of adverse development on A&E reserves. Part of the favorable development in the reinsurance segments related to the 2015 loss from the explosion at the Chinese port of Tianjin. In 2015, this loss was originally estimated to be $60.0 million. At December 31, 2016, this loss was projected to be $16.7 million resulting in $43.3 million of favorable development in 2016. The net favorable development in the reinsurance segments was partially offset by $173.4 million of unfavorable development in the insurance segment primarily related to run-off construction liability and umbrella program business. The decrease for 2015 was attributable to favorable development in the reinsurance segments of $217.2 million related to treaty casualty and treaty property reserves, partially offset by $152.1 million of unfavorable development in the insurance segment primarily related to umbrella program and construction liability business. The decrease for 2014 was attributable to favorable development in the reinsurance segments of $202.4 million related to treaty casualty, treaty property and catastrophe reserves, partially offset by $137.8 million development on A&E reserves and $25.0 million of unfavorable development in the insurance segment primarily related to umbrella program and construction liability business. Since the Company has operations in many countries, part of the Company’s loss and LAE reserves are in foreign currencies and translated to U. S. dollars for each reporting period. Fluctuations in the exchange rates for the currencies, period over period, affect the U. S. dollar amount of outstanding reserves. The translation adjustment line at the bottom of the table eliminates the impact of the exchange fluctuations from the reserve re-estimates. The Company’s loss reserving methodologies continuously monitor the emergence of loss and loss development trends, seeking, on a timely basis, to both adjust reserves for the impact of trend shifts and to factor the impact of such shifts into the Company’s underwriting and pricing on a prospective basis. Reserves for Asbestos and Environmental Losses and LAE. At December 31, 2016, the Company’s gross reserves for A&E claims represented 4.3% of its total reserves. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. Liabilities related to Mt. McKinley’s direct business, which had been ceded to Bermuda Re previously, were retroceded to an affiliate of Clearwater Insurance Company in July 2015, concurrent with the sale of Mt. McKinley to Clearwater Insurance Company. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims and ultimate values cannot be estimated using traditional reserving techniques. See ITEM 7, “Management’s Discussion Other expense, net increased $0.8 million to $7.2 million in 2015 from $6.4 million in 2014. This increase was due to higher net losses on the combined foreign currency exchange rate changes on transactions denominated in foreign currencies and our foreign currency derivative financial instruments in 2015. Provision for income taxes increased $19.9 million to $154.1 million in 2015 from $134.2 million in 2014. Our effective tax rate was 39.9% in 2015 compared to 39.2% in 2014. Our effective tax rate for 2015 was higher than the effective tax rate for 2014 primarily due to increased non-deductible costs incurred in connection with our Connected Fitness acquisitions in 2015. Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 Net revenues increased $752.3 million, or 32.3%, to $3,084.4 million in 2014 from $2,332.1 million in 2013. Net revenues by product category are summarized below: |
-2 | What is the difference between the greatest Sales Volumes in 2009 and 2008？ | Reconciliation of U. S. Federal Statutory Income Tax Rate to Actual Income Tax Rate The following table reconciles the U. S. statutory tax rate to our effective income tax rate:
<table><tr><td></td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td>U.S. statutory tax rate</td><td>35.0%</td><td>35.0%</td><td>-35.0%</td></tr><tr><td>U.S. state income taxes, net of U.S. federal tax benefit</td><td>2.3</td><td>2.4</td><td>-2.1</td></tr><tr><td>Nondeductible expenses</td><td>1.8</td><td>0.5</td><td>0.5</td></tr><tr><td>Non-U.S. income</td><td>-0.9</td><td>-3.7</td><td>5.2</td></tr><tr><td>Audit activity<sup>-1</sup></td><td>0.0</td><td>-15.6</td><td>13.7</td></tr><tr><td>Company owned life insurance</td><td>0.0</td><td>0.0</td><td>-2.0</td></tr><tr><td>Change in valuation allowance<sup>-2</sup></td><td>8.9</td><td>0.9</td><td>2.2</td></tr><tr><td>Tax credits</td><td>-1.0</td><td>-0.4</td><td>-0.4</td></tr><tr><td>Other, net</td><td>-1.7</td><td>-2.3</td><td>2.3</td></tr><tr><td>Effective rate</td><td>44.4%</td><td>16.8%</td><td>-15.6%</td></tr></table>
(1) Primarily related to the treatment of funds received from certain non-U. S. subsidiaries, as discussed earlier in this footnote. (2) Primarily related to additional impairment of certain deferred tax assets transferred to MVW, as discussed earlier in this footnote. Cash paid for income taxes, net of refunds, was $45 million in 2011, $68 million in 2010, and $110 million in 2009.3. SHARE-BASED COMPENSATION Under our 2002 Comprehensive Stock and Cash Incentive Plan (the “Comprehensive Plan”), we award: (1) stock options to purchase our Class A Common Stock (“Stock Option Program”); (2) stock appreciation rights (“SARs”) for our Class A Common Stock (“SAR Program”); (3) restricted stock units (“RSUs”) of our Class A Common Stock; and (4) deferred stock units. We grant awards at exercise prices or strike prices equal to the market price of our Class A Common Stock on the date of grant. For all share-based awards, the guidance requires that we measure compensation costs related to our share-based payment transactions at fair value on the grant date and that we recognize those costs in the financial statements over the vesting period during which the employee provides service in exchange for the award. Effective with the spin-off (see Footnote No.17, "Spin-off" for further information), all holders of Marriott RSUs on the November 10, 2011 date of record for the spin-off received MVW RSUs consistent with the distribution ratio, with terms and conditions substantially similar to the terms and conditions applicable to the Marriott RSUs. Also, effective with the spin-off, the holders of Marriott stock options and SARs on the date of record received MVW stock options and SARs, consistent with the distribution ratio, with terms and conditions substantially similar to the terms and conditions applicable to the Marriott stock options and SARs. In order to preserve the aggregate intrinsic value of the Marriott stock options and SARs held by such persons, the exercise prices of such awards were adjusted by using the proportion of the Marriott ex-distribution closing stock price to the sum of the total of the Marriott ex-distribution and MVW when issued closing stock prices on the distribution date. All of these adjustments were designed to equalize the fair value of each award before and after spin-off. These adjustments were accounted for as modifications to the original awards. A comparison of the fair value of the modified awards with the fair value of the original awards immediately before the modification did not yield incremental value. Accordingly, Marriott did not record any incremental compensation expense as a result of the modifications to the awards on the spin-off date. Marriott's future share-based compensation expense will not be significantly impacted by the equity award adjustments that occurred as a result of the spin-off. Deferred compensation costs as of the date of spin-off reflected the unamortized balance of the original grant date fair value of the equity awards held by Marriott employees (regardless of whether those awards are linked to Marriott stock or MVW stock). Following the spin-off, MVW employees who participated in the Comprehensive Plan prior to the spin-off may continue to hold such Marriott granted awards as non-employees. Marriott will not record any share-based compensation expense related to these unvested awards held by MVW employees after the spin-off. During 2011, we granted 2.6 million RSUs, 0.7 million SARs, and 29,000 deferred stock units. We recorded share-based compensation expense related to award grants of $86 million in 2011, $90 million in 2010, and $85 million in 2009. Deferred compensation costs related to unvested awards totaled $101 million and $113 million at yearend 2011 and 2010, respectively. As of year-end 2011, we expect to recognize these deferred compensation expenses over a Altria Group, Inc. and Subsidiaries Notes to Consolidated Financial Statements The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at December 31, 2014 was $207 million, along with $51 million affecting deferred taxes. However, the impact on net earnings at December 31, 2014 would be $177 million, as a result of the net receivable from Altria Group, Inc. ’s former subsidiary, Philip Morris International Inc. (“PMI”), of $30 million discussed below. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate at December 31, 2013 was $212 million, along with $15 million affecting deferred taxes. However, the impact on net earnings at December 31, 2013 would be $173 million, as a result of net receivables from Altria Group, Inc. ’s former subsidiaries Kraft Foods Inc. (now known as International, Inc. and PMI of $9 million and $30 million, respectively, discussed below. Under tax sharing agreements entered into in connection with the 2007 and 2008 spin-offs between Altria Group, Inc. and its former subsidiaries and PMI, respectively, and PMI are responsible for their respective pre-spin-off tax obligations. Altria Group, Inc. , however, remains severally liable for s and PMI’s pre-spin-off federal tax obligations pursuant to regulations governing federal consolidated income tax returns, and continues to include the pre-spin-off federal income tax reserves of PMI of $30 million in its liability for uncertain tax positions. Altria Group, Inc. also includes corresponding receivables/payables from/to PMI in its other assets and other liabilities on Altria Group, Inc. ’s consolidated balance sheet at December 31, 2014. As of December 31, 2014, there are no remaining pre-spin-off tax reserves related to During 2014 and 2013, Altria Group, Inc. recorded net tax benefits of $2 million and $22 million, respectively, for tax matters, primarily relating to the IRS audit of Altria Group, Inc. and its consolidated subsidiaries’ 2007-2009 tax years. During 2012, Altria Group, Inc. recorded an additional income tax provision of $52 million for and PMI tax matters, primarily as a result of the closure in August 2012 of the IRS audit of Altria Group, Inc. and its consolidated subsidiaries’ 2004-2006 tax years (“IRS 2004-2006 Audit”). The net tax benefits of $2 million and $22 million for the years ended December 31, 2014 and 2013, respectively, were offset by the recording of corresponding net payables to which were recorded as a decrease to operating income on Altria Group, Inc. ’s consolidated statements of earnings for the years ended December 31, 2014 and 2013, respectively. The additional income tax provision of $52 million for the year ended December 31, 2012 was offset by increases to the corresponding receivables from and PMI, which were recorded as increases to operating income on Altria Group, Inc. ’s consolidated statement of earnings for the year ended December 31, 2012. Due to these offsets, the and PMI tax matters had no impact on Altria Group, Inc. ’s net earnings for the years ended December 31, 2014, 2013 and 2012. Altria Group, Inc. recognizes accrued interest and penalties associated with uncertain tax positions as part of the tax provision. At December 31, 2014, Altria Group, Inc. had $57 million of accrued interest and penalties, of which approximately $7 million related to PMI, for which PMI is responsible under its tax sharing agreement. At December 31, 2013, Altria Group, Inc. had $48 million of accrued interest and penalties, of which approximately $2 million and $6 million related to and PMI, respectively, for which and PMI are responsible under their respective tax sharing agreements. The corresponding receivables/payables from/to and PMI were included in assets and liabilities on Altria Group, Inc. ’s consolidated balance sheets at December 31, 2014 and 2013. For the years ended December 31, 2014, 2013 and 2012, Altria Group, Inc. recognized in its consolidated statements of earnings $14 million, $5 million and $(88) million, respectively, of gross interest expense (income) associated with uncertain tax positions. Altria Group, Inc. is subject to income taxation in many jurisdictions. Uncertain tax positions reflect the difference between tax positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. Resolution of the related tax positions with the relevant tax authorities may take many years to complete, and such timing is not entirely within the control of Altria Group, Inc. It is reasonably possible that within the next 12 months certain examinations will be resolved, which could result in a decrease in unrecognized tax benefits of approximately $139 million, a portion of which would relate to the unrecognized tax benefits of PMI, for which Altria Group, Inc. is indemnified by PMI under its tax sharing agreement. The effective income tax rate on pre-tax earnings differed from the U. S. federal statutory rate for the following reasons for the years ended December 31, 2014, 2013 and 2012:
<table><tr><td></td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>U.S. federal statutory rate</td><td>35.0%</td><td>35.0%</td><td>35.0%</td></tr><tr><td>Increase (decrease) resulting from:</td><td></td><td></td><td></td></tr><tr><td>State and local income taxes, netof federal tax benefit</td><td>4.0</td><td>3.8</td><td>3.5</td></tr><tr><td>Uncertain tax positions</td><td>0.5</td><td>0.7</td><td>-0.7</td></tr><tr><td>SABMiller dividend benefit</td><td>-2.3</td><td>-2.0</td><td>-0.1</td></tr><tr><td>Domestic manufacturing deduction</td><td>-2.4</td><td>-2.7</td><td>-2.0</td></tr><tr><td>Other</td><td>—</td><td>-0.1</td><td>-0.3</td></tr><tr><td>Effective tax rate</td><td>34.8%</td><td>34.7%</td><td>35.4%</td></tr></table>
The tax provision in 2014 included net tax benefits of (i) $14 million from the reversal of tax accruals no longer required that was recorded during the third quarter of 2014 ($19 million), partially offset by additional tax provisions recorded during the fourth quarter of 2014 ($5 million); and (ii) $2 million for tax matters discussed above. The tax provision in 2013 included net tax benefits of (i) $39 million from the reversal of tax accruals no longer required that was recorded during the third quarter of 2013 ($25 million) and fourth quarter of 2013 ($14 million); (ii) $25 million related to the recognition of previously unrecognized foreign tax credits primarily associated with SABMiller dividends that were recorded during the fourth quarter of 2013; and (iii) $22 million ÿþ" I t e m 8 . F i n a n c i a l S t a t e m e n t s a n d S u p p l e m e n t a r y D a t a S u p p l e m e n t a r y O i l a n d G a s I n f o r m a t i o n ( U n a u d i t e d ) f o r a d d i t i o n a l i n f o r m a t i o n r e g a r d i n g e s t i m a t e s o f c r u d e o i l a n d n a t u r a l g a s r e s e r v e s , i n c l u d i n g e s t i m a t e s o f p r o v e d , p r o v e d d e v e l o p e d , a n d p r o v e d u n d e v e l o p e d r e s e r v e s , t h e s t a n d a r d i z e d m e a s u r e o f d i s c o u n t e d f u t u r e n e t c a s h f l o w s , a n d t h e c h a n g e s i n t h e s t a n d a r d i z e d m e a s u r e o f d i s c o u n t e d f u t u r e n e t c a s h f l o w s . O t h e r R e s e r v e s I n f o r m a t i o n S i n c e J a n u a r y 1 , 2 0 0 9 , n o c r u d e o i l o r n a t u r a l g a s r e s e r v e s i n f o r m a t i o n h a s b e e n f i l e d w i t h , o r i n c l u d e d i n a n y r e p o r t t o , a n y f e d e r a l a u t h o r i t y o r a g e n c y o t h e r t h a n t h e S E C a n d t h e E n e r g y I n f o r m a t i o n A d m i n i s t r a t i o n ( E I A ) o f t h e U S D e p a r t m e n t o f E n e r g y . W e f i l e F o r m 2 3 , i n c l u d i n g r e s e r v e s a n d o t h e r i n f o r m a t i o n , w i t h t h e E I A . S a l e s V o l u m e s , P r i c e a n d C o s t D a t a S a l e s v o l u m e s , p r i c e a n d c o s t d a t a a r e a s f o l l o w s : @ T @ ( 1 ) A v e r a g e p r o d u c t i o n c o s t i n c l u d e s o i l a n d g a s o p e r a t i n g c o s t s a n d w o r k o v e r a n d r e p a i r e x p e n s e a n d e x c l u d e s p r o d u c t i o n a n d a d v a l o r e m t a x e s . ( 2 ) A v e r a g e c r u d e o i l s a l e s p r i c e s r e f l e c t r e d u c t i o n s o f $ 2 . 1 3 p e r B b l ( 2 0 0 9 ) , $ 2 2 . 0 6 p e r B b l ( 2 0 0 8 ) , a n d $ 1 3 . 6 8 p e r B b l ( 2 0 0 7 ) f r o m h e d g i n g a c t i v i t i e s . A v e r a g e n a t u r a l g a s s a l e s p r i c e s r e f l e c t i n c r e a s e s o f $ 0 . 2 3 p e r M c f ( 2 0 0 8 ) ,
<table><tr><td></td><td colspan="3">Sales Volumes</td><td colspan="3">Average Sales Price</td><td rowspan="2">ProductionCost-1 Per BOE</td></tr><tr><td></td><td>Crude Oil MBpd</td><td>Natural Gas MMcfpd</td><td>NGLs MBpd</td><td>Crude Oil Per Bbl</td><td>Natural Gas Per Mcf</td><td>NGLs Per Bbl</td></tr><tr><td>Year Ended December 31, 2009</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>United States</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Wattenberg Field</td><td>15</td><td>150</td><td>6</td><td>$55.57</td><td>$3.59</td><td>$29.10</td><td>$3.01</td></tr><tr><td>Other US</td><td>22</td><td>247</td><td>4</td><td>54.92</td><td>3.62</td><td>26.37</td><td>8.50</td></tr><tr><td>Total US-2</td><td>37</td><td>397</td><td>10</td><td>55.19</td><td>3.61</td><td>27.96</td><td>6.26</td></tr><tr><td>Alba Field (Equatorial Guinea)(3)</td><td>14</td><td>239</td><td>-</td><td>55.94</td><td>0.27</td><td>-</td><td>2.30</td></tr><tr><td>Israel</td><td>-</td><td>114</td><td>-</td><td>-</td><td>3.47</td><td>-</td><td>1.36</td></tr><tr><td>North Sea</td><td>7</td><td>5</td><td>-</td><td>59.51</td><td>5.75</td><td>-</td><td>15.81</td></tr><tr><td>Ecuador</td><td>-</td><td>26</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>China</td><td>4</td><td>-</td><td>-</td><td>54.40</td><td>-</td><td>-</td><td>6.75</td></tr><tr><td>Total Consolidated Operations</td><td>62</td><td>781</td><td>10</td><td>55.76</td><td>2.54</td><td>27.96</td><td>$5.05</td></tr><tr><td>Equity Investee-4</td><td>2</td><td>-</td><td>6</td><td>59.51</td><td>-</td><td>36.03</td><td></td></tr><tr><td>Total</td><td>64</td><td>781</td><td>16</td><td>$55.87</td><td>$2.54</td><td>$31.20</td><td></td></tr><tr><td>Year Ended December 31, 2008</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>United States</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Wattenberg Field</td><td>15</td><td>146</td><td>5</td><td>$71.41</td><td>$7.39</td><td>$52.19</td><td>$3.12</td></tr><tr><td>Other US</td><td>25</td><td>249</td><td>4</td><td>78.02</td><td>8.55</td><td>$47.51</td><td>7.91</td></tr><tr><td>Total US-2</td><td>40</td><td>395</td><td>9</td><td>75.53</td><td>8.12</td><td>$50.15</td><td>6.08</td></tr><tr><td>Alba Field (Equatorial Guinea)(3)</td><td>15</td><td>206</td><td>-</td><td>88.95</td><td>0.27</td><td>-</td><td>2.17</td></tr><tr><td>Israel</td><td>-</td><td>139</td><td>-</td><td>-</td><td>3.10</td><td>-</td><td>1.07</td></tr><tr><td>North Sea</td><td>10</td><td>5</td><td>-</td><td>100.56</td><td>10.54</td><td>-</td><td>12.63</td></tr><tr><td>Ecuador</td><td>-</td><td>22</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>China</td><td>4</td><td>-</td><td>-</td><td>82.66</td><td>-</td><td>-</td><td>7.03</td></tr><tr><td>Total Consolidated Operations</td><td>69</td><td>767</td><td>9</td><td>82.60</td><td>5.04</td><td>50.15</td><td>$4.90</td></tr><tr><td>Equity Investee-4</td><td>2</td><td>-</td><td>6</td><td>96.77</td><td>-</td><td>58.81</td><td></td></tr><tr><td>Total</td><td>71</td><td>767</td><td>15</td><td>$82.96</td><td>$5.04</td><td>$53.45</td><td></td></tr><tr><td>Year Ended December 31, 2007</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>United States</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Wattenberg Field</td><td>13</td><td>163</td><td>-</td><td>$68.19</td><td>$5.52</td><td>$-</td><td>$2.68</td></tr><tr><td>Other US</td><td>29</td><td>249</td><td>-</td><td>46.76</td><td>8.82</td><td>-</td><td>6.72</td></tr><tr><td>Total US-2</td><td>42</td><td>412</td><td>-</td><td>53.22</td><td>7.51</td><td>-</td><td>5.26</td></tr><tr><td>Alba Field (Equatorial Guinea)(3)</td><td>15</td><td>132</td><td>-</td><td>71.27</td><td>0.29</td><td>-</td><td>2.89</td></tr><tr><td>Israel</td><td>-</td><td>111</td><td>-</td><td>-</td><td>2.79</td><td>-</td><td>1.14</td></tr><tr><td>North Sea</td><td>13</td><td>6</td><td>-</td><td>76.47</td><td>6.54</td><td>-</td><td>7.68</td></tr><tr><td>Ecuador</td><td>-</td><td>26</td><td>-</td><td>-</td><td>-</td><td>-</td><td>-</td></tr><tr><td>China</td><td>4</td><td></td><td></td><td>58.79</td><td></td><td></td><td>7.08</td></tr><tr><td>Argentina-5</td><td>3</td><td>-</td><td>-</td><td>46.79</td><td>-</td><td>-</td><td>11.79</td></tr><tr><td>Total Consolidated Operations</td><td>77</td><td>687</td><td>-</td><td>60.61</td><td>5.26</td><td>-</td><td>$4.62</td></tr><tr><td>Equity Investee-4</td><td>2</td><td>-</td><td>6</td><td>74.87</td><td>-</td><td>48.87</td><td></td></tr><tr><td>Total</td><td>79</td><td>687</td><td>6</td><td>$60.94</td><td>$5.26</td><td>$48.87</td><td></td></tr></table>
stable, solid form, which meets regulatory requirements, can be deposited in our secure disposal cells. In some cases, hazardous waste can be treated before disposal. Generally, these treatments involve the separation or removal of solid materials from liquids and chemical treatments that transform waste into inert materials that are no longer hazardous. Our hazardous waste landfills are sited, constructed and operated in a manner designed to provide longterm containment of waste. We also operate a hazardous waste facility at which we isolate treated hazardous waste in liquid form by injection into deep wells that have been drilled in rock formations far below the base of fresh water to a point that is separated by other substantial geological confining layers. We owned or operated 271 solid waste and six hazardous waste landfills at December 31, 2007 and we owned or operated 277 solid waste and six hazardous waste landfills at December 31, 2006. The landfills that we operate but do not own are generally operated under a lease agreement or an operating contract. The differences between the two arrangements usually relate to the owner of the landfill operating permit. Under lease agreements, the permit typically is in our name and we operate the landfill for its entire life, making payments to the lessor based either on a percentage of revenue or a rate per ton of waste received. We are usually responsible for the closure and post-closure obligations of the landfills we lease. For operating contracts, the property owner owns the permit and we operate the landfill for a contracted term, which may be the life of the landfill. The property owner is generally responsible for closure and post-closure obligations under our operating contracts. Based on remaining permitted airspace as of December 31, 2007 and projected annual disposal volumes, the weighted average remaining landfill life for all of our owned or operated landfills is approximately 30 years. Many of our landfills have the potential for expanded disposal capacity beyond what is currently permitted. We monitor the availability of permitted disposal capacity at each of our landfills and evaluate whether to pursue an expansion at a given landfill based on estimated future waste volumes and prices, remaining capacity and likelihood of obtaining an expansion permit. We are currently seeking expansion permits at 54 of our landfills for which we consider expansions to be likely. Although no assurances can be made that all future expansions will be permitted or permitted as designed, the weighted average remaining landfill life for all owned or operated landfills is approximately 37 years when considering remaining permitted airspace, expansion airspace and projected annual disposal volume. Remaining permitted airspace and expansion airspace are defined in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report under “— Critical Accounting Estimates and Assumptions. ” At December 31, 2007 and 2006, the expected remaining capacity in cubic yards and tonnage of waste that can be accepted at our owned or operated landfills is shown below (in millions): |
210,184 | what's the total amount of U.S. of As of December 31, 2014, and Client deposits of December 31, 2014 ? | countries which totaled between .75% and 1% of our consolidated total assets at December 31, 2009 amounted to $1.26 billion (Italy). Aggregate cross-border outstandings to countries which totaled between .75% and 1% of our consolidated total assets at December 31, 2008 amounted to $3.45 billion (Canada and Germany). There were no cross-border outstandings to countries which totaled between .75% and 1% of our consolidated total assets as of December 31, 2007. Capital The management of regulatory and economic capital both involve key metrics evaluated by management to assess whether our actual level of capital is commensurate with our risk profile, is in compliance with all regulatory requirements, and is sufficient to provide us with the financial flexibility to undertake future strategic business initiatives. Regulatory Capital Our objective with respect to regulatory capital management is to maintain a strong capital base in order to provide financial flexibility for our business needs, including funding corporate growth and supporting customers’ cash management needs, and to provide protection against loss to depositors and creditors. We strive to maintain an optimal level of capital, commensurate with our risk profile, on which an attractive return to shareholders is expected to be realized over both the short and long term, while protecting our obligations to depositors and creditors and satisfying regulatory capital adequacy requirements. Our capital management process focuses on our risk exposures, our regulatory capital requirements, the evaluations of the major independent credit rating agencies that assign ratings to our public debt and our capital position relative to our peers. Our Capital Committee, working in conjunction with our Asset and Liability Committee, referred to as ALCO, oversees the management of regulatory capital, and is responsible for ensuring capital adequacy with respect to regulatory requirements, internal targets and the expectations of the major independent credit rating agencies. The primary regulator of both State Street and State Street Bank for regulatory capital purposes is the Federal Reserve. Both State Street and State Street Bank are subject to the minimum capital requirements established by the Federal Reserve and defined in the Federal Deposit Insurance Corporation Improvement Act of 1991. State Street Bank must meet the regulatory capital thresholds for “well capitalized” in order for the parent company to maintain its status as a financial holding company. Regulatory capital ratios and related regulatory guidelines for State Street and State Street Bank were as follows as of December 31:
<table><tr><td></td><td colspan="2">REGULATORY GUIDELINES</td><td colspan="2">STATE STREET</td><td colspan="2"> STATE STREET BANK</td></tr><tr><td></td><td>Minimum</td><td>Well Capitalized</td><td>2009</td><td>2008 -2</td><td>2009</td><td> 2008<sup>-2</sup></td></tr><tr><td>Regulatory capital ratios:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tier 1 risk-based capital</td><td>4%</td><td>6%</td><td>17.7%</td><td>20.3%</td><td>17.3%</td><td>19.8%</td></tr><tr><td>Total risk-based capital</td><td>8</td><td>10</td><td>19.1</td><td>21.6</td><td>19.0</td><td>21.3</td></tr><tr><td>Tier 1 leverage ratio<sup>-1</sup></td><td>4</td><td>5</td><td>8.5</td><td>7.8</td><td>8.2</td><td>7.6</td></tr></table>
(1) Regulatory guideline for well capitalized applies only to State Street Bank. (2) Tier 1 and total risk-based capital and tier 1 leverage ratios exclude the impact, where applicable, of the asset-backed commercial paper purchased under the Federal Reserve’s AMLF, as permitted by the AMLF’s terms and conditions. At December 31, 2009, State Street’s and State Street Bank’s tier 1 and total risk-based capital ratios decreased compared to year-end 2008. With respect to State Street, the loss associated with the May 2009 conduit consolidation and the June 2009 redemption of the equity received from the U. S. Treasury in connection with the TARP Capital Purchase Program, partly offset by the aggregate impact of the May 2009 public offering MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) on a number of factors, including, but not limited to, the level of housing prices and the timing of defaults. To the extent that such factors differ significantly from management's current expectations, resulting loss estimates may differ materially from those stated. Excluding other-than-temporary impairment recorded in 2014, management considers the aggregate decline in fair value of the remaining investment securities and the resulting gross unrealized losses as of December 31, 2014 to be temporary and not the result of any material changes in the credit characteristics of the securities. Additional information about these gross unrealized losses is provided in note 3 to the consolidated financial statements included under Item 8 of this Form 10-K. Loans and Leases TABLE 26: U. S. AND NON- U. S. LOANS AND LEASES
<table><tr><td></td><td colspan="5">As of December 31,</td></tr><tr><td>(In millions)</td><td>2014</td><td>2013</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Institutional:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>$14,908</td><td>$10,623</td><td>$9,645</td><td>$7,115</td><td>$7,001</td></tr><tr><td>Non-U.S.</td><td>3,263</td><td>2,654</td><td>2,251</td><td>2,478</td><td>4,192</td></tr><tr><td>Commercial real estate:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>28</td><td>209</td><td>411</td><td>460</td><td>764</td></tr><tr><td>Total loans and leases</td><td>$18,199</td><td>$13,486</td><td>$12,307</td><td>$10,053</td><td>$11,957</td></tr><tr><td>Average loans and leases</td><td>$15,912</td><td>$13,781</td><td>$11,610</td><td>$12,180</td><td>$12,094</td></tr></table>
The increase in loans in the institutional segment as of December 31, 2014 as compared to December 31, 2013 was primarily driven by higher levels of short-duration advances and increased investment in the non-investment-grade lending market through participations in loan syndications, specifically senior secured bank loans. Short-duration advances to our clients included in the institutional segment were $3.54 billion and $2.45 billion as of December 31, 2014 and 2013, respectively. These short-duration advances provide liquidity to fund clients in support of their transaction flows associated with securities settlement activities. As of December 31, 2014 and 2013, our investment in senior secured bank loans totaled approximately $2.07 billion and $724 million, respectively. In addition, we had binding unfunded commitments as of December 31, 2014 totaling $337 million to participate in such syndications. These senior secured bank loans, which we have rated “speculative” under our internal risk-rating framework (refer to note 4 to the consolidated financial statements included under Item 8 of this Form 10-K), are externally rated “BBB,” “BB” or “B,” with approximately 95% of the loans rated “BB” or “B” as of December 31, 2014, compared to 94% as of December 31, 2013. Our investment strategy involves limiting our investment to larger, more liquid credits underwritten by major global financial institutions, applying our internal credit analysis process to each potential investment, and diversifying our exposure by counterparty and industry segment. However, these loans have significant exposure to credit losses relative to higher-rated loans. As of December 31, 2014, our allowance for loan losses included approximately $26 million related to these senior secured bank loans. As this portfolio grows and becomes more seasoned, our allowance for loan losses related to these loans may increase through additional provisions for credit losses. As of December 31, 2014 and 2013, unearned income deducted from our investment in leveraged lease financing was $109 million and $121 million, respectively, for U. S. leases and $261 million and $298 million, respectively, for non-U. S. leases. The commercial real estate, or CRE, loans are composed of the loans acquired in 2008 pursuant to indemnified repurchase agreements with an affiliate of Lehman as a result of the Lehman Brothers bankruptcy. Additional information about all of our loan-and-lease segments, as well as underlying classes, is provided in note 4 to the consolidated financial statements included under Item 8 of this Form 10-K. The decrease in the CRE loans as of December 31, 2014 compared to December 31, 2013 resulted from one of the loans, acquired in 2008 pursuant to indemnified repurchase agreement with an affiliate of Lehman as a result of the Lehman Brothers bankruptcy being repaid. As of December 31, 2014 no CRE loans were modified in troubled debt restructurings. As of December 31, 2013, we held a CRE loan for approximately $130 million which had previously been modified in a troubled debt restructuring. No loans were modified in troubled debt restructurings in 2014 or 2013. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Funding Deposits: We provide products and services including custody, accounting, administration, daily pricing, foreign exchange services, cash management, financial asset management, securities finance and investment advisory services. As a provider of these products and services, we generate client deposits, which have generally provided a stable, low-cost source of funds. As a global custodian, clients place deposits with State Street entities in various currencies. We invest these client deposits in a combination of investment securities and shortduration financial instruments whose mix is determined by the characteristics of the deposits. For the past several years, we have experienced higher client deposit inflows toward the end of the quarter or the end of the year. As a result, we believe average client deposit balances are more reflective of ongoing funding than period-end balances. TABLE 33: CLIENT DEPOSITS
<table><tr><td></td><td>December 31,</td><td>Average Balance Year Ended December 31,</td></tr><tr><td>(In millions)</td><td>2014</td><td>2013</td><td>2014</td><td>2013</td></tr><tr><td>Client deposits<sup>-1</sup></td><td>$195,276</td><td>$182,268</td><td>$167,470</td><td>$143,043</td></tr></table>
(1) Balance as of December 31, 2014 excluded term wholesale certificates of deposit, or CDs, of $13.76 billion; average balances for the year ended December 31, 2014 and 2013 excluded average CDs of $6.87 billion and $2.50 billion, respectively. Short-Term Funding: Our corporate commercial paper program, under which we can issue up to $3.0 billion of commercial paper with original maturities of up to 270 days from the date of issuance, had $2.48 billion and $1.82 billion of commercial paper outstanding as of December 31, 2014 and 2013, respectively. Our on-balance sheet liquid assets are also an integral component of our liquidity management strategy. These assets provide liquidity through maturities of the assets, but more importantly, they provide us with the ability to raise funds by pledging the securities as collateral for borrowings or through outright sales. In addition, our access to the global capital markets gives us the ability to source incremental funding at reasonable rates of interest from wholesale investors. As discussed earlier under “Asset Liquidity,” State Street Bank's membership in the FHLB allows for advances of liquidity with varying terms against high-quality collateral. Short-term secured funding also comes in the form of securities lent or sold under agreements to repurchase. These transactions are short-term in nature, generally overnight, and are collateralized by high-quality investment securities. These balances were $8.93 billion and $7.95 billion as of December 31, 2014 and 2013, respectively. State Street Bank currently maintains a line of credit with a financial institution of CAD $800 million, or approximately $690 million as of December 31, 2014, to support its Canadian securities processing operations. The line of credit has no stated termination date and is cancelable by either party with prior notice. As of December 31, 2014, there was no balance outstanding on this line of credit. Long-Term Funding: As of December 31, 2014, State Street Bank had Board authority to issue unsecured senior debt securities from time to time, provided that the aggregate principal amount of such unsecured senior debt outstanding at any one time does not exceed $5 billion. As of December 31, 2014, $4.1 billion was available for issuance pursuant to this authority. As of December 31, 2014, State Street Bank also had Board authority to issue an additional $500 million of subordinated debt. We maintain an effective universal shelf registration that allows for the public offering and sale of debt securities, capital securities, common stock, depositary shares and preferred stock, and warrants to purchase such securities, including any shares into which the preferred stock and depositary shares may be convertible, or any combination thereof. We have issued in the past, and we may issue in the future, securities pursuant to our shelf registration. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors. Agency Credit Ratings Our ability to maintain consistent access to liquidity is fostered by the maintenance of high investment-grade ratings as measured by the major independent credit rating agencies. Factors essential to maintaining high credit ratings include diverse and stable core earnings; relative market position; strong risk management; strong capital ratios; diverse liquidity sources, including the global capital markets and client deposits; strong liquidity monitoring procedures; and preparedness for current or future regulatory developments. High ratings limit borrowing costs and enhance our liquidity by providing assurance for unsecured funding and depositors, increasing the potential market for our debt and improving our ability to offer products, serve markets, and engage in transactions in which clients value high credit ratings. A downgrade or reduction of our credit ratings could have a material adverse effect on our liquidity by restricting our ability to access the capital |
1.748 | what is the percent change in average cds that were excluded between 2013 and 2014? | countries which totaled between .75% and 1% of our consolidated total assets at December 31, 2009 amounted to $1.26 billion (Italy). Aggregate cross-border outstandings to countries which totaled between .75% and 1% of our consolidated total assets at December 31, 2008 amounted to $3.45 billion (Canada and Germany). There were no cross-border outstandings to countries which totaled between .75% and 1% of our consolidated total assets as of December 31, 2007. Capital The management of regulatory and economic capital both involve key metrics evaluated by management to assess whether our actual level of capital is commensurate with our risk profile, is in compliance with all regulatory requirements, and is sufficient to provide us with the financial flexibility to undertake future strategic business initiatives. Regulatory Capital Our objective with respect to regulatory capital management is to maintain a strong capital base in order to provide financial flexibility for our business needs, including funding corporate growth and supporting customers’ cash management needs, and to provide protection against loss to depositors and creditors. We strive to maintain an optimal level of capital, commensurate with our risk profile, on which an attractive return to shareholders is expected to be realized over both the short and long term, while protecting our obligations to depositors and creditors and satisfying regulatory capital adequacy requirements. Our capital management process focuses on our risk exposures, our regulatory capital requirements, the evaluations of the major independent credit rating agencies that assign ratings to our public debt and our capital position relative to our peers. Our Capital Committee, working in conjunction with our Asset and Liability Committee, referred to as ALCO, oversees the management of regulatory capital, and is responsible for ensuring capital adequacy with respect to regulatory requirements, internal targets and the expectations of the major independent credit rating agencies. The primary regulator of both State Street and State Street Bank for regulatory capital purposes is the Federal Reserve. Both State Street and State Street Bank are subject to the minimum capital requirements established by the Federal Reserve and defined in the Federal Deposit Insurance Corporation Improvement Act of 1991. State Street Bank must meet the regulatory capital thresholds for “well capitalized” in order for the parent company to maintain its status as a financial holding company. Regulatory capital ratios and related regulatory guidelines for State Street and State Street Bank were as follows as of December 31:
<table><tr><td></td><td colspan="2">REGULATORY GUIDELINES</td><td colspan="2">STATE STREET</td><td colspan="2"> STATE STREET BANK</td></tr><tr><td></td><td>Minimum</td><td>Well Capitalized</td><td>2009</td><td>2008 -2</td><td>2009</td><td> 2008<sup>-2</sup></td></tr><tr><td>Regulatory capital ratios:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tier 1 risk-based capital</td><td>4%</td><td>6%</td><td>17.7%</td><td>20.3%</td><td>17.3%</td><td>19.8%</td></tr><tr><td>Total risk-based capital</td><td>8</td><td>10</td><td>19.1</td><td>21.6</td><td>19.0</td><td>21.3</td></tr><tr><td>Tier 1 leverage ratio<sup>-1</sup></td><td>4</td><td>5</td><td>8.5</td><td>7.8</td><td>8.2</td><td>7.6</td></tr></table>
(1) Regulatory guideline for well capitalized applies only to State Street Bank. (2) Tier 1 and total risk-based capital and tier 1 leverage ratios exclude the impact, where applicable, of the asset-backed commercial paper purchased under the Federal Reserve’s AMLF, as permitted by the AMLF’s terms and conditions. At December 31, 2009, State Street’s and State Street Bank’s tier 1 and total risk-based capital ratios decreased compared to year-end 2008. With respect to State Street, the loss associated with the May 2009 conduit consolidation and the June 2009 redemption of the equity received from the U. S. Treasury in connection with the TARP Capital Purchase Program, partly offset by the aggregate impact of the May 2009 public offering MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) on a number of factors, including, but not limited to, the level of housing prices and the timing of defaults. To the extent that such factors differ significantly from management's current expectations, resulting loss estimates may differ materially from those stated. Excluding other-than-temporary impairment recorded in 2014, management considers the aggregate decline in fair value of the remaining investment securities and the resulting gross unrealized losses as of December 31, 2014 to be temporary and not the result of any material changes in the credit characteristics of the securities. Additional information about these gross unrealized losses is provided in note 3 to the consolidated financial statements included under Item 8 of this Form 10-K. Loans and Leases TABLE 26: U. S. AND NON- U. S. LOANS AND LEASES
<table><tr><td></td><td colspan="5">As of December 31,</td></tr><tr><td>(In millions)</td><td>2014</td><td>2013</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Institutional:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>$14,908</td><td>$10,623</td><td>$9,645</td><td>$7,115</td><td>$7,001</td></tr><tr><td>Non-U.S.</td><td>3,263</td><td>2,654</td><td>2,251</td><td>2,478</td><td>4,192</td></tr><tr><td>Commercial real estate:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S.</td><td>28</td><td>209</td><td>411</td><td>460</td><td>764</td></tr><tr><td>Total loans and leases</td><td>$18,199</td><td>$13,486</td><td>$12,307</td><td>$10,053</td><td>$11,957</td></tr><tr><td>Average loans and leases</td><td>$15,912</td><td>$13,781</td><td>$11,610</td><td>$12,180</td><td>$12,094</td></tr></table>
The increase in loans in the institutional segment as of December 31, 2014 as compared to December 31, 2013 was primarily driven by higher levels of short-duration advances and increased investment in the non-investment-grade lending market through participations in loan syndications, specifically senior secured bank loans. Short-duration advances to our clients included in the institutional segment were $3.54 billion and $2.45 billion as of December 31, 2014 and 2013, respectively. These short-duration advances provide liquidity to fund clients in support of their transaction flows associated with securities settlement activities. As of December 31, 2014 and 2013, our investment in senior secured bank loans totaled approximately $2.07 billion and $724 million, respectively. In addition, we had binding unfunded commitments as of December 31, 2014 totaling $337 million to participate in such syndications. These senior secured bank loans, which we have rated “speculative” under our internal risk-rating framework (refer to note 4 to the consolidated financial statements included under Item 8 of this Form 10-K), are externally rated “BBB,” “BB” or “B,” with approximately 95% of the loans rated “BB” or “B” as of December 31, 2014, compared to 94% as of December 31, 2013. Our investment strategy involves limiting our investment to larger, more liquid credits underwritten by major global financial institutions, applying our internal credit analysis process to each potential investment, and diversifying our exposure by counterparty and industry segment. However, these loans have significant exposure to credit losses relative to higher-rated loans. As of December 31, 2014, our allowance for loan losses included approximately $26 million related to these senior secured bank loans. As this portfolio grows and becomes more seasoned, our allowance for loan losses related to these loans may increase through additional provisions for credit losses. As of December 31, 2014 and 2013, unearned income deducted from our investment in leveraged lease financing was $109 million and $121 million, respectively, for U. S. leases and $261 million and $298 million, respectively, for non-U. S. leases. The commercial real estate, or CRE, loans are composed of the loans acquired in 2008 pursuant to indemnified repurchase agreements with an affiliate of Lehman as a result of the Lehman Brothers bankruptcy. Additional information about all of our loan-and-lease segments, as well as underlying classes, is provided in note 4 to the consolidated financial statements included under Item 8 of this Form 10-K. The decrease in the CRE loans as of December 31, 2014 compared to December 31, 2013 resulted from one of the loans, acquired in 2008 pursuant to indemnified repurchase agreement with an affiliate of Lehman as a result of the Lehman Brothers bankruptcy being repaid. As of December 31, 2014 no CRE loans were modified in troubled debt restructurings. As of December 31, 2013, we held a CRE loan for approximately $130 million which had previously been modified in a troubled debt restructuring. No loans were modified in troubled debt restructurings in 2014 or 2013. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Funding Deposits: We provide products and services including custody, accounting, administration, daily pricing, foreign exchange services, cash management, financial asset management, securities finance and investment advisory services. As a provider of these products and services, we generate client deposits, which have generally provided a stable, low-cost source of funds. As a global custodian, clients place deposits with State Street entities in various currencies. We invest these client deposits in a combination of investment securities and shortduration financial instruments whose mix is determined by the characteristics of the deposits. For the past several years, we have experienced higher client deposit inflows toward the end of the quarter or the end of the year. As a result, we believe average client deposit balances are more reflective of ongoing funding than period-end balances. TABLE 33: CLIENT DEPOSITS
<table><tr><td></td><td>December 31,</td><td>Average Balance Year Ended December 31,</td></tr><tr><td>(In millions)</td><td>2014</td><td>2013</td><td>2014</td><td>2013</td></tr><tr><td>Client deposits<sup>-1</sup></td><td>$195,276</td><td>$182,268</td><td>$167,470</td><td>$143,043</td></tr></table>
(1) Balance as of December 31, 2014 excluded term wholesale certificates of deposit, or CDs, of $13.76 billion; average balances for the year ended December 31, 2014 and 2013 excluded average CDs of $6.87 billion and $2.50 billion, respectively. Short-Term Funding: Our corporate commercial paper program, under which we can issue up to $3.0 billion of commercial paper with original maturities of up to 270 days from the date of issuance, had $2.48 billion and $1.82 billion of commercial paper outstanding as of December 31, 2014 and 2013, respectively. Our on-balance sheet liquid assets are also an integral component of our liquidity management strategy. These assets provide liquidity through maturities of the assets, but more importantly, they provide us with the ability to raise funds by pledging the securities as collateral for borrowings or through outright sales. In addition, our access to the global capital markets gives us the ability to source incremental funding at reasonable rates of interest from wholesale investors. As discussed earlier under “Asset Liquidity,” State Street Bank's membership in the FHLB allows for advances of liquidity with varying terms against high-quality collateral. Short-term secured funding also comes in the form of securities lent or sold under agreements to repurchase. These transactions are short-term in nature, generally overnight, and are collateralized by high-quality investment securities. These balances were $8.93 billion and $7.95 billion as of December 31, 2014 and 2013, respectively. State Street Bank currently maintains a line of credit with a financial institution of CAD $800 million, or approximately $690 million as of December 31, 2014, to support its Canadian securities processing operations. The line of credit has no stated termination date and is cancelable by either party with prior notice. As of December 31, 2014, there was no balance outstanding on this line of credit. Long-Term Funding: As of December 31, 2014, State Street Bank had Board authority to issue unsecured senior debt securities from time to time, provided that the aggregate principal amount of such unsecured senior debt outstanding at any one time does not exceed $5 billion. As of December 31, 2014, $4.1 billion was available for issuance pursuant to this authority. As of December 31, 2014, State Street Bank also had Board authority to issue an additional $500 million of subordinated debt. We maintain an effective universal shelf registration that allows for the public offering and sale of debt securities, capital securities, common stock, depositary shares and preferred stock, and warrants to purchase such securities, including any shares into which the preferred stock and depositary shares may be convertible, or any combination thereof. We have issued in the past, and we may issue in the future, securities pursuant to our shelf registration. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors. Agency Credit Ratings Our ability to maintain consistent access to liquidity is fostered by the maintenance of high investment-grade ratings as measured by the major independent credit rating agencies. Factors essential to maintaining high credit ratings include diverse and stable core earnings; relative market position; strong risk management; strong capital ratios; diverse liquidity sources, including the global capital markets and client deposits; strong liquidity monitoring procedures; and preparedness for current or future regulatory developments. High ratings limit borrowing costs and enhance our liquidity by providing assurance for unsecured funding and depositors, increasing the potential market for our debt and improving our ability to offer products, serve markets, and engage in transactions in which clients value high credit ratings. A downgrade or reduction of our credit ratings could have a material adverse effect on our liquidity by restricting our ability to access the capital |
4,801.47399 | If Total operating revenues develops with the same increasing rate in 2011, what will it reach in 2012? (in million) | Other Liquidity Items Cash payments required for long-term debt maturities, rental payments under noncancellable operating leases, purchase obligations and other commitments in effect at December 31, 2010, are summarized in the following table:
<table><tr><td></td><td>Payments Due By Period(a)</td></tr><tr><td>($ in millions)</td><td>Total</td><td>Less than1 Year</td><td>1-3 Years</td><td>3-5 Years</td><td>More than5 Years</td></tr><tr><td>Long-term debt, including capital leases</td><td>$2,750.1</td><td>$34.5</td><td>$188.3</td><td>$367.1</td><td>$2,160.2</td></tr><tr><td>Interest payments on long-term debt(b)</td><td>1,267.5</td><td>160.5</td><td>316.4</td><td>304.2</td><td>486.4</td></tr><tr><td>Operating leases</td><td>93.2</td><td>31.1</td><td>37.1</td><td>16.6</td><td>8.4</td></tr><tr><td>Purchase obligations(c)</td><td>6,586.9</td><td>2,709.5</td><td>3,779.4</td><td>98.0</td><td>−</td></tr><tr><td>Total payments on contractual obligations</td><td>$10,697.7</td><td>$2,935.6</td><td>$4,321.2</td><td>$785.9</td><td>$2,655.0</td></tr></table>
(a) Amounts reported in local currencies have been translated at the year-end 2010 exchange rates. (b) For variable rate facilities, amounts are based on interest rates in effect at year end and do not contemplate the effects of hedging instruments. (c) The company’s purchase obligations include contracted amounts for aluminum, steel and other direct materials. Also included are commitments for purchases of natural gas and electricity, aerospace and technologies contracts and other less significant items. In cases where variable prices and/or usage are involved, management’s best estimates have been used. Depending on the circumstances, early termination of the contracts may or may not result in penalties and, therefore, actual payments could vary significantly. The table above does not include $60.1 million of uncertain tax positions, the timing of which is uncertain. Contributions to the company’s defined benefit pension plans, not including the unfunded German plans, are expected to be in the range of $30 million in 2011. This estimate may change based on changes in the Pension Protection Act and actual plan asset performance, among other factors. Benefit payments related to these plans are expected to be $71.4 million, $74.0 million, $77.1 million, $80.3 million and $84.9 million for the years ending December 31, 2011 through 2015, respectively, and a total of $483.1 million for the years 2016 through 2020. Payments to participants in the unfunded Other Liquidity Items Cash payments required for long-term debt maturities, rental payments under noncancellable operating leases, purchase obligations and other commitments in effect at December 31, 2010, are summarized in the following table: (a) Amounts reported in local currencies have been translated at the year-end 2010 exchange rates. (b) For variable rate facilities, amounts are based on interest rates in effect at year end and do not contemplate the effects of hedging instruments. (c) The company¡¯s purchase obligations include contracted amounts for aluminum, steel and other direct materials. Also included are commitments for purchases of natural gas and electricity, aerospace and technologies contracts and other less significant items. In cases where variable prices and/or usage are involved, management¡¯s best estimates have been used. Depending on the circumstances, early termination of the contracts may or may not result in penalties and, therefore, actual payments could vary significantly. The table above does not include $60.1 million of uncertain tax positions, the timing of which is uncertain. Contributions to the company¡¯s defined benefit pension plans, not including the unfunded German plans, are expected to be in the range of $30 million in 2011. This estimate may change based on changes in the Pension Protection Act and actual plan asset performance, among other factors. Benefit payments related to these plans are expected to be $71.4 million, $74.0 million, $77.1 million, $80.3 million and $84.9 million for the years ending December 31, 2011 through 2015, respectively, and a total of $483.1 million for the years 2016 through 2020. Payments to participants in the unfunded German plans are expected to be between $21.8 million (€16.5 million) to $23.2 million (€17.5 million) in each of the years 2011 through 2015 and a total of $102.7 million (€77.5 million) for the years 2016 through 2020. For the U. S. pension plans in 2011, we changed our return on asset assumption to 8.00 percent (from 8.25 percent in 2010) and our discount rate assumption to an average of 5.55 percent (from 6.00 percent in 2010). Based on the changes in assumptions, pension expense in 2011 is anticipated to be relatively flat compared to 2010. A reduction of the expected return on pension assets assumption by a quarter of a percentage point would result in an estimated $2.9 million increase in the 2011 global pension expense, while a quarter of a percentage point reduction in the discount rate applied to the pension liability would result in an estimated $3.5 million of additional pension expense in 2011. Additional information regarding the company¡¯s pension plans is provided in Note 14 accompanying the consolidated financial statements within Item 8 of this report. Annual cash dividends paid on common stock were 20 cents per share in 2010, 2009 and 2008. Total dividends paid were $35.8 million in 2010, $37.4 million in 2009 and $37.5 million in 2008. On January 26, 2011, the company¡¯s board of directors approved an increase in the quarterly dividends to 7 cents per share. Share Repurchases Our share repurchases, net of issuances, totaled $506.7 million in 2010, $5.1 million in 2009 and $299.6 million in 2008. On November 2, 2010, we acquired 2,775,408 shares of our publicly held common stock in a private transaction for $88.8 million. On February 17, 2010, we entered into an accelerated share repurchase agreement to buy $125.0 million of our common shares using cash on hand and available borrowings. We advanced the $125.0 million on February 22, 2010, and received 4,323,598 shares, which represented 90 percent of the total shares as calculated using the previous day¡¯s closing price. The agreement was settled on May 20, 2010, and the company received an additional 398,206 shares. Net repurchases in 2008 included a $31 million settlement on January 7, 2008, of a forward contract entered into in December 2007 for the repurchase of 1,350,000 shares. From January 1 through February 24, 2011, Ball repurchased an additional $143.3 million of its common stock. Table of Contents into U. S. Dollars using the spot foreign exchange rate in effect on the exercise date. Upon the exercise of share options, the company either issues new shares or can utilize shares held in treasury (see Note 10, “Share Capital”) to satisfy the exercise. The share option plans provided for a grant price equal to the quoted market price of the company's shares on the date of grant. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the company before the options vest. All options outstanding at December 31, 2011were exercisable and had a range of exercise prices from ￡6.39 to ￡19.19, and weighted average remaining contractual life of 2.62 years. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009, was $9.2 million, $18.5 million, and $20.7 million, respectively. At December 31, 2011, the aggregate intrinsic value of options outstanding and options exercisable was $36.3 million. The market price of the company's common stock at December 31, 2011 was $20.09 (December 31, 2010: $24.06). Changes in outstanding share option awards are as follows:
<table><tr><td></td><td colspan="2">2011</td><td colspan="2">2010</td><td colspan="2">2009</td></tr><tr><td>Millions of shares, except prices</td><td>Options</td><td>Weighted Average Exercise Price(£ Sterling)</td><td>Options</td><td>Weighted Average Exercise Price(£ Sterling)</td><td>Options</td><td>Weighted Average Exercise Price(£ Sterling)</td></tr><tr><td>Outstanding at the beginning of year</td><td>10.7</td><td>13.85</td><td>16.4</td><td>14.99</td><td>23.1</td><td>14.06</td></tr><tr><td>Forfeited during the year</td><td>-5.3</td><td>19.70</td><td>-3.9</td><td>21.90</td><td>-2.1</td><td>15.15</td></tr><tr><td>Exercised during the year</td><td>-0.9</td><td>8.33</td><td>-1.8</td><td>6.70</td><td>-4.6</td><td>10.20</td></tr><tr><td>Outstanding at the end of the year</td><td>4.5</td><td>7.85</td><td>10.7</td><td>13.85</td><td>16.4</td><td>14.99</td></tr><tr><td>Exercisable at the end of the year</td><td>4.5</td><td>7.85</td><td>10.7</td><td>13.85</td><td>16.4</td><td>14.99</td></tr></table>
13. RETIREMENT BENEFIT PLANS Defined Contribution Plans The company operates defined contribution retirement benefit plans for all qualifying employees. The assets of the plans are held separately from those of the company in funds under the control of trustees. When employees leave the plans prior to vesting fully in the contributions, the contributions payable by the company are reduced by the amount of forfeited contributions. The total amounts charged to the Consolidated Statements of Income for the year ended December 31, 2011, of $53.2 million (December 31, 2010: $47.0 million, 2009: $43.6 million) represent contributions paid or payable to these plans by the company at rates specified in the rules of the plans. As of December 31, 2011, accrued contributions of $20.0 million (December 31, 2010: $18.9 million) for the current year will be paid to the plans. Defined Benefit Plans The company maintains legacy defined benefit pension plans for qualifying employees of its subsidiaries in the U. K. , Ireland, Germany and Taiwan. All defined benefit plans are closed to new participants. The company also maintains a postretirement medical plan in the U. S. , which was closed to new participants in 2005. In 2006, the plan was amended to eliminate benefits for all participants who will not meet retirement eligibility by 2008. The assets of all defined benefit schemes are held in separate trustee-administered funds. Under the plans, the employees are generally entitled to retirement benefits based on final salary at retirement. The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were valued as of December 31, 2011. The benefit obligation, related current service cost and prior service cost were measured using the projected unit credit method.
<table><tr><td>$ in millions</td><td>Before Consolidation<sup>-1</sup></td><td>Consolidated Investment Products</td><td>Adjustments<sup>-1(2)</sup></td><td>Total</td></tr><tr><td>Year ended December 31, 2010</td><td></td><td></td><td></td><td></td></tr><tr><td>Total operating revenues</td><td>3,532.7</td><td>0.3</td><td>-45.3</td><td>3,487.7</td></tr><tr><td>Total operating expenses</td><td>2,887.8</td><td>55.3</td><td>-45.3</td><td>2,897.8</td></tr><tr><td>Operating income</td><td>644.9</td><td>-55.0</td><td>—</td><td>589.9</td></tr><tr><td>Equity in earnings of unconsolidated affiliates</td><td>40.8</td><td>—</td><td>-0.6</td><td>40.2</td></tr><tr><td>Interest and dividend income</td><td>10.4</td><td>246.0</td><td>-5.1</td><td>251.3</td></tr><tr><td>Other investment income/(losses)</td><td>15.6</td><td>107.6</td><td>6.4</td><td>129.6</td></tr><tr><td>Interest expense</td><td>-58.6</td><td>-123.7</td><td>5.1</td><td>-177.2</td></tr><tr><td>Income before income taxes</td><td>653.1</td><td>174.9</td><td>5.8</td><td>833.8</td></tr><tr><td>Income tax provision</td><td>-197.0</td><td>—</td><td>—</td><td>-197.0</td></tr><tr><td>Net income</td><td>456.1</td><td>174.9</td><td>5.8</td><td>636.8</td></tr><tr><td>(Gains)/losses attributable to noncontrolling interests in consolidated entities, net</td><td>-0.2</td><td>-170.8</td><td>-0.1</td><td>-171.1</td></tr><tr><td>Net income attributable to common shareholders</td><td>455.9</td><td>4.1</td><td>5.7</td><td>465.7</td></tr></table>
(1) The Before Consolidation column includes Invesco's equity interests in the investment products accounted for as equity method (private equity and real estate partnership funds) and available-for-sale investments (CLOs). Upon consolidation of the CLOs, the company's and the CLOs' accounting policies are effectively aligned, resulting in the reclassification of the company's gain for the year ended December 31, 2011 of $20.3 million (representing the increase in the market value of the company's holding in the consolidated CLOs) from other comprehensive income into other gains/losses (year ended December 31, 2010: $6.4 million). The company's gain on its investment in the CLOs (before consolidation) eliminates with the company's share of the offsetting loss on the CLOs' debt. The net income arising from consolidation of CLOs is therefore completely attributed to other investors in these CLOs, as the company's share has been eliminated through consolidation. The Before Consolidation column does not include any other adjustments related to non-GAAPfinancial measure presentation. (2) Adjustments include the elimination of intercompany transactions between the company and its consolidated investment products, primarily the elimination of management fees expensed by the funds and recorded as operating revenues (before consolidation) by the company. Operating Revenues and Net Revenues The main categories of revenues, and the dollar and percentage change between the periods, are as follows:
<table><tr><td>$ in millions</td><td>2011</td><td>2010</td><td>$ Change</td><td>% Change</td></tr><tr><td>Investment management fees</td><td>3,138.5</td><td>2,720.9</td><td>417.6</td><td>15.3%</td></tr><tr><td>Service and distribution fees</td><td>780.3</td><td>645.5</td><td>134.8</td><td>20.9%</td></tr><tr><td>Performance fees</td><td>37.9</td><td>26.1</td><td>11.8</td><td>45.2%</td></tr><tr><td>Other</td><td>135.5</td><td>95.2</td><td>40.3</td><td>42.3%</td></tr><tr><td>Total operating revenues</td><td>4,092.2</td><td>3,487.7</td><td>604.5</td><td>17.3%</td></tr><tr><td>Third-party distribution, service and advisory expenses</td><td>-1,282.5</td><td>-1,053.8</td><td>-228.7</td><td>21.7%</td></tr><tr><td>Proportional share of revenues, net of third-party distribution expenses, from joint venture investments</td><td>41.4</td><td>42.2</td><td>-0.8</td><td>-1.9%</td></tr><tr><td>Management fees earned from consolidated investment products</td><td>46.8</td><td>45.3</td><td>1.5</td><td>3.3%</td></tr><tr><td>Performance fees earned from consolidated investment products</td><td>0.5</td><td>—</td><td>0.5</td><td>N/A</td></tr><tr><td>Other revenues recorded by consolidated investment products</td><td>—</td><td>-0.3</td><td>0.3</td><td>-100.0%</td></tr><tr><td>Net revenues</td><td>2,898.4</td><td>2,521.1</td><td>377.3</td><td>15.0%</td></tr></table>
Operating revenues increased by 17.3% in the year ended December 31, 2011 to $4,092.2 million (year ended December 31, 2010: $3,487.7 million). Net revenues increased by 15.0% in in the year ended December 31, 2011 to $2,898.4 million (year ended December 31, 2010: $2,521.1 million). Net revenues are operating revenues less third-party distribution, service and advisory expenses, plus our proportional share of net revenues from joint venture arrangements, plus management and performance fees Table of Contents both probable and reasonably estimable. We must from time to time make material estimates with respect to legal and other contingencies. The nature of our business requires compliance with various state and federal statutes, as well as various contractual obligations, and exposes us to a variety of legal proceedings and matters in the ordinary course of business. While the outcomes of matters such as these are inherently uncertain and difficult to predict, we maintain reserves reflected in other current and other non-current liabilities, as appropriate, for identified losses that are, in our judgment, probable and reasonably estimable. Management's judgment is based on the advice of legal counsel, ruling on various motions by the applicable court, review of the outcome of similar matters, if applicable, and review of guidance from state or federal agencies, if applicable. Contingent consideration payable in relation to a business acquisition is recorded as of the acquisition date as part of the fair value transferred in exchange for the acquired business. Recent Accounting Standards See Item 8, Financial Statements and Supplementary Data - Note 1, “Accounting Policies - Accounting Pronouncements Recently Adopted and Pending Accounting Pronouncements. ” Item 7A. Quantitative and Qualitative Disclosures About Market Risk In the normal course of its business, the company is primarily exposed to market risk in the form of securities market risk, interest rate risk, and foreign exchange rate risk. AUM Market Price Risk The company's investment management revenues are comprised of fees based on a percentage of the value of AUM. Declines in equity or fixed income security market prices could cause revenues to decline because of lower investment management fees by: ? Causing the value of AUM to decrease. ? Causing the returns realized on AUM to decrease (impacting performance fees). ? Causing clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity and that the company does not serve. ? Causing clients to rebalance assets away from investments that the company manages into investments that the company does not manage. ? Causing clients to reallocate assets away from products that earn higher revenues into products that earn lower revenues. Underperformance of client accounts relative to competing products could exacerbate these factors. Securities Market Risk The company has investments in sponsored investment products that invest in a variety of asset classes. Investments are generally made to establish a track record or to hedge economically exposure to certain deferred compensation plans. The company's exposure to market risk arises from its investments. The following table summarizes the fair values of the investments exposed to market risk and provides a sensitivity analysis of the estimated fair values of those investments, assuming a 20% increase or decrease in fair values: |
21,302 | What is the sum of Revenues in 2008 on September 30 ? (in thousand) | Uranium Mining Sites. During a period between 1940 and the early 1970s, certain FMC predecessor entities were involved in uranium exploration and mining in the western U. S. Similar exploration and mining activities by other companies have caused environmental impacts that have warranted remediation, and EPA and local authorities are currently evaluating the need for significant cleanup activities in the region. To date, FMC has undertaken remediation at a limited number of sites associated with these predecessor entities. An initiative to gather additional information about sites in the region is ongoing, and information gathered under this initiative was submitted to EPA Region 9 during the second and third quarters of 2008 and the fourth quarter of 2009 in response to an information request by EPA regarding uranium mining activities on Navajo Nation properties. FCX utilized the results of FMC’s remediation experience, in combination with historical and updated information to initially estimate the fair value of uranium-related liabilities assumed in the FMC acquisition. Asset Retirement Obligations (AROs). FCX’s ARO cost estimates are reflected on a third-party cost basis and comply with FCX’s legal obligation to retire tangible, long-lived assets. A summary of changes in FCX’s AROs for the years ended December 31 follows:
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Balance at beginning of year</td><td>$921</td><td>$856</td><td>$731</td></tr><tr><td>Liabilities incurred</td><td>6</td><td>9</td><td>5</td></tr><tr><td>Revisions to cash flow estimates<sup>a</sup></td><td>211</td><td>48</td><td>105</td></tr><tr><td>Accretion expense</td><td>55</td><td>58</td><td>54</td></tr><tr><td>Spending</td><td>-47</td><td>-49</td><td>-38</td></tr><tr><td>Foreign currency translation adjustment</td><td>—</td><td>-1</td><td>-1</td></tr><tr><td>Balance at end of year</td><td>1,146</td><td>921</td><td>856</td></tr><tr><td>Less current portion</td><td>-55</td><td>-31</td><td>-69</td></tr><tr><td>Long-term portion</td><td>$1,091</td><td>$890</td><td>$787</td></tr></table>
a. Revisions to cash flow estimates were primarily related to updated closure plans that included revised cost estimates and accelerated timing of certain closure activities. ARO costs may increase or decrease significantly in the future as a result of changes in regulations, changes in engineering designs and technology, permit modifications or updates, changes in mine plans, inflation or other factors and as actual reclamation spending occurs. ARO activities and expenditures generally are made over an extended period of time commencing near the end of the mine life; however, certain reclamation activities may be accelerated if legally required or if determined to be economically beneficial. Legal requirements in New Mexico, Arizona, Colorado and other states require financial assurance to be provided for the estimated costs of reclamation and closure, including groundwater quality protection programs. FCX has satisfied financial assurance requirements by using a variety of mechanisms, such as performance guarantees, financial capability demonstrations, trust funds, surety bonds, letters of credit and collateral. The applicable regulations specify financial strength tests that are designed to confirm a company’s or guarantor’s financial capability to fund estimated reclamation and closure costs. The amount of financial assurance FCX is required to provide will vary with changes in laws, regulations and reclamation and closure requirements, and cost estimates. At December 31, 2012, FCX’s financial assurance obligations associated with these closure and reclamation costs totaled $970 million, of which $601 million was in the form of guarantees issued by FCX and financial capability demonstrations. At December 31, 2012, FCX had trust assets totaling $161 million (included in other assets), which are legally restricted to fund a portion of its AROs for properties in New Mexico as required by New Mexico regulatory authorities. New Mexico Environmental and Reclamation Programs. FCX’s New Mexico operations are regulated under the New Mexico Water Quality Act and regulations adopted under that act by the Water Quality Control Commission (WQCC). The New Mexico Environment Department (NMED) has required each of these operations to submit closure plans for NMED’s approval. The closure plans must include measures to assure meeting groundwater quality standards following the closure of discharging facilities and to abate any groundwater or surface water contamination. In March 2009, the Tyrone operation appealed the WQCC Final Order, dated February 4, 2009, regarding location of the “places of withdrawal of water,” a legal criterion used to determine where groundwater quality standards must be met at FCX’s New Mexico mining sites. In December 2010, FCX's Tyrone mine entered into a settlement agreement with NMED that calls for a stay of the appeal while NMED and the WQCC complete several administrative actions, including renewal of Tyrone’s closure permit consistent with the terms of the settlement, review and approval of a groundwater abatement plan and adoption of alternative abatement standards, and adoption of new groundwater discharge permit rules for copper mines. If the administrative actions are concluded consistent with the terms of the settlement agreement within the period of the stay, then Tyrone will move to dismiss the appeal. In December 2012, Tyrone and NMED agreed to extend the period to conclude the administrative actions through December 31, 2013. The Court of Appeals also extended the stay for another year. Finalized closure plan requirements, including those resulting from the actions to be taken under the settlement agreement, could result in increases in closure costs for FCX's New Mexico operations. FCX’s New Mexico operations also are subject to regulation under the 1993 New Mexico Mining Act (the Mining Act) and the related rules that are administered by the Mining and Minerals Division (MMD) of the New Mexico Energy, Minerals and Natural Resources Department. Under the Mining Act, mines are required to obtain approval of plans describing the reclamation to be performed following cessation of mining operations. At December 31, 2012, FCX had accrued reclamation and closure Middleton's reported cigars shipment volume for 2012 decreased 0.7% due primarily to changes in trade inventories, partially offset by volume growth as a result of retail share gains. In the cigarette category, Marlboro's 2012 retail share performance continued to benefit from the brand-building initiatives supporting Marlboro's new architecture. Marlboro's retail share for 2012 increased 0.6 share points versus 2011 to 42.6%. In January 2013, PM USA expanded distribution of Marlboro Southern Cut nationally. Marlboro Southern Cut is part of the Marlboro Gold family. PM USA's 2012 retail share increased 0.8 share points versus 2011, reflecting retail share gains by Marlboro and by L&M in Discount. These gains were partially offset by share losses on other portfolio brands. In the machine-made large cigars category, Black & Mild's retail share for 2012 increased 0.5 share points. The brand benefited from new untipped cigarillo varieties that were introduced in 2011, Black & Mild seasonal offerings and the 2012 third-quarter introduction of Black & Mild Jazz untipped cigarillos into select geographies. In December 2012, Middleton announced plans to launch nationally Black & Mild Jazz cigars in both plastic tip and wood tip in the first quarter of 2013. The following discussion compares smokeable products segment results for the year ended December 31, 2011 with the year ended December 31, 2010. Net revenues, which include excise taxes billed to customers, decreased $221 million (1.0%) due to lower shipment volume ($1,051 million), partially offset by higher net pricing ($830 million), which includes higher promotional investments. Operating companies income increased $119 million (2.1%), due primarily to higher net pricing ($831 million), which includes higher promotional investments, marketing, administration, and research savings reflecting cost reduction initiatives ($198 million) and 2010 implementation costs related to the closure of the Cabarrus, North Carolina manufacturing facility ($75 million), partially offset by lower volume ($527 million), higher asset impairment and exit costs due primarily to the 2011 Cost Reduction Program ($158 million), higher per unit settlement charges ($120 million), higher charges related to tobacco and health judgments ($87 million) and higher FDA user fees ($73 million). For 2011, total smokeable products shipment volume decreased 4.0% versus 2010. PM USA's reported domestic cigarettes shipment volume declined 4.0% versus 2010 due primarily to retail share losses and one less shipping day, partially offset by changes in trade inventories. After adjusting for changes in trade inventories and one less shipping day, PM USA's 2011 domestic cigarette shipment volume was estimated to be down approximately 4% versus 2010. PM USA believes that total cigarette category volume for 2011 decreased approximately 3.5% versus 2010, when adjusted primarily for changes in trade inventories and one less shipping day PM USA's total premium brands (Marlboro and Other Premium brands) shipment volume decreased 4.3%. Marlboro's shipment volume decreased 3.8% versus 2010. In the Discount brands, PM USA's shipment volume decreased 0.9%. PM USA's shipments of premium cigarettes accounted for 93.7% of its reported domestic cigarettes shipment volume for 2011, down from 93.9% in 2010. Middleton's 2011 reported cigars shipment volume was unchanged versus 2010. For 2011, PM USA's retail share of the cigarette category declined 0.8 share points to 49.0% due primarily to retail share losses on Marlboro. Marlboro's 2011 retail share decreased 0.6 share points. In 2010, Marlboro delivered record full-year retail share results that were achieved at lower margin levels. Middleton retained a leading share of the tipped cigarillo segment of the machine-made large cigars category, with a retail share of approximately 84% in 2011. For 2011, Middleton's retail share of the cigar category increased 0.3 share points to 29.7% versus 2010. Black & Mild's 2011 retail share increased 0.5 share points, as the brand benefited from new product introductions. During the fourth quarter of 2011, Middleton broadened its untipped cigarillo portfolio with new Aroma Wrap? foil pouch packaging that accompanied the national introduction of Black & Mild Wine. This new fourthquarter packaging roll-out also included Black & Mild Sweets and Classic varieties. During the second quarter of 2011, Middleton entered into a contract manufacturing arrangement to source the production of a portion of its cigars overseas. Middleton entered into this arrangement to access additional production capacity in an uncertain competitive environment and an excise tax environment that potentially benefits imported large cigars over those manufactured domestically. Smokeless Products Segment The smokeless products segment's operating companies income grew during 2012 driven by higher pricing, Copenhagen and Skoal's combined volume and retail share performance and effective cost management. The following table summarizes smokeless products segment shipment volume performance:
<table><tr><td></td><td>Shipment VolumeFor the Years Ended December 31,</td></tr><tr><td>(cans and packs in millions)</td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Copenhagen</td><td>392.5</td><td>354.2</td><td>327.5</td></tr><tr><td>Skoal</td><td>288.4</td><td>286.8</td><td>274.4</td></tr><tr><td>CopenhagenandSkoal</td><td>680.9</td><td>641.0</td><td>601.9</td></tr><tr><td>Other</td><td>82.4</td><td>93.6</td><td>122.5</td></tr><tr><td>Total smokeless products</td><td>763.3</td><td>734.6</td><td>724.4</td></tr></table>
Volume includes cans and packs sold, as well as promotional units, but excludes international volume, which is not material to the smokeless products segment. Other includes certain USSTC and PM USA smokeless products. New types of smokeless products, as well as new packaging configurations Year ended September 30, 2009 Compared with the Year ended September 30, 2008 - Proprietary Capital Proprietary Capital results are driven by the valuations within Raymond James Capital Partners, L. P. , the EIF Funds, the valuations of our direct merchant banking investments and our investments in third-party private equity funds. During fiscal 2009, our direct merchant banking investments and Raymond James Capital Partners L. P. portfolio increased in value by $2.4 million and $12.1 million, respectively, while the RJF private equity investment and EIF Funds portfolio decreased by $2.8 million. Since we do not own 100% of all of the investments held in this segment, $8.1 million of the net income is attributable to other investors. Year ended September 30, 2008 Compared with the Year ended September 30, 2007 - Proprietary Capital Proprietary Capital results in fiscal year 2008 were driven by the valuations within Raymond James Capital Partners, L. P. , Ballast Point Ventures I and II, L. P. , the EIF Funds, our direct merchant banking investments managed by Raymond James Capital, Inc. and the third-party private equity funds in which RJF was invested. During fiscal 2008, our direct merchant banking investments, Raymond James Capital Partners L. P. and RJF private equity investment portfolio increased in value by $3 million, $8.2 million and $4 million, respectively. Results of Operations - Other The following table presents consolidated financial information for the Other segment for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2009</td><td>% Incr. (Decr.)</td><td>September 30, 2008</td><td>% Incr. (Decr.)</td><td>September 30, 2007</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Revenues</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest Income</td><td>$ 7,597</td><td>-67%</td><td>$ 22,824</td><td>-25%</td><td>$ 30,478</td></tr><tr><td>Other</td><td>-444</td><td>71%</td><td>-1,522</td><td>-123%</td><td>6,696</td></tr><tr><td>Total Revenues</td><td>7,153</td><td>-66%</td><td>21,302</td><td>-43%</td><td>37,174</td></tr><tr><td>Other Expense</td><td>26,955</td><td>-34%</td><td>40,973</td><td>28%</td><td>31,921</td></tr><tr><td>Pre-tax (Loss) Income</td><td>$ -19,802</td><td>-1%</td><td>$ -19,671</td><td>-474%</td><td>$ 5,253</td></tr></table>
Year ended September 30, 2009 Compared with the Year ended September 30, 2008 - Other Revenue in the Other segment includes interest earnings on available corporate cash balances and gains/losses on corporate investments, including company-owned life insurance used as a funding vehicle for non-qualified deferred compensation programs. Expenses in this segment are predominantly executive compensation and beginning in August 2009, interest on our senior notes. This interest will be approximately $26 million annually. Year ended September 30, 2008 Compared with the Year ended September 30, 2007 - Other Revenue in the Other segment includes interest earnings on available corporate cash balances and gains/losses on corporate investments, including company-owned life insurance used as a funding vehicle for non-qualified deferred compensation programs. Expenses in this segment are predominantly executive compensation and certain compensation accruals related to our benefit plans as a result of increased profitability at RJ Bank. Liquidity and Capital Resources Senior management establishes our liquidity and capital policies. These policies include senior management’s review of short- and long-term cash flow forecasts, review of monthly capital expenditures, the monitoring of the availability of alternative sources of financing and the daily monitoring of liquidity in our significant subsidiaries. Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk and impact on future liquidity needs. Our treasury department assists in evaluating, monitoring and controlling the impact that our business activities have on our financial condition, liquidity and capital structure as well as maintains the relationships with various lenders. The objectives of these policies are to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 28 Revenue The change in overall revenue was impacted by the following factors for the years ended December 31, 2013 and 2012, compared with the corresponding prior year periods: |
0.53846 | In the year with largest amount of Office Net Charge-offs in table 3, what's the increasing rate of Office Net Charge-offs in table 3? | PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The following table presents reported quarterly high and low per share sale prices of our common stock on the NYSE for the years 2015 and 2014.
<table><tr><td>2015</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$101.88</td><td>$93.21</td></tr><tr><td>Quarter ended June 30</td><td>98.64</td><td>91.99</td></tr><tr><td>Quarter ended September 30</td><td>101.54</td><td>86.83</td></tr><tr><td>Quarter ended December 31</td><td>104.12</td><td>87.23</td></tr><tr><td>2014</td><td>High</td><td>Low</td></tr><tr><td>Quarter ended March 31</td><td>$84.90</td><td>$78.38</td></tr><tr><td>Quarter ended June 30</td><td>90.73</td><td>80.10</td></tr><tr><td>Quarter ended September 30</td><td>99.90</td><td>89.05</td></tr><tr><td>Quarter ended December 31</td><td>106.31</td><td>90.20</td></tr></table>
On February 19, 2016, the closing price of our common stock was $87.32 per share as reported on the NYSE. As of February 19, 2016, we had 423,897,556 outstanding shares of common stock and 159 registered holders. Dividends As a REIT, we must annually distribute to our stockholders an amount equal to at least 90% of our REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Generally, we have distributed and expect to continue to distribute all or substantially all of our REIT taxable income after taking into consideration our utilization of net operating losses (“NOLs”). We have two series of preferred stock outstanding, 5.25% Mandatory Convertible Preferred Stock, Series A, issued in May 2014 (the “Series A Preferred Stock”), with a dividend rate of 5.25%, and the 5.50% Mandatory Convertible Preferred Stock, Series B (the “Series B Preferred Stock”), issued in March 2015, with a dividend rate of 5.50%. Dividends are payable quarterly in arrears, subject to declaration by our Board of Directors. The amount, timing and frequency of future distributions will be at the sole discretion of our Board of Directors and will be dependent upon various factors, a number of which may be beyond our control, including our financial condition and operating cash flows, the amount required to maintain our qualification for taxation as a REIT and reduce any income and excise taxes that we otherwise would be required to pay, limitations on distributions in our existing and future debt and preferred equity instruments, our ability to utilize NOLs to offset our distribution requirements, limitations on our ability to fund distributions using cash generated through our TRSs and other factors that our Board of Directors may deem relevant. We have distributed an aggregate of approximately $2.3 billion to our common stockholders, including the dividend paid in January 2016, primarily subject to taxation as ordinary income. During the year ended December 31, 2015, we declared the following cash distributions: Our total non-U. S. exposure was $232.6 billion at December 31, 2011, a decrease of $29.4 billion from December 31, 2010. Our non-U. S. exposure remained concentrated in Europe which accounted for $115.9 billion, or 50 percent, of total non-U. S. exposure. The European exposure was mostly in Western Europe and was distributed across a variety of industries. The decrease of $32.2 billion in Europe was primarily driven by our efforts to reduce risk in countries affected by the ongoing debt crisis in the Eurozone. Select European countries are further detailed in Table 54. Asia Pacific was our second largest non-U. S. exposure at $74.6 billion, or 32 percent. The $1.3 billion increase in Asia Pacific was driven by increases in securities and local exposure in Japan and increases in the emerging markets, predominately in local exposure, loans and securities offset by the sale of CCB shares. For more information on our CCB investment, see Note 5 – Securities to the Consolidated Financial Statements. Latin America accounted for $17.4 billion, or seven percent, of total non-U. S. exposure. The $2.6 billion increase in Latin America was primarily driven by an increase in Brazil in securities and local country exposure. Middle East and Africa increased $926 million to $4.6 billion, representing two percent of total non-U. S. exposure. Other non-U. S. exposure was $20.1 billion at December 31, 2011, a decrease of $2.1 billion in 2011 resulting primarily from a decrease in local exposure as a result of the sale of our Canadian consumer card business. For more information on our Asia Pacific and Latin America exposure, see non-U. S. exposure to selected countries defined as emerging markets on page 100. Table 52 presents countries where total cross-border exposure exceeded one percent of our total assets. At December 31, 2011, the United Kingdom and Japan were the only countries where total cross-border exposure exceeded one percent of our total assets. At December 31, 2011, Canada and France had total cross-border exposure of $16.9 billion and $16.1 billion representing 0.79 percent and 0.75 percent of total assets. Canada and France were the only other countries that had total cross-border exposure that exceeded 0.75 percent of our total assets at December 31, 2011. Exposure includes cross-border claims by our non-U. S. offices including loans, acceptances, time deposits placed, trading account assets, securities, derivative assets, other interestearning investments and other monetary assets. Amounts also include unused commitments, SBLCs, commercial letters of credit and formal guarantees. Sector definitions are consistent with FFIEC reporting requirements for preparing the Country Exposure Report.
<table><tr><td>Table 52</td><td colspan="6">Total Cross-border Exposure Exceeding One Percent of Total Assets<sup>-1</sup></td></tr><tr><td>(Dollars in millions)</td><td>December 31</td><td>Public Sector</td><td>Banks</td><td>Private Sector</td><td>Cross-borderExposure</td><td>Exposure as aPercentage ofTotal Assets</td></tr><tr><td>United Kingdom</td><td>2011</td><td>$6,401</td><td>$4,424</td><td>$18,056</td><td>$28,881</td><td>1.36%</td></tr><tr><td></td><td>2010</td><td>101</td><td>5,544</td><td>32,354</td><td>37,999</td><td>1.68</td></tr><tr><td>Japan<sup>-2</sup></td><td>2011</td><td>4,603</td><td>10,383</td><td>8,060</td><td>23,046</td><td>1.08</td></tr></table>
(1) Total cross-border exposure for the United Kingdom and Japan included derivatives exposure of $5.9 billion and $3.5 billion at December 31, 2011 and $2.3 billion and $2.8 billion at December 31, 2010 which has been reduced by the amount of cash collateral applied of $9.3 billion and $1.2 billion at December 31, 2011 and $13.0 billion and $1.6 billion at December 31, 2010. Derivative assets were collateralized by other marketable securities of $242 million and $1.7 billion at December 31, 2011 and $96 million and $743 million at December 31, 2010. (2) At December 31, 2010, total cross-border exposure for Japan was $17.0 billion, representing 0.75 percent of total assets. Tables 43 and 44 present commercial real estate credit quality data by non-homebuilder and homebuilder property types. The homebuilder portfolio presented in Tables 42, 43 and 44 includes condominiums and other residential real estate. Other property types in Tables 42, 43 and 44 primarily include special purpose, nursing/retirement homes, medical facilities and restaurants, as well as unsecured loans to borrowers whose primary business is commercial real estate. Table 43 Commercial Real Estate Credit Quality Data
<table><tr><td>Table 43</td><td colspan="4">Commercial Real Estate Credit Quality Data December 31</td></tr><tr><td></td><td colspan="2">Nonperforming Loans andForeclosed Properties<sup>-1</sup></td><td colspan="2">Utilized ReservableCriticized Exposure<sup>-2</sup></td></tr><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td></tr><tr><td>Non-homebuilder</td><td></td><td></td><td></td><td></td></tr><tr><td>Office</td><td>$807</td><td>$1,061</td><td>$2,375</td><td>$3,956</td></tr><tr><td>Multi-family rental</td><td>339</td><td>500</td><td>1,604</td><td>2,940</td></tr><tr><td>Shopping centers/retail</td><td>561</td><td>1,000</td><td>1,378</td><td>2,837</td></tr><tr><td>Industrial/warehouse</td><td>521</td><td>420</td><td>1,317</td><td>1,878</td></tr><tr><td>Multi-use</td><td>345</td><td>483</td><td>971</td><td>1,316</td></tr><tr><td>Hotels/motels</td><td>173</td><td>139</td><td>716</td><td>1,191</td></tr><tr><td>Land and land development</td><td>530</td><td>820</td><td>749</td><td>1,420</td></tr><tr><td>Other</td><td>223</td><td>168</td><td>997</td><td>1,604</td></tr><tr><td>Total non-homebuilder</td><td>3,499</td><td>4,591</td><td>10,107</td><td>17,142</td></tr><tr><td>Homebuilder</td><td>993</td><td>1,963</td><td>1,418</td><td>3,376</td></tr><tr><td>Total commercial real estate</td><td>$4,492</td><td>$6,554</td><td>$11,525</td><td>$20,518</td></tr></table>
Table 44 Commercial Real Estate Net Charge-offs and Related Ratios
<table><tr><td>Table 44</td><td colspan="4">Commercial Real Estate Net Charge-offs and Related Ratios</td></tr><tr><td></td><td colspan="2">Net Charge-offs</td><td colspan="2">Net Charge-off Ratios<sup>-1</sup></td></tr><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td></tr><tr><td>Non-homebuilder</td><td></td><td></td><td></td><td></td></tr><tr><td>Office</td><td>$126</td><td>$273</td><td>1.51%</td><td>2.49%</td></tr><tr><td>Multi-family rental</td><td>36</td><td>116</td><td>0.52</td><td>1.21</td></tr><tr><td>Shopping centers/retail</td><td>184</td><td>318</td><td>2.69</td><td>3.56</td></tr><tr><td>Industrial/warehouse</td><td>88</td><td>59</td><td>1.94</td><td>1.07</td></tr><tr><td>Multi-use</td><td>61</td><td>143</td><td>1.63</td><td>2.92</td></tr><tr><td>Hotels/motels</td><td>23</td><td>45</td><td>0.86</td><td>1.02</td></tr><tr><td>Land and land development</td><td>152</td><td>377</td><td>7.58</td><td>13.04</td></tr><tr><td>Other</td><td>19</td><td>220</td><td>0.33</td><td>3.14</td></tr><tr><td>Total non-homebuilder</td><td>689</td><td>1,551</td><td>1.67</td><td>2.86</td></tr><tr><td>Homebuilder</td><td>258</td><td>466</td><td>8.00</td><td>8.26</td></tr><tr><td>Total commercial real estate</td><td>$947</td><td>$2,017</td><td>2.13</td><td>3.37</td></tr></table>
(1) Net charge-off ratios are calculated as net charge-offs divided by average outstanding loans excluding loans accounted for under the fair value option. At December 31, 2011, total committed non-homebuilder exposure was $53.1 billion compared to $64.2 billion at December 31, 2010, with the decrease due to exposure reductions in all non-homebuilder property types. Non-homebuilder nonperforming loans and foreclosed properties were $3.5 billion and $4.6 billion at December 31, 2011 and 2010, which represented 9.29 percent and 10.08 percent of total nonhomebuilder loans and foreclosed properties. Non-homebuilder utilized reservable criticized exposure decreased to $10.1 billion, or 25.34 percent of non-homebuilder utilized reservable exposure, at December 31, 2011 compared to $17.1 billion, or 35.55 percent, at December 31, 2010. The decrease in reservable criticized exposure was driven primarily by office, shopping centers/retail and multi-family rental property types. For the nonhomebuilder portfolio, net charge-offs decreased $862 million in 2011 due in part to resolution of criticized assets through payoffs and sales. At December 31, 2011, we had committed homebuilder exposure of $3.9 billion compared to $6.0 billion at December 31, 2010, of which $2.4 billion and $4.3 billion were funded secured loans. The decline in homebuilder committed exposure was due to repayments, net charge-offs, reductions in new home construction and continued risk mitigation initiatives with market conditions providing fewer origination opportunities to offset the reductions. Homebuilder nonperforming loans and foreclosed properties decreased $970 million due to repayments, a decline in the volume of loans being downgraded to nonaccrual status and net charge-offs. Homebuilder utilized reservable criticized exposure decreased $2.0 billion to $1.4 billion due to repayments and net charge-offs. The nonperforming loans, leases and foreclosed properties and the utilized reservable criticized ratios for the homebuilder portfolio were 38.89 percent and 54.65 percent at December 31, 2011 compared to 42.80 percent and 74.27 percent at December 31, 2010. Net charge-offs for the homebuilder portfolio decreased $208 million in 2011. Capital Management During 2015, we repurchased approximately $2.4 billion of common stock, with an average price of $16.92 per share, in connection with our 2015 Comprehensive Capital Analysis and Review (CCAR) capital plan, which included a request to repurchase $4.0 billion of common stock over five quarters beginning in the second quarter of 2015, and to maintain the quarterly common stock dividend at the current rate of $0.05 per share. Based on the conditional non-objection we received from the Federal Reserve on our 2015 CCAR submission, we were required to resubmit our CCAR capital plan by September 30, 2015 and address certain weaknesses the Federal Reserve identified in our capital planning process. We have established plans and taken actions which addressed the identified weaknesses, and we resubmitted our CCAR capital plan on September 30, 2015. The Federal Reserve announced that it did not object to our resubmitted CCAR capital plan on December 10, 2015. As an Advanced approaches institution, under Basel 3, we were required to complete a qualification period (parallel run) to demonstrate compliance with the Basel 3 Advanced approaches capital framework to the satisfaction of U. S. banking regulators. We received approval to begin using the Advanced approaches capital framework to determine risk-based capital requirements beginning in the fourth quarter of 2015. As previously disclosed, with the approval to exit parallel run, U. S. banking regulators requested modifications to certain internal analytical models including the wholesale (e. g. , commercial) credit models. All requested modifications were incorporated, which increased our risk-weighted assets, and are reflected in the risk-based ratios in the fourth quarter of 2015. Having exited parallel run on October 1, 2015, we are required to report regulatory risk-based capital ratios and risk-weighted assets under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy including under the Prompt Corrective Action (PCA) framework and was the Advanced approaches in the fourth quarter of 2015. For additional information, see Capital Management on page 51. Trust Preferred Securities On December 29, 2015, the Corporation provided notice of the redemption on January 29, 2016 of all trust preferred securities of Merrill Lynch Preferred Capital Trust III, Merrill Lynch Preferred Capital Trust IV and Merrill Lynch Preferred Capital Trust V (the Trust Preferred Securities). In connection with the Corporation’s acquisition of Merrill Lynch & Co. , Inc. in 2009, the Corporation recorded a discount to par value as purchase accounting adjustments associated with the Trust Preferred Securities. The Corporation recorded a $612 million charge to net interest income related to the discount on these securities. New Accounting Guidance on Recognition and Measurement of Financial Instruments In January 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance on recognition and measurement of financial instruments. The Corporation has early adopted, retrospective to January 1, 2015, the provision that requires the Corporation to present unrealized gains and losses resulting from changes in the Corporation’s own credit spreads on liabilities accounted for under the fair value option (referred to as debit valuation adjustments, or DVA) in accumulated other comprehensive income (OCI). The impact of the adoption was to reclassify, as of January 1, 2015, unrealized DVA losses of $2.0 billion pretax ($1.2 billion after tax) from retained earnings to accumulated OCI. Further, pretax unrealized DVA gains of $301 million, $301 million and $420 million were reclassified from other income to accumulated OCI for the third, second and first quarters of 2015, respectively. This had the effect of reducing net income as previously reported for the aforementioned quarters by $187 million, $186 million and $260 million, or approximately $0.02 per share in each quarter. This change is reflected in consolidated results and the Global Markets segment results. Results for 2014 were not subject to restatement under the provisions of the new accounting guidance. Selected Financial Data Table 1 provides selected consolidated financial data for 2015 and 2014. |
0.18182 | what was the percentage change in fuel surcharge revenues from 2011 to 2012? | Table 58 — Selected Quarterly Income Statement Data(1)
<table><tr><td></td><td colspan="4">2009</td></tr><tr><td></td><td>Fourth</td><td>Third</td><td>Second</td><td>First</td></tr><tr><td colspan="5">(Dollar amounts in thousands, except per share amounts)</td></tr><tr><td>Interest income</td><td>$551,335</td><td>$553,846</td><td>$563,004</td><td>$569,957</td></tr><tr><td>Interest expense</td><td>177,271</td><td>191,027</td><td>213,105</td><td>232,452</td></tr><tr><td>Net interest income</td><td>374,064</td><td>362,819</td><td>349,899</td><td>337,505</td></tr><tr><td>Provision for credit losses</td><td>893,991</td><td>475,136</td><td>413,707</td><td>291,837</td></tr><tr><td>Net interest (loss) income after provision for credit losses</td><td>-519,927</td><td>-112,317</td><td>-63,808</td><td>45,668</td></tr><tr><td>Total noninterest income</td><td>244,546</td><td>256,052</td><td>265,945</td><td>239,102</td></tr><tr><td>Total noninterest expense</td><td>322,596</td><td>401,097</td><td>339,982</td><td>2,969,769</td></tr><tr><td>Loss before income taxes</td><td>-597,977</td><td>-257,362</td><td>-137,845</td><td>-2,684,999</td></tr><tr><td>Benefit for income taxes</td><td>-228,290</td><td>-91,172</td><td>-12,750</td><td>-251,792</td></tr><tr><td>Net loss</td><td>$-369,687</td><td>$-166,190</td><td>$-125,095</td><td>$-2,433,207</td></tr><tr><td>Dividends on preferred shares</td><td>29,289</td><td>29,223</td><td>57,451</td><td>58,793</td></tr><tr><td> Net loss applicable to common shares</td><td>$-398,976</td><td>$-195,413</td><td>$-182,546</td><td>$-2,492,000</td></tr><tr><td> Common shares outstanding</td><td></td><td></td><td></td><td></td></tr><tr><td>Average — basic</td><td>715,336</td><td>589,708</td><td>459,246</td><td>366,919</td></tr><tr><td>Average — diluted-2</td><td>715,336</td><td>589,708</td><td>459,246</td><td>366,919</td></tr><tr><td>Ending</td><td>715,762</td><td>714,469</td><td>568,741</td><td>390,682</td></tr><tr><td>Book value per share</td><td>$5.10</td><td>$5.59</td><td>$6.23</td><td>$7.80</td></tr><tr><td>Tangible book value per share-3</td><td>4.21</td><td>4.69</td><td>5.07</td><td>6.08</td></tr><tr><td> Per common share</td><td></td><td></td><td></td><td></td></tr><tr><td>Net loss- basic</td><td>$-0.56</td><td>$-0.33</td><td>$-0.40</td><td>$-6.79</td></tr><tr><td>Net loss — diluted</td><td>-0.56</td><td>-0.33</td><td>-0.40</td><td>-6.79</td></tr><tr><td>Cash dividends declared</td><td>0.0100</td><td>0.0100</td><td>0.0100</td><td>0.0100</td></tr><tr><td> Common stock price, per share</td><td></td><td></td><td></td><td></td></tr><tr><td>High-4</td><td>$4.770</td><td>$4.970</td><td>$6.180</td><td>$8.000</td></tr><tr><td>Low-4</td><td>3.500</td><td>3.260</td><td>1.550</td><td>1.000</td></tr><tr><td>Close</td><td>3.650</td><td>4.710</td><td>4.180</td><td>1.660</td></tr><tr><td>Average closing price</td><td>3.970</td><td>4.209</td><td>3.727</td><td>2.733</td></tr><tr><td>Return on average total assets</td><td>-2.80%</td><td>-1.28%</td><td>-0.97%</td><td>-18.22%</td></tr><tr><td>Return on average common shareholders’ equity</td><td>-39.1</td><td>-21.5</td><td>-23.0</td><td>-188.9</td></tr><tr><td>Return on average tangible common shareholders’ equity-5</td><td>-45.1</td><td>-24.7</td><td>-27.2</td><td>-479.2</td></tr><tr><td>Efficiency ratio-6</td><td>49.0</td><td>61.4</td><td>51.0</td><td>60.5</td></tr><tr><td>Effective tax rate (benefit)</td><td>-38.2</td><td>-35.4</td><td>-9.2</td><td>-9.4</td></tr><tr><td>Margin analysis-as a % of average earning assets-7</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest income-7</td><td>4.70%</td><td>4.86%</td><td>4.99%</td><td>4.99%</td></tr><tr><td>Interest expense</td><td>1.51</td><td>1.66</td><td>1.89</td><td>2.02</td></tr><tr><td>Net interest margin-7</td><td>3.19%</td><td>3.20%</td><td>3.10%</td><td>2.97%</td></tr><tr><td> Revenue — FTE</td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$374,064</td><td>$362,819</td><td>$349,899</td><td>$337,505</td></tr><tr><td>FTE adjustment</td><td>2,497</td><td>4,177</td><td>1,216</td><td>3,582</td></tr><tr><td>Net interest income-7</td><td>376,561</td><td>366,996</td><td>351,115</td><td>341,087</td></tr><tr><td>Noninterest income</td><td>244,546</td><td>256,052</td><td>265,945</td><td>239,102</td></tr><tr><td> Total revenue-7</td><td>$621,107</td><td>$623,048</td><td>$617,060</td><td>$580,189</td></tr><tr><td>Continued</td><td></td><td></td><td></td><td></td></tr></table>
Consolidated Financial Statements. A list of trust-preferred securities outstanding at December 31, 2010 follows:
<table><tr><td> (Dollar amounts in thousands)</td><td> Rate</td><td></td><td> Principal Amount of Subordinated Note/ Debenture Issued to Trust -1</td><td> Investment in Unconsolidated Subsidiary -2</td></tr><tr><td>Huntington Capital I</td><td>0.99</td><td>-3</td><td>$138,816</td><td>$6,186</td></tr><tr><td>Huntington Capital II</td><td>0.93</td><td>-4</td><td>60,093</td><td>3,093</td></tr><tr><td>Huntington Capital III</td><td>6.69</td><td></td><td>114,072</td><td>10</td></tr><tr><td>BancFirst Ohio Trust Preferred</td><td>8.54</td><td></td><td>23,248</td><td>619</td></tr><tr><td>Sky Financial Capital Trust I</td><td>8.52</td><td></td><td>64,474</td><td>1,856</td></tr><tr><td>Sky Financial Capital Trust II</td><td>3.52</td><td>-5</td><td>30,929</td><td>929</td></tr><tr><td>Sky Financial Capital Trust III</td><td>1.28</td><td>-6</td><td>77,481</td><td>2,320</td></tr><tr><td>Sky Financial Capital Trust IV</td><td>1.27</td><td>-6</td><td>77,482</td><td>2,320</td></tr><tr><td>Prospect Trust I</td><td>3.54</td><td>-7</td><td>6,186</td><td>186</td></tr><tr><td> Total</td><td></td><td></td><td>$592,781</td><td>$17,519</td></tr></table>
(1) Represents the principal amount of debentures issued to each trust, including unamortized original issue discount. (2) Huntington’s investment in the unconsolidated trusts represents the only risk of loss. (3) Variable effective rate at December 31, 2010, based on three month LIBOR + 0.70. (4) Variable effective rate at December 31, 2010, based on three month LIBOR + 0.625. (5) Variable effective rate at December 31, 2010, based on three month LIBOR + 2.95. (6) Variable effective rate at December 31, 2010, based on three month LIBOR + 1.40. (7) Variable effective rate at December 31, 2010, based on three month LIBOR + 3.25. Each issue of the junior subordinated debentures has an interest rate equal to the corresponding trust securities distribution rate. Huntington has the right to defer payment of interest on the debentures at any time, or from time to time for a period not exceeding five years, provided that no extension period may extend beyond the stated maturity of the related debentures. During any such extension period, distributions to the trust securities will also be deferred and Huntington’s ability to pay dividends on its common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to trust securities are guaranteed by Huntington to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to all indebtedness of the Company to the same extent as the junior subordinated debt. The guarantee does not place a limitation on the amount of additional indebtedness that may be incurred by Huntington. Low Income Housing Tax Credit Partnerships Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the Low Income Housing Tax Credit pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity. Huntington does not own a majority of the limited partnership interests in these entities and is not the primary beneficiary. Huntington uses the equity method to account for the majority of its investments in these entities. These investments are included in accrued income and other assets. At December 31, 2010 and 2009, Huntington has commitments of $316.0 million and $285.3 million, respectively, of which $260.1 million and Financial Expectations – We are cautious about the economic environment, but, assuming that industrial production grows approximately 3% as projected, volume should exceed 2013 levels. Even with no volume growth, we expect earnings to exceed 2013 earnings, generated by core pricing gains, on-going network improvements and productivity initiatives. We expect that free cash flow for 2014 will be lower than 2013 as higher cash from operations will be more than offset by additional cash of approximately $400 million that will be used to pay income taxes that were previously deferred through bonus depreciation, increased capital spend and higher dividend payments. RESULTS OF OPERATIONS Operating Revenues
<table><tr><td><i>Millions</i></td><td><i>2013</i></td><td><i>2012</i></td><td><i>2011</i></td><td><i>% Change 2013 v 2012</i></td><td><i>% Change 2012 v 2011</i></td></tr><tr><td>Freight revenues</td><td>$20,684</td><td>$19,686</td><td>$18,508</td><td>5%</td><td>6%</td></tr><tr><td>Other revenues</td><td>1,279</td><td>1,240</td><td>1,049</td><td>3</td><td>18</td></tr><tr><td>Total</td><td>$21,963</td><td>$20,926</td><td>$19,557</td><td>5%</td><td>7%</td></tr></table>
We generate freight revenues by transporting freight or other materials from our six commodity groups. Freight revenues vary with volume (carloads) and ARC. Changes in price, traffic mix and fuel surcharges drive ARC. We provide some of our customers with contractual incentives for meeting or exceeding specified cumulative volumes or shipping to and from specific locations, which we record as reductions to freight revenues based on the actual or projected future shipments. We recognize freight revenues as shipments move from origin to destination. We allocate freight revenues between reporting periods based on the relative transit time in each reporting period and recognize expenses as we incur them. Other revenues include revenues earned by our subsidiaries, revenues from our commuter rail operations, and accessorial revenues, which we earn when customers retain equipment owned or controlled by us or when we perform additional services such as switching or storage. We recognize other revenues as we perform services or meet contractual obligations. Freight revenues from five of our six commodity groups increased during 2013 compared to 2012. Revenue from agricultural products was down slightly compared to 2012. ARC increased 5%, driven by core pricing gains, shifts in business mix and an automotive logistics management arrangement. Volume was essentially flat year over year as growth in automotives, frac sand, crude oil and domestic intermodal offset declines in coal, international intermodal and grain shipments. Freight revenues from four of our six commodity groups increased during 2012 compared to 2011. Revenues from coal and agricultural products declined during the year. Our franchise diversity allowed us to take advantage of growth from shale-related markets (crude oil, frac sand and pipe) and strong automotive manufacturing, which offset volume declines from coal and agricultural products. ARC increased 7%, driven by core pricing gains and higher fuel cost recoveries. Improved fuel recovery provisions and higher fuel prices, including the lag effect of our programs (surcharges trail fluctuations in fuel price by approximately two months), combined to increase revenues from fuel surcharges. Our fuel surcharge programs generated freight revenues of $2.6 billion, $2.6 billion, and $2.2 billion in 2013, 2012, and 2011, respectively. Fuel surcharge in 2013 was essentially flat versus 2012 as lower fuel price offset improved fuel recovery provisions and the lag effect of our programs (surcharges trail fluctuations in fuel price by approximately two months). Rising fuel prices and more shipments subject to fuel surcharges drove the increase from 2011 to 2012. In 2013, other revenue increased from 2012 due primarily to miscellaneous contract revenue and higher revenues at our subsidiaries that broker intermodal and automotive services. In 2012, other revenues increased from 2011 due primarily to higher revenues at our subsidiaries that broker intermodal and automotive services. Assessorial revenues also increased in 2012 due to container revenue related to an increase in intermodal shipments. |
31,733,712 | What's the sum of Unvested at December 31, 2018 of Shares, and Adjusted balance, beginning of period of Benefit plans ? | 7. INCENTIVE PLANS Discretionary Annual Incentive Awards Citigroup grants immediate cash bonus payments and various forms of immediate and deferred awards as part of its discretionary annual incentive award program involving a large segment of Citigroup’s employees worldwide. Most of the shares of common stock issued by Citigroup as part of its equity compensation programs are to settle the vesting of the stock components of these awards. Discretionary annual incentive awards are generally awarded in the first quarter of the year based on the previous year’s performance. Awards valued at less than U. S. $100,000 (or the local currency equivalent) are generally paid entirely in the form of an immediate cash bonus. Pursuant to Citigroup policy and/or regulatory requirements, certain employees and officers are subject to mandatory deferrals of incentive pay and generally receive 25%– 60% of their awards in a combination of restricted or deferred stock, deferred cash stock units or deferred cash. Discretionary annual incentive awards to many employees in the EU are subject to deferral requirements regardless of the total award value, with at least 50% of the immediate incentive delivered in the form of a stock payment award subject to a restriction on sale or transfer (generally, for 12 months). Deferred annual incentive awards may be delivered in the form of one or more award types: a restricted or deferred stock award under Citi’s Capital Accumulation Program (CAP), or a deferred cash stock unit award and/or a deferred cash award under Citi’s Deferred Cash Award Plan. The applicable mix of awards may vary based on the employee’s minimum deferral requirement and the country of employment. Subject to certain exceptions (principally, for retirement-eligible employees), continuous employment within Citigroup is required to vest in CAP, deferred cash stock unit and deferred cash awards. Post employment vesting by retirement-eligible employees and participants who meet other conditions is generally conditioned upon their refraining from competition with Citigroup during the remaining vesting period, unless the employment relationship has been terminated by Citigroup under certain conditions. Generally, the deferred awards vest in equal annual installments over three- or four-year periods. Vested CAP awards are delivered in shares of common stock. Deferred cash awards are payable in cash and, except as prohibited by applicable regulatory guidance, earn a fixed notional rate of interest that is paid only if and when the underlying principal award amount vests. Deferred cash stock unit awards are payable in cash at the vesting value of the underlying stock. Generally, in the EU, vested CAP shares are subject to a restriction on sale or transfer after vesting, and vested deferred cash awards and deferred cash stock units are subject to hold back (generally, for 12 months in each case). Unvested CAP, deferred cash stock units and deferred cash awards are subject to one or more clawback provisions that apply in certain circumstances, including gross misconduct. CAP and deferred cash stock unit awards, made to certain employees, are subject to a formulaic performancebased vesting condition pursuant to which amounts otherwise scheduled to vest will be reduced based on the amount of any pretax loss in the participant’s business in the calendar year preceding the scheduled vesting date. A minimum reduction of 20% applies for the first dollar of loss for CAP and deferred cash stock unit awards. In addition, deferred cash awards are subject to a discretionary performance-based vesting condition under which an amount otherwise scheduled to vest may be reduced in the event of a “material adverse outcome” for which a participant has “significant responsibility. ” These awards are also subject to an additional clawback provision pursuant to which unvested awards may be canceled if the employee engaged in misconduct or exercised materially imprudent judgment, or failed to supervise or escalate the behavior of other employees who did. Sign-on and Long-Term Retention Awards Stock awards and deferred cash awards may be made at various times during the year as sign-on awards to induce new hires to join Citi or to highpotential employees as long-term retention awards. Vesting periods and other terms and conditions pertaining to these awards tend to vary by grant. Generally, recipients must remain employed through the vesting dates to vest in the awards, except in cases of death, disability or involuntary termination other than for gross misconduct. These awards do not usually provide for post employment vesting by retirement-eligible participants. Outstanding (Unvested) Stock Awards A summary of the status of unvested stock awards granted as discretionary annual incentive or sign-on and long-term retention awards is presented below:
<table><tr><td>Unvested stock awards</td><td>Shares</td><td>Weighted-average grantdate fairvalue per share</td></tr><tr><td>Unvested at December 31, 2017</td><td>36,931,040</td><td>$47.89</td></tr><tr><td>Granted<sup>-1</sup></td><td>12,896,599</td><td>73.87</td></tr><tr><td>Canceled</td><td>-1,315,456</td><td>54.50</td></tr><tr><td>Vested<sup>-2</sup></td><td>-16,783,587</td><td>49.54</td></tr><tr><td>Unvested at December 31, 2018</td><td>31,728,596</td><td>$57.30</td></tr></table>
(1) The weighted-average fair value of the shares granted during 2017 and 2016 was $59.12 and $37.35, respectively. (2) The weighted-average fair value of the shares vesting during 2018 was approximately $77.65 per share. Total unrecognized compensation cost related to unvested stock awards was $538 million at December 31, 2018. The cost is expected to be recognized over a weighted-average period of 1.7 years. 19. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI) Changes in each component of Citigroup鈥檚 Accumulated other comprehensive income (loss) were as follows:
<table><tr><td>In millions of dollars</td><td>Netunrealizedgains (losses)on investment securities</td><td>Debt valuation adjustment (DVA)<sup>(1)</sup></td><td>Cash flow hedges<sup>-2</sup></td><td>Benefit plans<sup>-3</sup></td><td>Foreigncurrencytranslationadjustment (CTA), net of hedges<sup>(4)</sup></td><td>Excluded component of fair value hedges<sup>-5</sup></td><td>Accumulatedothercomprehensive income (loss)</td></tr><tr><td>Balance, December 31, 2015</td><td>$-907</td><td>$—</td><td>$-617</td><td>$-5,116</td><td>$-22,704</td><td>$—</td><td>$-29,344</td></tr><tr><td>Adjustment to opening balance, netof taxes<sup>-1</sup></td><td>$—</td><td>$-15</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$-15</td></tr><tr><td>Adjusted balance, beginning of period</td><td>$-907</td><td>$-15</td><td>$-617</td><td>$-5,116</td><td>$-22,704</td><td>$—</td><td>$-29,359</td></tr><tr><td>Other comprehensive income beforereclassifications</td><td>$531</td><td>$-335</td><td>$-88</td><td>$-208</td><td>$-2,802</td><td>$—</td><td>$-2,902</td></tr><tr><td>Increase (decrease) due to amountsreclassified from AOCI<sup></sup></td><td>-423</td><td>-2</td><td>145</td><td>160</td><td>—</td><td>—</td><td>-120</td></tr><tr><td>Change, net of taxes<sup></sup></td><td>$108</td><td>$-337</td><td>$57</td><td>$-48</td><td>$-2,802</td><td>$—</td><td>$-3,022</td></tr><tr><td>Balance, December 31, 2016</td><td>$-799</td><td>$-352</td><td>$-560</td><td>$-5,164</td><td>$-25,506</td><td>$—</td><td>$-32,381</td></tr><tr><td>Adjustment to opening balance, netof taxes<sup>-6</sup></td><td>$504</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$504</td></tr><tr><td>Adjusted balance, beginning of period</td><td>$-295</td><td>$-352</td><td>$-560</td><td>$-5,164</td><td>$-25,506</td><td>$—</td><td>$-31,877</td></tr><tr><td>Impact of Tax Reform<sup>-7</sup></td><td>-223</td><td>-139</td><td>-113</td><td>-1,020</td><td>-1,809</td><td>—</td><td>-3,304</td></tr><tr><td>Other comprehensive income before reclassifications</td><td>-186</td><td>-426</td><td>-111</td><td>-158</td><td>1,607</td><td>—</td><td>726</td></tr><tr><td>Increase (decrease) due to amounts reclassified from AOCI</td><td>-454</td><td>-4</td><td>86</td><td>159</td><td>—</td><td>—</td><td>-213</td></tr><tr><td>Change, net of taxes<sup></sup></td><td>$-863</td><td>$-569</td><td>$-138</td><td>$-1,019</td><td>$-202</td><td>$—</td><td>$-2,791</td></tr><tr><td>Balance at December 31, 2017</td><td>$-1,158</td><td>$-921</td><td>$-698</td><td>$-6,183</td><td>$-25,708</td><td>$—</td><td>$-34,668</td></tr><tr><td>Adjustment to opening balance, netof taxes<sup>-8</sup></td><td>-3</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-3</td></tr><tr><td>Adjusted balance, beginning of period</td><td>$-1,161</td><td>$-921</td><td>$-698</td><td>$-6,183</td><td>$-25,708</td><td>$—</td><td>$-34,671</td></tr><tr><td>Other comprehensive income beforereclassifications</td><td>-866</td><td>1,081</td><td>-135</td><td>-240</td><td>-2,607</td><td>-57</td><td>-2,824</td></tr><tr><td>Increase (decrease) due to amountsreclassified from AOCI<sup>(9)</sup></td><td>-223</td><td>32</td><td>105</td><td>166</td><td>245</td><td>—</td><td>325</td></tr><tr><td>Change, net of taxes</td><td>$-1,089</td><td>$1,113</td><td>$-30</td><td>$-74</td><td>$-2,362</td><td>$-57</td><td>$-2,499</td></tr><tr><td>Balance at December 31, 2018</td><td>$-2,250</td><td>$192</td><td>$-728</td><td>$-6,257</td><td>$-28,070</td><td>$-57</td><td>$-37,170</td></tr></table>
(1)Changes in DVA are reflected as a component of AOCI, pursuant to the adoption of only the provisions of ASU 2016-01 relating to the presentation of DVA on fair value option liabilities. See Note 1 to the Consolidated Financial Statements. (2)Primarily driven by Citi鈥檚 pay fixed/receive floating interest rate swap programs that hedge the floating rates on liabilities. (3)Primarily reflects adjustments based on the quarterly actuarial valuations of Citi鈥檚 significant pension and postretirement plans, annual actuarial valuations of all other plans and amortization of amounts previously recognized in Other comprehensive income. (4)Primarily reflects the movements in (by order of impact) the Brazilian real, Indian rupee, Mexican peso, and Australian dollar against the U. S. dollar and changes in related tax effects and hedges for the year ended Primarily reflects the movements in (by order of impact) the Brazilian real, Indian rupee, Mexican peso, and Australian dollar against the U. S. dollar and changes in related tax effects and hedges for the year ended December聽31, 2018. Primarily reflects the movements in (by order of impact) the Euro, Mexican peso, Polish zloty and Korean won against the U. S. dollar and changes in related tax effects and hedges for the year ended December聽31, 2017. Primarily reflects the movements in (by order of impact) the Mexican peso, Euro, British pound and Indian rupee against the U. S. dollar and changes in related tax effects and hedges for the year ended December聽31, 2016. (5)Beginning in the first quarter of 2018, changes in the excluded component of fair value hedges are reflected as a component of AOCI, pursuant to the early adoption of ASU No.2017-12, Targeted Improvements to Accounting for Hedging Activities. See Note 1 of the Consolidated Financial Statements for further information regarding this change. (6)In the second quarter of 2017, Citi early adopted ASU No.2017-08. 聽Upon adoption, a cumulative effect adjustment was recorded to reduce Retained earnings, effective January 1, 2017, for the incremental amortization of cumulative fair value hedge adjustments on callable state and municipal debt securities. See Note 1 to the Consolidated Financial Statements. (7)In the fourth quarter of 2017, Citi adopted ASU 2018-02, which transferred these amounts from AOCI to Retained earnings. See Note 1 to the Consolidated Financial Statements. (8)Citi adopted ASU 2016-01 and ASU 2018-03 on January 1, 2018. Upon adoption, a cumulative effect adjustment was recorded from AOCI to Retained earnings for net unrealized gains on former AFS equity securities. For additional information, see Note 1 to the Consolidated Financial Statements (9)Includes the impact of the release upon meeting the accounting trigger for substantial liquidation of Citi鈥檚 Japan Consumer Finance business during the fourth quarter of 2018. See Note 1 to the Consolidated Financial Statements. Cash Flow Hedges Citigroup hedges the variability of forecasted cash flows associated with floating-rate assets/liabilities and other forecasted transactions. Variable cash flows from those liabilities are synthetically converted to fixed-rate cash flows by entering into receive-variable, pay-fixed interest rate swaps and receivevariable, pay-fixed forward-starting interest rate swaps. Variable cash flows associated with certain assets are synthetically converted to fixed-rate cash flows by entering into receive-fixed, pay-variable interest rate swaps. These cash flow hedging relationships use either regression analysis or dollar-offset ratio analysis to assess whether the hedging relationships are highly effective at inception and on an ongoing basis. Prior to the adoption of ASU 2017-12, Citigroup designated the risk being hedged as the risk of overall variability in the hedged cash flows for certain items. With the adoption of ASU 2017-12, Citigroup hedges the variability from changes in a contractually specified rate and recognizes the entire change in fair value of the cash flow hedging instruments in AOCI. Prior to the adoption of ASU 2017-12, to the extent that these derivatives were not fully effective, changes in their fair values in excess of changes in the value of the hedged transactions were immediately included in Other revenue. With the adoption of ASU 2017-12, such amounts are no longer required to be immediately recognized in income, but instead the full change in the value of the hedging instrument is required to be recognized in AOCI, and then recognized in earnings in the same period that the cash flows impact earnings. The pretax change in AOCI from cash flow hedges is presented below:
<table><tr><td></td><td colspan="4">Year ended December 31,</td></tr><tr><td>In millions of dollars</td><td colspan="2">2018</td><td>2017</td><td>2016</td></tr><tr><td>Amount of gain (loss) recognized in AOCI on derivative</td><td colspan="2"></td><td></td><td></td></tr><tr><td>Interest rate contracts<sup>-1</sup></td><td>$-361</td><td></td><td>$-165</td><td>$-219</td></tr><tr><td>Foreign exchange contracts</td><td colspan="2">5</td><td>-8</td><td>69</td></tr><tr><td>Total gain (loss) recognized in AOCI</td><td>$-356</td><td></td><td>$-173</td><td>$-150</td></tr><tr><td>Amount of gain (loss) reclassified from AOCI to earnings</td><td>Otherrevenue</td><td>Net interestrevenue</td><td>Otherrevenue</td><td>Otherrevenue</td></tr><tr><td>Interest rate contracts<sup>-1</sup></td><td>$—</td><td>$-301</td><td>$-126</td><td>$-140</td></tr><tr><td>Foreign exchange contracts</td><td>-17</td><td>—</td><td>-10</td><td>-93</td></tr><tr><td>Total gain (loss) reclassified from AOCI into earnings</td><td>$-17</td><td>$-301</td><td>$-136</td><td>$-233</td></tr></table>
(1) After January 1, 2018, all amounts reclassified into earnings for interest rate contracts are included in Interest income/Interest expense (Net interest revenue). For all other hedges, including interest rate hedges prior to January 1, 2018, the amounts reclassified to earnings are included primarily in Other revenue and Net interest revenue in the Consolidated Statement of Income. For cash flow hedges, the changes in the fair value of the hedging derivative remain in AOCI on the Consolidated Balance Sheet and will be included in the earnings of future periods to offset the variability of the hedged cash flows when such cash flows affect earnings. The net gain (loss) associated with cash flow hedges expected to be reclassified from AOCI within 12?months of December?31, 2018 is approximately $404 million. The maximum length of time over which forecasted cash flows are hedged is 10 years. The after-tax impact of cash flow hedges on AOCI is shown in Note?19 to the Consolidated Financial Statements. The following tables present information about Citi’s guarantees:
<table><tr><td></td><td colspan="3">Maximum potential amount of future payments</td><td></td></tr><tr><td>In billions of dollars at December 31, 2018, except carrying value in millions</td><td>Expire within1 year</td><td>Expire after1 year</td><td>Total amountoutstanding</td><td>Carrying value(in millions of dollars)</td></tr><tr><td>Financial standby letters of credit</td><td>$31.8</td><td>$65.3</td><td>$97.1</td><td>$131</td></tr><tr><td>Performance guarantees</td><td>7.7</td><td>4.2</td><td>11.9</td><td>29</td></tr><tr><td>Derivative instruments considered to be guarantees</td><td>23.5</td><td>87.4</td><td>110.9</td><td>567</td></tr><tr><td>Loans sold with recourse</td><td>—</td><td>1.2</td><td>1.2</td><td>9</td></tr><tr><td>Securities lending indemnifications<sup>-1</sup></td><td>98.3</td><td>—</td><td>98.3</td><td>—</td></tr><tr><td>Credit card merchant processing<sup>-1(2)</sup></td><td>95.0</td><td>—</td><td>95.0</td><td>—</td></tr><tr><td>Credit card arrangements with partners</td><td>0.3</td><td>0.8</td><td>1.1</td><td>162</td></tr><tr><td>Custody indemnifications and other</td><td>—</td><td>35.4</td><td>35.4</td><td>41</td></tr><tr><td>Total</td><td>$256.6</td><td>$194.3</td><td>$450.9</td><td>$939</td></tr></table>
Maximum potential amount of future payments |
44,454.5 | What is the average amount of Land of December 31, 2016, and Interest expense, net of Year Ended December 31, 2014 ? | ITEM 6. SELECTED FINANCIAL DATA The following selected financial data is qualified by reference to, and should be read in conjunction with, the Consolidated Financial Statements, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.
<table><tr><td></td><td colspan="5">Year Ended December 31,</td></tr><tr><td>(In thousands, except per share amounts)</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Net revenues</td><td>$4,825,335</td><td>$3,963,313</td><td>$3,084,370</td><td>$2,332,051</td><td>$1,834,921</td></tr><tr><td>Cost of goods sold</td><td>2,584,724</td><td>2,057,766</td><td>1,572,164</td><td>1,195,381</td><td>955,624</td></tr><tr><td>Gross profit</td><td>2,240,611</td><td>1,905,547</td><td>1,512,206</td><td>1,136,670</td><td>879,297</td></tr><tr><td>Selling, general and administrative expenses</td><td>1,823,140</td><td>1,497,000</td><td>1,158,251</td><td>871,572</td><td>670,602</td></tr><tr><td>Income from operations</td><td>417,471</td><td>408,547</td><td>353,955</td><td>265,098</td><td>208,695</td></tr><tr><td>Interest expense, net</td><td>-26,434</td><td>-14,628</td><td>-5,335</td><td>-2,933</td><td>-5,183</td></tr><tr><td>Other expense, net</td><td>-2,755</td><td>-7,234</td><td>-6,410</td><td>-1,172</td><td>-73</td></tr><tr><td>Income before income taxes</td><td>388,282</td><td>386,685</td><td>342,210</td><td>260,993</td><td>203,439</td></tr><tr><td>Provision for income taxes</td><td>131,303</td><td>154,112</td><td>134,168</td><td>98,663</td><td>74,661</td></tr><tr><td>Net income</td><td>256,979</td><td>232,573</td><td>208,042</td><td>162,330</td><td>128,778</td></tr><tr><td>Adjustment payment to Class C</td><td>59,000</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net income available to all stockholders</td><td>$197,979</td><td>$232,573</td><td>$208,042</td><td>$162,330</td><td>$128,778</td></tr><tr><td>Net income available per common share</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic net income per share of Class A and B common stock</td><td>$0.45</td><td>$0.54</td><td>$0.49</td><td>$0.39</td><td>$0.31</td></tr><tr><td>Basic net income per share of Class C common stock</td><td>$0.72</td><td>$0.54</td><td>$0.49</td><td>$0.39</td><td>$0.31</td></tr><tr><td>Diluted net income per share of Class A and B common stock</td><td>$0.45</td><td>$0.53</td><td>$0.47</td><td>$0.38</td><td>$0.30</td></tr><tr><td>Diluted net income per share of Class C common stock</td><td>$0.71</td><td>$0.53</td><td>$0.47</td><td>$0.38</td><td>$0.30</td></tr><tr><td colspan="6">Weighted average common shares outstanding Class A and B common stock</td></tr><tr><td>Basic</td><td>217,707</td><td>215,498</td><td>213,227</td><td>210,696</td><td>208,686</td></tr><tr><td>Diluted</td><td>221,944</td><td>220,868</td><td>219,380</td><td>215,958</td><td>212,760</td></tr><tr><td colspan="6">Weighted average common shares outstanding Class C common stock</td></tr><tr><td>Basic</td><td>218,623</td><td>215,498</td><td>213,227</td><td>210,696</td><td>208,686</td></tr><tr><td>Diluted</td><td>222,904</td><td>220,868</td><td>219,380</td><td>215,958</td><td>212,760</td></tr><tr><td>Dividends declared</td><td>$59,000</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr></table>
Our net revenues for the full year 2016 were $4,825.3 million, which reflects a revision from the $4,828.2 million reported in our earnings release, filed January 31, 2017, on Form 8-K. This revision reflects a $2.9 million adjustment related to a return credit for footwear that was identified in connection with the closing of our January 2017 books and records, following the earnings release. As a result, other items on our Consolidated Financial Statements have been appropriately adjusted from the amounts provided in the earnings release, including a reduction of our full year 2016 gross profit and income from operations by $2.9 million, and a reduction of net income by $1.7 million.
<table><tr><td></td><td>At December 31,</td></tr><tr><td>(In thousands)</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Cash and cash equivalents</td><td>$250,470</td><td>$129,852</td><td>$593,175</td><td>$347,489</td><td>$341,841</td></tr><tr><td>Working capital -1</td><td>1,279,337</td><td>1,019,953</td><td>1,127,772</td><td>702,181</td><td>651,370</td></tr><tr><td>Inventories</td><td>917,491</td><td>783,031</td><td>536,714</td><td>469,006</td><td>319,286</td></tr><tr><td>Total assets</td><td>3,644,331</td><td>2,865,970</td><td>2,092,428</td><td>1,576,369</td><td>1,155,052</td></tr><tr><td>Total debt, including current maturities</td><td>817,388</td><td>666,070</td><td>281,546</td><td>151,551</td><td>59,858</td></tr><tr><td>Total stockholders’ equity</td><td>$2,030,900</td><td>$1,668,222</td><td>$1,350,300</td><td>$1,053,354</td><td>$816,922</td></tr></table>
(1) Working capital is defined as current assets minus current liabilities. In March 2016, the FASB issued ASU 2016-09, which effects all entities that issue share-based payment awards to their employees. The amendments in this ASU cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. The Company will not early adopt this ASU. The adoption of this guidance may have a material impact on the Company’s effective tax rate and income tax expense, depending in part on whether significant employee stock option exercises occur. In August 2016, the FASB issued ASU 2016-15, which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not believe this ASU will have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, which will require an entity to recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This ASU is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted in the first interim period of 2017. Upon adoption, any deferred charge established upon an intra-company transfer would be recorded as a cumulative-effect adjustment to retained earnings. At December 31, 2016, the Company had a deferred charge of $26.0 million with $1.8 million and $24.2 million recorded within Prepaid expenses and Other long term assets, respectively. The Company plans to adopt this ASU during the interim period ending March 31, 2017. Recently Adopted Accounting Standards In April 2015, the FASB issued ASU 2015-03, which requires costs incurred to issue debt to be presented in the balance sheet as a direct deduction from the carrying value of the debt. This ASU is effective for annual and interim reporting periods beginning after December 15, 2015, with early adoption permitted. The Company adopted the provisions of this ASU in the first quarter of 2016, and reclassified approximately $2.9 million from “Other long term assets” to “Long term debt, net of current maturities” as of December 31, 2015.3. Property and Equipment, Net Property and equipment consisted of the following:
<table><tr><td></td><td colspan="2">December 31,</td></tr><tr><td>(In thousands)</td><td>2016</td><td>2015</td></tr><tr><td>Leasehold and tenant improvements</td><td>$326,617</td><td>$214,834</td></tr><tr><td>Furniture, fixtures and displays</td><td>168,720</td><td>132,736</td></tr><tr><td>Buildings</td><td>47,216</td><td>47,137</td></tr><tr><td>Software</td><td>151,059</td><td>99,309</td></tr><tr><td>Office equipment</td><td>75,196</td><td>50,399</td></tr><tr><td>Plant equipment</td><td>124,140</td><td>118,138</td></tr><tr><td>Land</td><td>83,574</td><td>17,628</td></tr><tr><td>Construction in progress</td><td>204,362</td><td>147,581</td></tr><tr><td>Other</td><td>20,383</td><td>4,002</td></tr><tr><td>Subtotal property and equipment</td><td>1,201,267</td><td>831,764</td></tr><tr><td>Accumulated depreciation</td><td>-397,056</td><td>-293,233</td></tr><tr><td>Property and equipment, net</td><td>$804,211</td><td>$538,531</td></tr></table> |
2,008 | Which year is Total calendar year effect the most? | Table of Contents Earnings Per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, shares to be purchased under the Company’s employee stock purchase plan and unvested RSUs. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The following table shows the computation of basic and diluted earnings per share for 2013, 2012, and 2011 (in thousands, except net income in millions and per share amounts):
<table><tr><td></td><td> 2013</td><td> 2012</td><td> 2011</td></tr><tr><td>Numerator:</td><td></td><td></td><td></td></tr><tr><td>Net income</td><td>$37,037</td><td>$41,733</td><td>$25,922</td></tr><tr><td>Denominator:</td><td></td><td></td><td></td></tr><tr><td>Weighted-average shares outstanding</td><td>925,331</td><td>934,818</td><td>924,258</td></tr><tr><td>Effect of dilutive securities</td><td>6,331</td><td>10,537</td><td>12,387</td></tr><tr><td>Weighted-average diluted shares</td><td>931,662</td><td>945,355</td><td>936,645</td></tr><tr><td>Basic earnings per share</td><td>$40.03</td><td>$44.64</td><td>$28.05</td></tr><tr><td>Diluted earnings per share</td><td>$39.75</td><td>$44.15</td><td>$27.68</td></tr></table>
Potentially dilutive securities representing 4.2 million, 1.0 million and 1.7 million shares of common stock for 2013, 2012 and 2011, respectively, were excluded from the computation of diluted earnings per share for these periods because their effect would have been antidilutive. Financial Instruments Cash Equivalents and Marketable Securities All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company’s marketable debt and equity securities have been classified and accounted for as available-for-sale. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations at each balance sheet date. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable debt securities with maturities of 12 months or less are classified as short-term and marketable debt securities with maturities greater than 12 months are classified as long-term. The Company classifies its marketable equity securities, including mutual funds, as either short-term or long-term based on the nature of each security and its availability for use in current operations. The Company’s marketable debt and equity securities are carried at fair value, with the unrealized gains and losses, net of taxes, reported as a component of shareholders’ equity. The cost of securities sold is based upon the specific identification method. Derivative Financial Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (“AOCI”) in shareholders’ equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or We also record an inventory obsolescence reserve, which represents the difference between the cost of the inventory and its estimated realizable value, based on various product sales projections. This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age, historical trends and requirements to support forecasted sales. In addition, and as necessary, we may establish specific reserves for future known or anticipated events. PENSION AND OTHER POST-RETIREMENT BENEFIT COSTS We offer the following benefits to some or all of our employees: a domestic trust-based noncontributory qualified defined benefit pension plan (“U. S. Qualified Plan”) and an unfunded, non-qualified domestic noncontributory pension plan to provide benefits in excess of statutory limitations (collectively with the U. S. Qualified Plan, the “Domestic Plans”); a domestic contributory defined contribution plan; international pension plans, which vary by country, consisting of both defined benefit and defined contribution pension plans; deferred compensation arrangements; and certain other postretirement benefit plans. The amounts needed to fund future payouts under our defined benefit pension and post-retirement benefit plans are subject to numerous assumptions and variables. Certain significant variables require us to make assumptions that are within our control such as an anticipated discount rate, expected rate of return on plan assets and future compensation levels. We evaluate these assumptions with our actuarial advisors and select assumptions that we believe reflect the economics underlying our pension and post-retirement obligations. While we believe these assumptions are within accepted industry ranges, an increase or decrease in the assumptions or economic events outside our control could have a direct impact on reported net earnings. The discount rate for each plan used for determining future net periodic benefit cost is based on a review of highly rated long-term bonds. For fiscal 2013, we used a discount rate for our Domestic Plans of 3.90% and varying rates on our international plans of between 1.00% and 7.00%. The discount rate for our Domestic Plans is based on a bond portfolio that includes only long-term bonds with an Aa rating, or equivalent, from a major rating agency. As of June 30, 2013, we used an above-mean yield curve, rather than the broad-based yield curve we used before, because we believe it represents a better estimate of an effective settlement rate of the obligation, and the timing and amount of cash flows related to the bonds included in this portfolio are expected to match the estimated defined benefit payment streams of our Domestic Plans. The benefit obligation of our Domestic Plans would have been higher by approximately $34 million at June 30, 2013 had we not used the above-mean yield curve. For our international plans, the discount rate in a particular country was principally determined based on a yield curve constructed from high quality corporate bonds in each country, with the resulting portfolio having a duration matching that particular plan. For fiscal 2013, we used an expected return on plan assets of 7.50% for our U. S. Qualified Plan and varying rates of between 2.25% and 7.00% for our international plans. In determining the long-term rate of return for a plan, we consider the historical rates of return, the nature of the plan’s investments and an expectation for the plan’s investment strategies. See “Note 12 — Pension, Deferred Compensation and Post-retirement Benefit Plans” of Notes to Consolidated Financial Statements for details regarding the nature of our pension and post-retirement plan investments. The difference between actual and expected return on plan assets is reported as a component of accumulated other comprehensive income. Those gains/losses that are subject to amortization over future periods will be recognized as a component of the net periodic benefit cost in such future periods. For fiscal 2013, our pension plans had actual return on assets of approximately $74 million as compared with expected return on assets of approximately $64 million. The resulting net deferred gain of approximately $10 million, when combined with gains and losses from previous years, will be amortized over periods ranging from approximately 7 to 22 years. The actual return on plan assets from our international pension plans exceeded expectations, primarily reflecting a strong performance from fixed income and equity investments. The lower than expected return on assets from our U. S. Qualified Plan was primarily due to weakness in our fixed income investments, partially offset by our strong equity returns. A 25 basis-point change in the discount rate or the expected rate of return on plan assets would have had the following effect on fiscal 2013 pension expense:
<table><tr><td>(In millions)</td><td>25 Basis-Point Increase</td><td>25 Basis-Point Decrease</td></tr><tr><td>Discount rate</td><td>$-3.5</td><td>$3.9</td></tr><tr><td>Expected return on assets</td><td>$-2.5</td><td>$2.7</td></tr></table>
Our post-retirement plans are comprised of health care plans that could be impacted by health care cost trend rates, which may have a significant effect on the amounts The following table is derived from the Ten Year GAAP Loss Development Table above and summarizes the effect of reserve re-estimates, net of reinsurance, on calendar year operations by accident year for the same ten year period ended December 31, 2013. Each column represents the amount of net reserve re-estimates made in the indicated calendar year and shows the accident years to which the re-estimates are applicable. The amounts in the total accident year column on the far right represent the cumulative reserve re-estimates for the indicated accident years. Since the Company has operations in many countries, part of the Company’s loss and LAE reserves are in foreign currencies and translated to U. S. dollars for each reporting period. Fluctuations in the exchange rates for the currencies, period over period, affect the U. S. dollar amount of outstanding reserves. The translation adjustment line at the bottom of the table eliminates the impact of the exchange fluctuations from the reserve re-estimates.
<table><tr><td>(Dollars in millions)</td><td>2004</td><td>2005</td><td>2006</td><td>2007</td><td>2008</td><td>2009</td><td>2010</td><td>2011</td><td>2012</td><td>2013</td><td>Cumulative Re-estimates for Each Accident Year</td></tr><tr><td>Accident Years</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>2003 and prior</td><td>$-312.0</td><td>$63.4</td><td>$-247.5</td><td>$-418.6</td><td>$-20.3</td><td>$-133.5</td><td>$-102.2</td><td>$-7.4</td><td>$-3.1</td><td>$-39.1</td><td>$-1,220.0</td></tr><tr><td>2004</td><td></td><td>69.9</td><td>140.7</td><td>99.2</td><td>83.5</td><td>-32.1</td><td>18.1</td><td>-3.2</td><td>-12.3</td><td>-12.5</td><td>351.1</td></tr><tr><td>2005</td><td></td><td></td><td>-137.6</td><td>130.1</td><td>56.3</td><td>-28.6</td><td>38.2</td><td>-12.1</td><td>17.4</td><td>-27.8</td><td>35.8</td></tr><tr><td>2006</td><td></td><td></td><td></td><td>-88.4</td><td>50.9</td><td>-18.3</td><td>42.8</td><td>-3.0</td><td>25.7</td><td>11.9</td><td>21.5</td></tr><tr><td>2007</td><td></td><td></td><td></td><td></td><td>41.5</td><td>17.6</td><td>43.6</td><td>-5.7</td><td>-1.8</td><td>22.3</td><td>117.6</td></tr><tr><td>2008</td><td></td><td></td><td></td><td></td><td></td><td>-52.5</td><td>38.6</td><td>-12.4</td><td>-7.7</td><td>37.0</td><td>3.0</td></tr><tr><td>2009</td><td></td><td></td><td></td><td></td><td></td><td></td><td>7.4</td><td>-0.8</td><td>-18.5</td><td>34.4</td><td>22.6</td></tr><tr><td>2010</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>47.1</td><td>-8.9</td><td>-32.1</td><td>6.1</td></tr><tr><td>2011</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-10.2</td><td>19.6</td><td>9.3</td></tr><tr><td>2012</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>26.9</td><td>26.9</td></tr><tr><td>Total calendar year effect</td><td>$-312.0</td><td>$133.3</td><td>$-244.4</td><td>$-277.8</td><td>$211.8</td><td>$-247.2</td><td>$86.5</td><td>$2.5</td><td>$-19.4</td><td>$40.5</td><td></td></tr><tr><td>Canada-1</td><td>-16.3</td><td>-6.6</td><td>-0.5</td><td>-49.6</td><td>63.7</td><td>-39.4</td><td>-21.2</td><td>9.7</td><td>-9.9</td><td>26.4</td><td></td></tr><tr><td>Translation adjustment</td><td>78.9</td><td>-100.3</td><td>109.3</td><td>120.9</td><td>-310.4</td><td>157.8</td><td>-34.5</td><td>-15.9</td><td>32.9</td><td>-48.6</td><td></td></tr><tr><td>Re-estimate of net reserve after translation adjustment</td><td>$-249.4</td><td>$26.4</td><td>$-135.6</td><td>$-206.5</td><td>$-34.9</td><td>$-128.8</td><td>$30.9</td><td>$-3.7</td><td>$3.7</td><td>$18.2</td><td></td></tr><tr><td colspan="4">-1 This adjustment converts Canadian dollars to U.S. dollars.</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="4">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
The reserve development by accident year reflected in the above table was generally the result of the same factors described above that caused the deficiencies shown in the Ten Year GAAP Loss Development Table. The unfavorable development experienced in the 2003 and prior accident years relate principally to the previously discussed asbestos development. Other business areas contributing to adverse development were casualty reinsurance, including professional liability classes, and workers’ compensation insurance, where, in retrospect, the Company’s initial estimates of losses were underestimated principally as the result of unanticipated variability in the underlying exposures. The favorable development for accident year 2004 relates primarily to favorable experience with respect to property reinsurance business. In addition, casualty reinsurance has reflected favorable development for accident years 2004 to 2006. The Company’s loss reserving methodologies continuously monitor the emergence of loss and loss development trends, seeking, on a timely basis, to both adjust reserves for the impact of trend shifts and to factor the impact of such shifts into the Company’s underwriting and pricing on a prospective basis. |
75,037.5 | What's the average of Employee separations of Liability as of December 31, 2005, and Investing activities of Year Ended December 31, 2006 ? | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 3.00% Convertible Notes—During the years ended December 31, 2008 and 2007, the Company issued an aggregate of approximately 8.9 million and 973 shares of Common Stock, respectively, upon conversion of $182.8 million and $0.02 million principal amount, respectively, of 3.00% Notes. Pursuant to the terms of the indenture, holders of the 3.00% Notes are entitled to receive 48.7805 shares of Common Stock for every $1,000 principal amount of notes converted. In connection with the conversions in 2008, the Company paid such holders an aggregate of approximately $4.7 million, calculated based on the discounted value of the future interest payments on the notes, which is reflected in loss on retirement of long-term obligations in the accompanying consolidated statement of operations for the year ended December 31, 2008.14. IMPAIRMENTS, NET LOSS ON SALE OF LONG-LIVED ASSETS, RESTRUCTURING AND MERGER RELATED EXPENSE The significant components reflected in impairments, net loss on sale of long-lived assets, restructuring and merger related expense in the accompanying consolidated statements of operations include the following: Impairments and Net Loss on Sale of Long-Lived Assets—During the years ended December 31, 2008, 2007 and 2006, the Company recorded impairments and net loss on sale of long-lived assets (primarily related to its rental and management segment) of $11.2 million, $9.2 million and $2.6 million, respectively. During the years ended December 31, 2008, 2007 and 2006 respectively, the Company recorded net losses associated with the sales of certain non-core towers and other assets, as well as impairment charges to write-down certain assets to net realizable value after an indicator of impairment had been identified. As a result, the Company recorded net losses and impairments of approximately $10.5 million, $7.1 million and $2.0 million for the years ended December 31, 2008, 2007 and 2006, respectively. The net loss for the year ended December 31, 2008 is comprised of net losses from asset sales and other impairments of $10.7 million, offset by gains from asset sales of $0.2 million. The net loss for the year ended December 31, 2007 is comprised of net losses from asset sales and other impairments of $7.8 million, offset by gains from asset sales of $0.7 million. Merger Related Expense—During the year ended December 31, 2005, the Company assumed certain obligations, as a result of the merger with SpectraSite, Inc. , primarily related to employee separation costs of former SpectraSite employees. Severance payments made to former SpectraSite, Inc. employees were subject to plans and agreements established by SpectraSite, Inc. and assumed by the Company in connection with the merger. These costs were recognized as an assumed liability in the purchase price allocation. In addition, the Company also incurred certain merger related costs for additional employee retention and separation costs incurred during the year ended December 31, 2006. The following table displays the activity with respect to this accrued liability for the years ended December 31, 2008, 2007 and 2006 (in thousands):
<table><tr><td></td><td>Liability as of December 31, 2005</td><td>2006 Expense</td><td>2006 Cash Payments</td><td>Other</td><td>Liability as of December 31, 2006</td><td>2007 Expense</td><td>2007 Cash Payments</td><td>Other</td><td>Liability as of December 31, 2007</td><td>2008 Expense</td><td>2008 Cash Payments</td><td>Other</td><td>Liability as of December 31, 2008</td></tr><tr><td>Employee separations</td><td>$20,963</td><td>$496</td><td>$-12,389</td><td>$-1,743</td><td>$7,327</td><td>$633</td><td>$-6,110</td><td>$-304</td><td>$1,546</td><td>$284</td><td>$-1,901</td><td>$71</td><td>—</td></tr></table>
As of December 31, 2008, the Company had paid all of these merger related liabilities. The loss from discontinued operations for the year ended December 31, 2007 is primarily due to the settlement of the Verestar bankruptcy proceedings and related litigation and the related tax effects. In November 2007, following approval by the bankruptcy court, the Verestar settlement agreement became effective, we paid the $32.0 million settlement amount and the litigation was dismissed. In connection with the approval of the settlement agreement by the bankruptcy court and the dismissal of the bankruptcy proceedings and related litigation, we determined that the benefits from certain of Verestar’s net operating losses would more likely than not be recoverable by us. We had not previously recorded these tax benefits related to net operating losses generated from the operations of Verestar and used by us because our ability to realize such benefits was potentially impacted by the bankruptcy proceedings and related litigation that had yet to be resolved. Accordingly, in November 2007, we recorded $5.6 million of additional tax benefits related to Verestar. We also recorded a tax provision of $10.7 million in loss from discontinued operations, net during the three months ended December 31, 2007 to write off deferred tax assets associated with Verestar that should have been written off in 2002 and removed from the consolidated balance sheet when Verestar was deconsolidated upon its bankruptcy filing in December 2003. Liquidity and Capital Resources Overview As a holding company, our cash flows are derived primarily from the operations of and distributions from our operating subsidiaries or funds raised through borrowings under our credit facilities and debt and equity offerings. As of December 31, 2008, we had approximately $638.2 million of total liquidity, comprised of approximately $143.1 million in cash and cash equivalents and the ability to borrow approximately $495.1 million under our Revolving Credit Facility. As of December 31, 2008, our cash and cash equivalents increased by $110.0 million as compared to December 31, 2007. Summary cash flow information for the years ended December 31, 2008, 2007 and 2006 is set forth below.
<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Net cash provided by (used for):</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>$773,258</td><td>$692,679</td><td>$620,738</td></tr><tr><td>Investing activities</td><td>-274,940</td><td>-186,180</td><td>-129,112</td></tr><tr><td>Financing activities</td><td>-388,172</td><td>-754,640</td><td>-323,063</td></tr><tr><td>Net effect of changes in exchange rates on cash and cash equivalents</td><td>-192</td><td>—</td><td>—</td></tr><tr><td>Increase (decrease) in cash and cash equivalents</td><td>$109,954</td><td>$-248,141</td><td>$168,563</td></tr></table>
We use our cash flows to fund our operations and investments in our business, including tower maintenance and improvements, tower construction and DAS network installations, and tower and land acquisitions. During the years ended December 31, 2008 and 2007, we also used a significant amount of our cash flows to fund refinancing and repurchases of our outstanding indebtedness, as well as our stock repurchase programs. By refinancing and repurchasing a portion of our outstanding indebtedness, we improved our financial position, which increased our financial flexibility and our ability to return value to our stockholders. Our significant transactions in 2008 included the following: ? We entered into a new $325.0 million Term Loan pursuant to our Revolving Credit Facility and used the net proceeds, together with available cash, to repay $325.0 million of existing indebtedness under the Revolving Credit Facility. ? We reduced the amount of indebtedness outstanding under our convertible notes through conversions of approximately $201.1 million face amount of convertible notes into shares of our Common Stock. ITEM 6. SELECTED FINANCIAL DATA You should read the selected financial data in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited consolidated financial statements and the related notes to those consolidated financial statements included in this Annual Report. In accordance with accounting principles generally accepted in the United States (“GAAP”), the consolidated statements of operations for all periods presented in this “Selected Financial Data” have been adjusted to reflect certain businesses as discontinued operations (see note 1 to our consolidated financial statements included in this Annual Report). Year-over-year comparisons are significantly affected by our acquisitions, dispositions and, to a lesser extent, construction of towers.
<table><tr><td></td><td colspan="5">Year Ended December 31,</td></tr><tr><td></td><td>2010</td><td>2009</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td></td><td colspan="5">(In thousands, except per share data)</td></tr><tr><td> Statements of Operations Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>$1,936,373</td><td>$1,668,420</td><td>$1,547,035</td><td>$1,425,975</td><td>$1,294,068</td></tr><tr><td>Network development services</td><td>48,962</td><td>55,694</td><td>46,469</td><td>30,619</td><td>23,317</td></tr><tr><td>Total operating revenues</td><td>1,985,335</td><td>1,724,114</td><td>1,593,504</td><td>1,456,594</td><td>1,317,385</td></tr><tr><td>Operating expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost of operations (exclusive of items shown separately below)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>447,629</td><td>383,990</td><td>363,024</td><td>343,450</td><td>332,246</td></tr><tr><td>Network development services</td><td>26,957</td><td>32,385</td><td>26,831</td><td>16,172</td><td>11,291</td></tr><tr><td>Depreciation, amortization and accretion-1</td><td>460,726</td><td>414,619</td><td>405,332</td><td>522,928</td><td>528,051</td></tr><tr><td>Selling, general, administrative and development expense</td><td>229,769</td><td>201,694</td><td>180,374</td><td>186,483</td><td>159,324</td></tr><tr><td>Other operating expenses</td><td>35,876</td><td>19,168</td><td>11,189</td><td>9,198</td><td>2,572</td></tr><tr><td>Total operating expenses</td><td>1,200,957</td><td>1,051,856</td><td>986,750</td><td>1,078,231</td><td>1,033,484</td></tr><tr><td>Operating income</td><td>784,378</td><td>672,258</td><td>606,754</td><td>378,363</td><td>283,901</td></tr><tr><td>Interest income, TV Azteca, net</td><td>14,212</td><td>14,210</td><td>14,253</td><td>14,207</td><td>14,208</td></tr><tr><td>Interest income</td><td>5,024</td><td>1,722</td><td>3,413</td><td>10,848</td><td>9,002</td></tr><tr><td>Interest expense</td><td>-246,018</td><td>-249,803</td><td>-253,584</td><td>-235,824</td><td>-215,643</td></tr><tr><td>Loss on retirement of long-term obligations</td><td>-1,886</td><td>-18,194</td><td>-4,904</td><td>-35,429</td><td>-27,223</td></tr><tr><td>Other income</td><td>315</td><td>1,294</td><td>5,988</td><td>20,675</td><td>6,619</td></tr><tr><td>Income before income taxes and income on equity method investments</td><td>556,025</td><td>421,487</td><td>371,920</td><td>152,840</td><td>70,864</td></tr><tr><td>Income tax provision</td><td>-182,489</td><td>-182,565</td><td>-135,509</td><td>-59,809</td><td>-41,768</td></tr><tr><td>Income on equity method investments</td><td>40</td><td>26</td><td>22</td><td>19</td><td>26</td></tr><tr><td>Income from continuing operations</td><td>373,576</td><td>238,948</td><td>236,433</td><td>93,050</td><td>29,122</td></tr><tr><td>Income (loss) from discontinued operations</td><td>30</td><td>8,179</td><td>110,982</td><td>-36,396</td><td>-854</td></tr><tr><td>Net income</td><td>373,606</td><td>247,127</td><td>347,415</td><td>56,654</td><td>28,268</td></tr><tr><td>Net income attributable to noncontrolling interest</td><td>-670</td><td>-532</td><td>-169</td><td>-338</td><td>-784</td></tr><tr><td>Net income attributable to American Tower Corporation</td><td>$372,936</td><td>$246,595</td><td>$347,246</td><td>$56,316</td><td>$27,484</td></tr><tr><td>Basic income per common share from continuing operations attributable to American Tower Corporation-2</td><td>$0.93</td><td>$0.60</td><td>$0.60</td><td>$0.22</td><td>$0.06</td></tr><tr><td>Diluted income per common share from continuing operations attributable to American Tower Corporation-2</td><td>$0.92</td><td>$0.59</td><td>$0.58</td><td>$0.22</td><td>$0.06</td></tr><tr><td>Weight average common shares outstanding-2</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>401,152</td><td>398,375</td><td>395,947</td><td>413,167</td><td>424,525</td></tr><tr><td>Diluted</td><td>404,072</td><td>406,948</td><td>418,357</td><td>426,079</td><td>436,217</td></tr><tr><td> Other Operating Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ratio of earnings to fixed charges-3</td><td>2.65x</td><td>2.27x</td><td>2.12x</td><td>1.50x</td><td>1.25x</td></tr></table> |
711.7 | What is the total value of Operating income, Other investment income/(losses), Equity in earnings of unconsolidated affiliates and Interest and dividend income for before consolidation ? (in million) | Item 2: Properties Information concerning Applied’s properties is set forth below:
<table><tr><td>(Square feet in thousands)</td><td>United States</td><td>Other Countries</td><td>Total</td></tr><tr><td>Owned</td><td>4,530</td><td>2,417</td><td>6,947</td></tr><tr><td>Leased</td><td>1,037</td><td>1,341</td><td>2,378</td></tr><tr><td>Total</td><td>5,567</td><td>3,758</td><td>9,325</td></tr></table>
Because of the interrelation of Applied’s operations, properties within a country may be shared by the segments operating within that country. The Company’s headquarters offices are in Santa Clara, California. Products in Semiconductor Systems are manufactured in Santa Clara, California; Austin, Texas; Gloucester, Massachusetts; Kalispell, Montana; Rehovot, Israel; and Singapore. Remanufactured equipment products in the Applied Global Services segment are produced primarily in Austin, Texas. Products in the Display and Adjacent Markets segment are manufactured in Alzenau, Germany and Tainan, Taiwan. Other products are manufactured in Treviso, Italy. Applied also owns and leases offices, plants and warehouse locations in many locations throughout the world, including in Europe, Japan, North America (principally the United States), Israel, China, India, Korea, Southeast Asia and Taiwan. These facilities are principally used for manufacturing; research, development and engineering; and marketing, sales and customer support. Applied also owns a total of approximately 269 acres of buildable land in Montana, Texas, California, Israel and Italy that could accommodate additional building space. Applied considers the properties that it owns or leases as adequate to meet its current and future requirements. Applied regularly assesses the size, capability and location of its global infrastructure and periodically makes adjustments based on these assessments. Cash flows for the years ended December 31, 2009, 2008 and 2007 are summarized as follows:
<table><tr><td> $ in millions</td><td> 2009</td><td> 2008</td><td> 2007</td></tr><tr><td>Net cash (used in)/provided by:</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>362.7</td><td>525.5</td><td>915.5</td></tr><tr><td>Investing activities</td><td>-102.4</td><td>-98.4</td><td>-48.2</td></tr><tr><td>Financing activities</td><td>-100.7</td><td>-666.4</td><td>-740.8</td></tr><tr><td>Increase/(decrease) in cash and cash equivalents</td><td>159.6</td><td>-239.3</td><td>126.5</td></tr><tr><td>Foreign exchange</td><td>17.2</td><td>-91.3</td><td>10.4</td></tr><tr><td>Cash and cash equivalents, beginning of period</td><td>585.2</td><td>915.8</td><td>778.9</td></tr><tr><td>Cash and cash equivalents, end of period</td><td>762.0</td><td>585.2</td><td>915.8</td></tr></table>
Operating Activities Net cash provided by operating activities is generated by the receipt of investment management and other fees generated from AUM, offset by operating expenses and changes in operating assets and liabilities. Although some receipts and payments are seasonal, particularly bonus payments, in general our operating cash flows move in the same direction as our operating income. The reduced operating income for the year ended December 31, 2009, when compared to the prior year is a significant factor in the reduced operating cash flows. Cash provided by operating activities in 2009 was $362.7 million, a decrease of $162.8 million or 31% over 2008. Changes in operating assets and liabilities used $118.3 million of cash, while the combined cash generated from other operating items was $481.0 million. The change in operating assets and liabilities was driven by the funding of annual bonuses combined with the lower levels of accrued bonus awards at the end of 2009, together with higher trade receivables at the end of 2009, compared to the end of 2008. The change in operating assets and liabilities also includes a decrease of $45.0 million in the cash held by consolidated investment products. Cash provided by operating activities in 2008 was $525.5 million, a decrease of $390.0 million or 42.6% from 2007. Changes in operating assets and liabilities contributed $273.9 million of the decrease, and lower net income, after adjusting for the gains and losses of consolidated investment products, contributed a further $193.2 million of the decrease in cash flows generated from operating activities. Investing Activities The launch of a number of new products during mid and late 2009 resulted in a net cash outflow into seed and partnership investments of $43.5 million during the year. During year ended December 31, 2009, we recaptured $60.6 million in cash from redemption of prior investments, including seed and partnership investments, and invested $104.1 million in new products. During the fiscal years ended December 31, 2009, 2008 and 2007, our capital expenditures were $39.5 million, $84.1 million and $36.7 million, respectively. Expenditures related principally in each year to technology initiatives, including new platforms from which we maintain our portfolio management systems and fund accounting systems, improvements in computer hardware and software desktop products for employees, new telecommunications products to enhance our internal information flow, and back-up disaster recovery systems. Also, in each year, a portion of these costs related to leasehold improvements made to the various buildings and workspaces used in our offices. These projects have been funded with proceeds from our operating cash flows. Capital expenditures in 2008 also included expenditures related to leasehold improvements in the new headquarters space. During the fiscal years ended December 31, 2009, 2008 and 2007, our capital divestitures were not significant relative to our total fixed assets. Investing activities include the investment purchases and sales of our consolidated investment products. In total, these contributed $8.0 million, $175.6 million and $8.1 million to cash generated in investing activities during the years ended December 31, 2009, 2008, and 2007, respectively. Net cash outflows of $34.2 million in 2009 related to acquisition earn-out payments related to the 2006 acquisition of WL Ross & Co. In 2008, net cash outflows of $130.9 million and $43.4 million related to acquisition earn-out payments for the PowerShares and WL Ross & Co. acquisitions, respectively. Results of Operations for the Year Ended December 31, 2010, compared with the Year Ended December 31, 2009 Condensed Consolidating Statements of Income
<table><tr><td>$ in millions</td><td>Before Consolidation<sup>-1</sup></td><td>Consolidated Investment Products<sup>-2</sup></td><td>Adjustments<sup>-1(3)</sup></td><td>Total</td></tr><tr><td>Year ended December 31, 2010</td><td></td><td></td><td></td><td></td></tr><tr><td>Total operating revenues</td><td>3,532.7</td><td>0.3</td><td>-45.3</td><td>3,487.7</td></tr><tr><td>Total operating expenses</td><td>2,887.8</td><td>55.3</td><td>-45.3</td><td>2,897.8</td></tr><tr><td>Operating income</td><td>644.9</td><td>-55.0</td><td>—</td><td>589.9</td></tr><tr><td>Equity in earnings of unconsolidated affiliates</td><td>40.8</td><td>—</td><td>-0.6</td><td>40.2</td></tr><tr><td>Interest and dividend income</td><td>10.4</td><td>246.0</td><td>-5.1</td><td>251.3</td></tr><tr><td>Other investment income/(losses)</td><td>15.6</td><td>107.6</td><td>6.4</td><td>129.6</td></tr><tr><td>Interest expense</td><td>-58.6</td><td>-123.7</td><td>5.1</td><td>-177.2</td></tr><tr><td>Income before income taxes</td><td>653.1</td><td>174.9</td><td>5.8</td><td>833.8</td></tr><tr><td>Income tax provision</td><td>-197.0</td><td>—</td><td>—</td><td>-197.0</td></tr><tr><td>Net income</td><td>456.1</td><td>174.9</td><td>5.8</td><td>636.8</td></tr><tr><td>(Gains)/losses attributable to noncontrolling interests in consolidated entities, net</td><td>-0.2</td><td>-170.8</td><td>-0.1</td><td>-171.1</td></tr><tr><td>Net income attributable to common shareholders</td><td>455.9</td><td>4.1</td><td>5.7</td><td>465.7</td></tr></table>
Consolidated
<table><tr><td>$ in millions</td><td>Before Consolidation</td><td>Consolidated Investment Products<sup>-2</sup></td><td>Adjustments<sup>-3</sup></td><td>Total</td></tr><tr><td>Year ended December 31, 2009</td><td></td><td></td><td></td><td></td></tr><tr><td>Total operating revenues</td><td>2,633.3</td><td>1.9</td><td>-7.9</td><td>2,627.3</td></tr><tr><td>Total operating expenses</td><td>-2,139.5</td><td>-11.4</td><td>7.9</td><td>-2,143.0</td></tr><tr><td>Operating income</td><td>493.8</td><td>-9.5</td><td>—</td><td>484.3</td></tr><tr><td>Equity in earnings of unconsolidated affiliates</td><td>24.5</td><td>—</td><td>2.5</td><td>27.0</td></tr><tr><td>Interest and dividend income</td><td>9.8</td><td>—</td><td>—</td><td>9.8</td></tr><tr><td>Other investment income/(losses)</td><td>7.8</td><td>-106.9</td><td>—</td><td>-99.1</td></tr><tr><td>Interest expense</td><td>-64.5</td><td>—</td><td>—</td><td>-64.5</td></tr><tr><td>Income before income taxes</td><td>471.4</td><td>-116.4</td><td>2.5</td><td>357.5</td></tr><tr><td>Income tax provision</td><td>-148.2</td><td>—</td><td>—</td><td>-148.2</td></tr><tr><td>Net income</td><td>323.2</td><td>-116.4</td><td>2.5</td><td>209.3</td></tr><tr><td>(Gains)/losses attributable to noncontrolling interests in consolidated entities, net</td><td>-0.7</td><td>113.9</td><td>—</td><td>113.2</td></tr><tr><td>Net income attributable to common shareholders</td><td>322.5</td><td>-2.5</td><td>2.5</td><td>322.5</td></tr></table>
(1) The Before Consolidation column includes Invesco's equity interests in the investment products accounted for as equity method (private equity and real estate partnership funds) and available-for-sale investments (CLOs). Upon consolidation of the CLOs, the company's and the CLOs' accounting policies are effectively aligned, resulting in the reclassification of the company's gain for the year ended December 31, 2010 of $6.4 million (representing the increase in the market value of the company's holding in the consolidated CLOs) from other comprehensive income into other gains/losses. The company's gain on its investment in the CLOs (before consolidation) eliminates with the company's share of the offsetting loss on the CLOs' debt. The net income arising from consolidation of CLOs is therefore completely attributed to other investors in these CLOs, as the company's share has been eliminated through consolidation. The Before Consolidation column does not include any other adjustments related to non-GAAP financial measure presentation. (2) The company adopted guidance now encompassed in ASC Topic 810 on January 1, 2010 resulting in the consolidation of certain CLOs. In accordance with the standard, prior periods have not been restated to reflect the consolidation of these CLOs. Prior to January 1, 2010, the company was not deemed to be the primary beneficiary of these CLOs. (3) Adjustments include the elimination of intercompany transactions between the company and its consolidated investment products, primarily the elimination of management fees expensed by the funds and recorded as operating revenues (before consolidation) by the company. |
0.12857 | What is the percentage of Consumer in relation to the total in 2008 ? (in %) | NOTE 19 SHAREHOLDERS’ EQUITY Preferred Stock Information related to preferred stock is as follows:
<table><tr><td></td><td></td><td colspan="2">Preferred Shares</td></tr><tr><td>December 31Shares in thousands</td><td>Liquidationvalue per share</td><td> 2008</td><td>2007</td></tr><tr><td>Authorized</td><td></td><td></td><td></td></tr><tr><td>$1 par value</td><td></td><td> 16,960</td><td>16,985</td></tr><tr><td>Issued and outstanding</td><td></td><td></td><td></td></tr><tr><td>Series A</td><td>$40</td><td> 6</td><td>7</td></tr><tr><td>Series B</td><td>40</td><td> 1</td><td>1</td></tr><tr><td>Series C</td><td>20</td><td> 119</td><td>128</td></tr><tr><td>Series D</td><td>20</td><td> 171</td><td>186</td></tr><tr><td>Series K</td><td>10,000</td><td> 50</td><td></td></tr><tr><td>Series L</td><td>100,000</td><td> 2</td><td></td></tr><tr><td>Series N</td><td>100,000</td><td> 76</td><td></td></tr><tr><td>Total issued and outstanding</td><td></td><td> 425</td><td>322</td></tr></table>
On December 31, 2008, we issued $7.6 billion of Fixed Rate Cumulative Perpetual Preferred Stock, Series N, to the US Treasury under the US Treasury’s Troubled Asset Relief Program (“TARP”) Capital Purchase Program, together with a warrant to purchase shares of common stock of PNC described below. Series N dividends are payable on the 15th of February, May, August and November beginning February 15, 2009. Dividends will be paid at a rate of 5.00% through February 15, 2014 and 9.00% thereafter. This preferred stock is redeemable at par plus accrued and unpaid dividends subject to the approval of our primary banking regulators. Under the TARP Capital Purchase Program, there are restrictions on common and preferred dividends and common share repurchases associated with the preferred stock issued to the US Treasury. As is typical with cumulative preferred stock, dividend payments for this preferred stock must be current before dividends can be paid on junior shares, including our common stock, or junior shares can be repurchased or redeemed. Also, the US Treasury’s consent is required for any increase in common dividends per share above the most recent level prior to October 14, 2008 until the third anniversary of the preferred stock issuance as long as the US Treasury continues to hold any of the preferred stock. Further, during that same period, the US Treasury’s consent is required, unless the preferred stock is no longer held by the US Treasury, for any share repurchases with limited exceptions, most significantly purchases of common shares in connection with any benefit plan in the ordinary course of business consistent with past practice. As part of the National City transaction, we issued 9.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series L in exchange for National City’s Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F. Dividends 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 a replacement capital covenant for the first ten years after issuance and 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. Also as 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 5,751preferred 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 pledged the $500,100,000 principal amount of National City 8.729% Junior Subordinated Notes due 2043 held by the Trust and their proceeds to secure this purchase obligation. If Series M shares are issued prior to December 10, 2012, any dividends on such shares will be calculated at a rate per annum equal to 12.000% until December 10, 2012, and thereafter, at a rate per annum that will be reset quarterly and will equal three-month LIBOR for the related dividend period plus 8.610%. Dividends will be payable if and when declared by the Board at the dividend rate so indicated applied to the liquidation preference per share of the Series M Preferred Stock. The Series M is redeemable at PNC’s option, subject to a replacement capital covenant for the first ten years after issuance and subject to Federal Reserve approval, if then applicable, on or after December 10, 2012 at a redemption price per share equal to the liquidation preference plus any declared but unpaid dividends. As a result of the National City transaction, we assumed National City’s obligations under replacement capital covenants with respect to (i) the Normal APEX Securities and our Series M shares and (ii) National City’s 6,000,000 of Depositary Shares (each representing 1/4000th of an interest in a share of our 9.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series L), whereby we agreed not to cause the redemption or repurchase of the Normal APEX or Depositary Shares, as applicable, or the underlying Preferred Stock and/or junior subordinated notes, as applicable, unless such repurchases or redemptions are made from the proceeds of the issuance of certain qualified securities and pursuant to the other terms and conditions set amount of unrecognized tax benefit related to permanent differences because a portion of those unrecognized benefits relate to state tax matters. It is reasonably possible that the liability for uncertain tax positions could increase or decrease in the next twelve months due to completion of tax authorities’ exams or the expiration of statutes of limitations. Management estimates that the liability for uncertain tax positions could decrease by $5 million within the next twelve months. The consolidated federal income tax returns of The PNC Financial Services Group, Inc. and subsidiaries through 2003 have been audited by the Internal Revenue Service and we have resolved all disputed matters through the IRS appeals division. The Internal Revenue Service is currently examining the 2004 through 2006 consolidated federal income tax returns of The PNC Financial Services Group, Inc. and subsidiaries. The consolidated federal income tax returns of National City Corporation and subsidiaries through 2004 have been audited by the Internal Revenue Service and we have reached agreement in principle on resolution of all disputed matters through the IRS appeals division. However, because the agreement is still subject to execution of a closing agreement we have not treated it as effectively settled. The Internal Revenue Service is currently examining the 2005 through 2007 consolidated federal income tax returns of National City Corporation and subsidiaries, and we expect the 2008 federal income tax return to begin being audited as soon as it is filed. New York, New Jersey, Maryland and New York City are principally where we were subject to state and local income tax prior to our acquisition of National City. The state of New York is currently in the process of closing the 2002 to 2004 audit and will begin auditing the years 2005 and 2006. New York City is currently auditing 2004 and 2005. However, years 2002 and 2003 remain subject to examination by New York City pending completion of the New York state audit. Through 2006, BlackRock is included in our New York and New York City combined tax filings and constituted most of the tax liability. Years subsequent to 2004 remain subject to examination by New Jersey and years subsequent to 2005 remain subject to examination by Maryland. National City was principally subject to state and local income tax in California, Florida, Illinois, Indiana, and Missouri. Audits currently in process for these states include: California (2003-2004), Illinois (2004-2006) and Missouri (2003-2005). We will now also be principally subject to tax in those states. In the ordinary course of business we are routinely subject to audit by the taxing authorities of these states and at any given time a number of audits will be in process. Our policy is to classify interest and penalties associated with income taxes as income taxes. At January 1, 2008, we had accrued $91 million of interest related to tax positions, most of which related to our cross-border leasing transactions. The total accrued interest and penalties at December 31, 2008 was $164 million. While the leasing related interest decreased with a payment to the IRS, the $73 million net increase primarily resulted from our acquisition of National City. NOTE 22 SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK As required by SEC Regulation S-X, summarized consolidated financial information of BlackRock follows (in millions).
<table><tr><td>December 31</td><td>2008</td><td>2007</td></tr><tr><td>Total assets</td><td>$19,924</td><td>$22,561</td></tr><tr><td>Total liabilities</td><td>$7,367</td><td>$10,387</td></tr><tr><td>Non-controlling interest</td><td>491</td><td>578</td></tr><tr><td>Stockholders’ equity</td><td>12,066</td><td>11,596</td></tr><tr><td>Total liabilities, non-controlling interest and stockholders’ equity</td><td>$19,924</td><td>$22,561</td></tr><tr><td>Year ended December 31</td><td>2008</td><td>2007</td></tr><tr><td>Total revenue</td><td>$5,064</td><td>$4,845</td></tr><tr><td>Total expenses</td><td>3,471</td><td>3,551</td></tr><tr><td>Operating income</td><td>1,593</td><td>1,294</td></tr><tr><td>Non-operating income (expense)</td><td>-574</td><td>529</td></tr><tr><td>Income before income taxes and non-controlling interest</td><td>1,019</td><td>1,823</td></tr><tr><td>Income taxes</td><td>388</td><td>464</td></tr><tr><td>Non-controlling interest</td><td>-155</td><td>364</td></tr><tr><td>Net income</td><td>$786</td><td>$995</td></tr></table>
NOTE 23 REGULATORY MATTERS We are subject to the regulations of certain federal and state agencies and undergo periodic examinations by such regulatory authorities. The access to and cost of funding new business initiatives including acquisitions, the ability to pay dividends, the level of deposit insurance costs, and the level and nature of regulatory oversight depend, in large part, on a financial institution’s capital strength. The minimum US regulatory capital ratios are 4% for tier 1 risk-based, 8% for total riskbased and 4% for leverage. However, regulators may require higher capital levels when particular circumstances warrant. To qualify as “well capitalized,” regulators require banks to maintain capital ratios of at least 6% for tier 1 risk-based, 10% for total risk-based and 5% for leverage. At December 31, 2008 and December 31, 2007, each of our domestic bank subsidiaries met the “well capitalized” capital ratio requirements. We recorded such loans at estimated fair value and considered them to be performing, even if contractually past due (or if we do not expect to receive payment in full based on the original contractual terms), since certain purchase accounting adjustments will be accreted to interest income over time. The accretion will represent the discount associated with the difference between the expected cash flows and estimated fair value of the loans. This accounting treatment resulted in the return to performing status of $3.2 billion of loans previously classified as nonperforming by National City. The purchase accounting adjustments were estimated as of December 31, 2008 and such estimates may be refined during the first quarter of 2009. At December 31, 2008, our largest nonperforming asset was approximately $36 million and our average nonperforming loan associated with commercial lending was less than $1 million. The amount of nonperforming loans that was current as to principal and interest was $555 million at December 31, 2008 and $178 million at December 31, 2007. Accruing Loans Past Due 90 Days Or More- Summary
<table><tr><td></td><td colspan="2"> Amount</td><td colspan="2"> Percent of Total Outstandings</td></tr><tr><td>Dollars in millions</td><td> Dec. 31 2008 (a)</td><td>Dec. 312007</td><td>Dec. 31 2008 (a)</td><td>Dec. 312007</td></tr><tr><td>Commercial</td><td>$97</td><td>$14</td><td>.14%</td><td>.05%</td></tr><tr><td>Commercial real estate</td><td>723</td><td>18</td><td>2.81</td><td>.20</td></tr><tr><td>Equipment lease financing</td><td>2</td><td></td><td>.03</td><td></td></tr><tr><td>Consumer</td><td>419</td><td>49</td><td>.80</td><td>.27</td></tr><tr><td>Residential real estate</td><td>2,011</td><td>43</td><td>9.32</td><td>.45</td></tr><tr><td>Other</td><td>7</td><td>12</td><td>.37</td><td>2.91</td></tr><tr><td>Total</td><td>$3,259</td><td>$136</td><td>1.86%</td><td>.20%</td></tr></table>
(a) Amounts include the impact of National City. Loans that are not included in nonperforming or past due categories but cause us to be uncertain about the borrower’s ability to comply with existing repayment terms over the next six months totaled $745 million at December 31, 2008, compared with $134 million at December 31, 2007. Allowances For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit We maintain an allowance for loan and lease losses to absorb losses from the loan portfolio. We determine the allowance based on quarterly assessments of the probable estimated losses inherent in the loan portfolio. While we make allocations to specific loans and pools of loans, the total reserve is available for all loan and lease losses. In addition to the allowance for loan and lease losses, we maintain an allowance for unfunded loan commitments and letters of credit. We report this allowance as a liability on our Consolidated Balance Sheet. We determine this amount using estimates of the probability of the ultimate funding and losses related to those credit exposures. This methodology is similar to the one we use for determining the adequacy of our allowance for loan and lease losses. We refer you to Note 5 Asset Quality in the Notes To Consolidated Financial Statements in Item 8 of this Report regarding changes in the allowance for loan and lease losses and in the allowance for unfunded loan commitments and letters of credit. Also see the Allocation Of Allowance For Loan And Lease Losses table in the Statistical Information (Unaudited) section of Item 8 of this Report for additional information included herein by reference. We establish specific allowances for loans considered impaired using a method prescribed by SFAS 114, “Accounting by Creditors for Impairment of a Loan. ” All impaired loans except leases and large groups of smallerbalance homogeneous loans which may include but are not limited to credit card, residential mortgage, and consumer installment loans are subject to SFAS 114 analysis. Specific allowances for individual loans over a set dollar threshold are determined by our Special Asset Committee based on an analysis of the present value of expected future cash flows from the loans discounted at their effective interest rate, observable market price, or the fair value of the underlying collateral. We establish specific allowance on all other impaired loans based on the loss given default credit risk rating. Allocations to non-impaired commercial and commercial real estate loans (pool reserve allocations) are assigned to pools of loans as defined by our business structure and are based on internal probability of default and loss given default credit risk ratings. Key elements of the pool reserve methodology include: ? Probability of default (“PD”), which is primarily based on historical default analyses and is derived from the borrower’s internal PD credit risk rating; ? Exposure at default (“EAD”), which is derived from historical default data; and ? Loss given default (“LGD”), which is based on historical loss data, collateral value and other structural factors that may affect our ultimate ability to collect on the loan and is derived from the loan’s internal LGD credit risk rating. Our pool reserve methodology is sensitive to changes in key risk parameters such as PDs, LGDs and EADs. In general, a given change in any of the major risk parameters will have a corresponding change in the pool reserve allocations for non-impaired commercial loans. Our commercial loans are the largest category of credits and are most sensitive to changes in the key risk parameters and pool reserve loss rates. To illustrate, if we increase the pool reserve loss rates by 5% for all categories of non-impaired commercial loans, then the |
7,720 | What's the sum of Repurchases from securitization trusts of Residential Mortgage Agency 2015, and U.S. credit card Loans and leases charged off of 2013 ? | Table VII Allowance for Credit Losses
<table><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Allowance for loan and lease losses, January 1</td><td>$12,234</td><td>$14,419</td><td>$17,428</td><td>$24,179</td><td>$33,783</td></tr><tr><td>Loans and leases charged off</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>-403</td><td>-866</td><td>-855</td><td>-1,508</td><td>-3,276</td></tr><tr><td>Home equity</td><td>-752</td><td>-975</td><td>-1,364</td><td>-2,258</td><td>-4,573</td></tr><tr><td>U.S. credit card</td><td>-2,691</td><td>-2,738</td><td>-3,068</td><td>-4,004</td><td>-5,360</td></tr><tr><td>Non-U.S. credit card</td><td>-238</td><td>-275</td><td>-357</td><td>-508</td><td>-835</td></tr><tr><td>Direct/Indirect consumer</td><td>-392</td><td>-383</td><td>-456</td><td>-710</td><td>-1,258</td></tr><tr><td>Other consumer</td><td>-232</td><td>-224</td><td>-268</td><td>-273</td><td>-274</td></tr><tr><td>Total consumer charge-offs</td><td>-4,708</td><td>-5,461</td><td>-6,368</td><td>-9,261</td><td>-15,576</td></tr><tr><td>U.S. commercial<sup>-1</sup></td><td>-567</td><td>-536</td><td>-584</td><td>-774</td><td>-1,309</td></tr><tr><td>Commercial real estate</td><td>-10</td><td>-30</td><td>-29</td><td>-251</td><td>-719</td></tr><tr><td>Commercial lease financing</td><td>-30</td><td>-19</td><td>-10</td><td>-4</td><td>-32</td></tr><tr><td>Non-U.S. commercial</td><td>-133</td><td>-59</td><td>-35</td><td>-79</td><td>-36</td></tr><tr><td>Total commercial charge-offs</td><td>-740</td><td>-644</td><td>-658</td><td>-1,108</td><td>-2,096</td></tr><tr><td>Total loans and leases charged off</td><td>-5,448</td><td>-6,105</td><td>-7,026</td><td>-10,369</td><td>-17,672</td></tr><tr><td>Recoveries of loans and leases previously charged off</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>272</td><td>393</td><td>969</td><td>424</td><td>165</td></tr><tr><td>Home equity</td><td>347</td><td>339</td><td>457</td><td>455</td><td>331</td></tr><tr><td>U.S. credit card</td><td>422</td><td>424</td><td>430</td><td>628</td><td>728</td></tr><tr><td>Non-U.S. credit card</td><td>63</td><td>87</td><td>115</td><td>109</td><td>254</td></tr><tr><td>Direct/Indirect consumer</td><td>258</td><td>271</td><td>287</td><td>365</td><td>495</td></tr><tr><td>Other consumer</td><td>27</td><td>31</td><td>39</td><td>39</td><td>42</td></tr><tr><td>Total consumer recoveries</td><td>1,389</td><td>1,545</td><td>2,297</td><td>2,020</td><td>2,015</td></tr><tr><td>U.S. commercial<sup>-2</sup></td><td>175</td><td>172</td><td>214</td><td>287</td><td>368</td></tr><tr><td>Commercial real estate</td><td>41</td><td>35</td><td>112</td><td>102</td><td>335</td></tr><tr><td>Commercial lease financing</td><td>9</td><td>10</td><td>19</td><td>29</td><td>38</td></tr><tr><td>Non-U.S. commercial</td><td>13</td><td>5</td><td>1</td><td>34</td><td>8</td></tr><tr><td>Total commercial recoveries</td><td>238</td><td>222</td><td>346</td><td>452</td><td>749</td></tr><tr><td>Total recoveries of loans and leases previously charged off</td><td>1,627</td><td>1,767</td><td>2,643</td><td>2,472</td><td>2,764</td></tr><tr><td>Net charge-offs</td><td>-3,821</td><td>-4,338</td><td>-4,383</td><td>-7,897</td><td>-14,908</td></tr><tr><td>Write-offs of PCI loans</td><td>-340</td><td>-808</td><td>-810</td><td>-2,336</td><td>-2,820</td></tr><tr><td>Provision for loan and lease losses</td><td>3,581</td><td>3,043</td><td>2,231</td><td>3,574</td><td>8,310</td></tr><tr><td>Other<sup>-3</sup></td><td>-174</td><td>-82</td><td>-47</td><td>-92</td><td>-186</td></tr><tr><td>Allowance for loan and lease losses, December 31</td><td>11,480</td><td>12,234</td><td>14,419</td><td>17,428</td><td>24,179</td></tr><tr><td>Less: Allowance included in assets of business held for sale<sup>-4</sup></td><td>-243</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total allowance for loan and lease losses, December 31</td><td>11,237</td><td>12,234</td><td>14,419</td><td>17,428</td><td>24,179</td></tr><tr><td>Reserve for unfunded lending commitments, January 1</td><td>646</td><td>528</td><td>484</td><td>513</td><td>714</td></tr><tr><td>Provision for unfunded lending commitments</td><td>16</td><td>118</td><td>44</td><td>-18</td><td>-141</td></tr><tr><td>Other<sup>-3</sup></td><td>100</td><td>—</td><td>—</td><td>-11</td><td>-60</td></tr><tr><td>Reserve for unfunded lending commitments, December 31</td><td>762</td><td>646</td><td>528</td><td>484</td><td>513</td></tr><tr><td>Allowance for credit losses, December 31</td><td>$11,999</td><td>$12,880</td><td>$14,947</td><td>$17,912</td><td>$24,692</td></tr></table>
(1) Includes U. S. small business commercial charge-offs of $253 million, $282 million, $345 million, $457 million and $799 million in 2016, 2015, 2014, 2013 and 2012, respectively. (2) Includes U. S. small business commercial recoveries of $45 million, $57 million, $63 million, $98 million and $100 million in 2016, 2015, 2014, 2013 and 2012, respectively. (3) Primarily represents the net impact of portfolio sales, consolidations and deconsolidations, foreign currency translation adjustments and certain other reclassifications. (4) Represents allowance for loan and lease losses related to the non-U. S. credit card loan portfolio, which is included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016. Valuation Adjustments on Derivatives The Corporation records credit risk valuation adjustments on derivatives in order to properly reflect the credit quality of the counterparties and its own credit quality. The Corporation calculates valuation adjustments on derivatives based on a modeled expected exposure that incorporates current market risk factors. The exposure also takes into consideration credit mitigants such as enforceable master netting agreements and collateral. CDS spread data is used to estimate the default probabilities and severities that are applied to the exposures. Where no observable credit default data is available for counterparties, the Corporation uses proxies and other market data to estimate default probabilities and severity. Valuation adjustments on derivatives are affected by changes in market spreads, non-credit related market factors such as interest rate and currency changes that affect the expected exposure, and other factors like changes in collateral arrangements and partial payments. Credit spreads and non-credit factors can move independently. For example, for an interest rate swap, changes in interest rates may increase the expected exposure, which would increase the counterparty credit valuation adjustment (CVA). Independently, counterparty credit spreads may tighten, which would result in an offsetting decrease to CVA. The Corporation early adopted, retrospective to January 1, 2015, the provision of new accounting guidance issued in January 2016 that requires the Corporation to record unrealized DVA resulting from changes in the Corporation’s own credit spreads on liabilities accounted for under the fair value option in accumulated OCI. This new accounting guidance had no impact on the accounting for DVA on derivatives. For additional information, see New Accounting Pronouncements in Note 1 – Summary of Significant Accounting Principles. The Corporation enters into risk management activities to offset market driven exposures. The Corporation often hedges the counterparty spread risk in CVA with CDS. The Corporation hedges other market risks in both CVA and DVA primarily with currency and interest rate swaps. In certain instances, the net-of-hedge amounts in the table below move in the same direction as the gross amount or may move in the opposite direction. This movement is a consequence of the complex interaction of the risks being hedged resulting in limitations in the ability to perfectly hedge all of the market exposures at all times. The table below presents CVA, DVA and FVA gains (losses) on derivatives, which are recorded in trading account profits, on a gross and net of hedge basis for 2016, 2015 and 2014. CVA gains reduce the cumulative CVA thereby increasing the derivative assets balance. DVA gains increase the cumulative DVA thereby decreasing the derivative liabilities balance. CVA and DVA losses have the opposite impact. FVA gains related to derivative assets reduce the cumulative FVA thereby increasing the derivative assets balance. FVA gains related to derivative liabilities increase the cumulative FVA thereby decreasing the derivative liabilities balance.
<table><tr><td></td><td colspan="2">2016</td><td colspan="2">2015</td><td colspan="2">2014</td></tr><tr><td>(Dollars in millions)</td><td>Gross</td><td>Net</td><td>Gross</td><td>Net</td><td>Gross</td><td>Net</td></tr><tr><td>Derivative assets (CVA)<sup>(1)</sup></td><td>$374</td><td>$214</td><td>$255</td><td>$227</td><td>$-22</td><td>$191</td></tr><tr><td>Derivative assets/liabilities (FVA)<sup>(1)</sup></td><td>186</td><td>102</td><td>16</td><td>16</td><td>-497</td><td>-497</td></tr><tr><td>Derivative liabilities (DVA)<sup>(1)</sup></td><td>24</td><td>-141</td><td>-18</td><td>-153</td><td>-28</td><td>-150</td></tr></table>
(1) At December 31, 2016, 2015 and 2014, cumulative CVA reduced the derivative assets balance by $1.0 billion, $1.4 billion and $1.6 billion, cumulative FVA reduced the net derivatives balance by $296 million, $481 million and $497 million, and cumulative DVA reduced the derivative liabilities balance by $774 million, $750 million and $769 million, respectively NOTE 6 Securitizations and Other Variable Interest Entities The Corporation utilizes VIEs in the ordinary course of business to support its own and its customers’ financing and investing needs. The Corporation routinely securitizes loans and debt securities using VIEs as a source of funding for the Corporation and as a means of transferring the economic risk of the loans or debt securities to third parties. The assets are transferred into a trust or other securitization vehicle such that the assets are legally isolated from the creditors of the Corporation and are not available to satisfy its obligations. These assets can only be used to settle obligations of the trust or other securitization vehicle. The Corporation also administers, structures or invests in other VIEs including CDOs, investment vehicles and other entities. For more information on the Corporation’s utilization of VIEs, see Note 1 – Summary of Significant Accounting Principles. The tables in this Note present the assets and liabilities of consolidated and unconsolidated VIEs at December 31, 2016 and 2015, in situations where the Corporation has continuing involvement with transferred assets or if the Corporation otherwise has a variable interest in the VIE. The tables also present the Corporation’s maximum loss exposure at December 31, 2016 and 2015, resulting from its involvement with consolidated VIEs and unconsolidated VIEs in which the Corporation holds a variable interest. The Corporation’s maximum loss exposure is based on the unlikely event that all of the assets in the VIEs become worthless and incorporates not only potential losses associated with assets recorded on the Consolidated Balance Sheet but also potential losses associated with off-balance sheet commitments, such as unfunded liquidity commitments and other contractual arrangements. The Corporation’s maximum loss exposure does not include losses previously recognized through write-downs of assets. As a result of new accounting guidance, which was effective on January 1, 2016, the Corporation identified certain limited partnerships and similar entities that are now considered to be VIEs and are included in the unconsolidated VIE tables in this Note at December 31, 2016. The Corporation had a maximum loss exposure of $6.1 billion related to these VIEs, which had total assets of $16.7 billion. The Corporation invests in ABS issued by third-party VIEs with which it has no other form of involvement and enters into certain commercial lending arrangements that may also incorporate the use of VIEs to hold collateral. These securities and loans are included in Note 3 – Securities or Note 4 – Outstanding Loans and Leases. In addition, the Corporation uses VIEs such as trust preferred securities trusts in connection with its funding activities. For additional information, see Note 11 – Long-term Debt. The Corporation uses VIEs, such as common trust funds managed within Global Wealth & Investment Management (GWIM), to provide investment opportunities for clients. These VIEs, which are generally not consolidated by the Corporation, as applicable, are not included in the tables in this Note. Except as described below, the Corporation did not provide financial support to consolidated or unconsolidated VIEs during 2016 or 2015 that it was not previously contractually required to provide, nor does it intend to do so. First-lien Mortgage Securitizations First-lien Mortgages As part of its mortgage banking activities, the Corporation securitizes a portion of the first-lien residential mortgage loans it originates or purchases from third parties, generally in the form of RMBS guaranteed by government-sponsored enterprises, FNMA and FHLMC (collectively the GSEs), or Government National Mortgage Association (GNMA) primarily in the case of FHA-insured and U. S. Department of Veterans Affairs (VA)-guaranteed mortgage loans. Securitization usually occurs in conjunction with or shortly after origination or purchase, and the Corporation may also securitize loans held in its residential mortgage portfolio. In addition, the Corporation may, from time to time, securitize commercial mortgages it originates or purchases from other entities. The Corporation typically services the loans it securitizes. Further, the Corporation may retain beneficial interests in the securitization trusts including senior and subordinate securities and equity tranches issued by the trusts. Except as described below and in Note 7 – Representations and Warranties Obligations and Corporate Guarantees, the Corporation does not provide guarantees or recourse to the securitization trusts other than standard representations and warranties. The table below summarizes select information related to firstlien mortgage securitizations for 2016, 2015 and 2014.
<table><tr><td></td><td colspan="6">Residential Mortgage</td><td colspan="2"></td><td></td></tr><tr><td></td><td colspan="3">Agency</td><td colspan="3">Non-agency - Subprime</td><td colspan="3">Commercial Mortgage</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td><td>2016</td><td>2015</td><td>2014</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Cash proceeds from new securitizations<sup>-1</sup></td><td>$24,201</td><td>$27,164</td><td>$36,905</td><td>$—</td><td>$—</td><td>$809</td><td>$3,887</td><td>$7,945</td><td>$5,710</td></tr><tr><td>Gain on securitizations<sup>-2</sup></td><td>370</td><td>894</td><td>371</td><td>—</td><td>—</td><td>49</td><td>38</td><td>49</td><td>68</td></tr><tr><td>Repurchases from securitization trusts<sup>-3</sup></td><td>3,611</td><td>3,716</td><td>5,155</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr></table>
(1) The Corporation transfers residential mortgage loans to securitizations sponsored by the GSEs or GNMA in the normal course of business and receives RMBS in exchange which may then be sold into the market to third-party investors for cash proceeds. (2) A majority of the first-lien residential and commercial mortgage loans securitized are initially classified as LHFS and accounted for under the fair value option. Gains recognized on these LHFS prior to securitization, which totaled $487 million, $750 million and $715 million net of hedges, during 2016, 2015 and 2014, respectively are not included in the table above. (3) The Corporation may have the option to repurchase delinquent loans out of securitization trusts, which reduces the amount of servicing advances it is required to make. The Corporation may also repurchase loans from securitization trusts to perform modifications. The majority of repurchased loans are FHA-insured mortgages collateralizing GNMA securities. In addition to cash proceeds as reported in the table above, the Corporation received securities with an initial fair value of $4.2 billion, $22.3 billion and $5.4 billion in connection with first-lien mortgage securitizations in 2016, 2015 and 2014. The receipt of these securities represents non-cash operating and investing activities and, accordingly, is not reflected on the Consolidated Statement of Cash Flows. All of these securities were initially classified as Level 2 assets within the fair value hierarchy. During 2016, 2015 and 2014 there were no changes to the initial classification. The Corporation recognizes consumer MSRs from the sale or securitization of first-lien mortgage loans. Servicing fee and ancillary fee income on consumer mortgage loans serviced, including securitizations where the Corporation has continuing The following table shows the major categories of ongoing claims for which the Company has been able to estimate its probable liability and for which the Company has taken reserves and the related insurance receivables: |
34.228 | what was the average share price that the shares were repurchased in 2011? | ANALOG DEVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The total intrinsic value of options exercised (i. e. the difference between the market price at exercise and the price paid by the employee to exercise the options) during fiscal 2011, 2010 and 2009 was $96.5 million, $29.6 million and $4.7 million, respectively. The total amount of proceeds received by the Company from exercise of these options during fiscal 2011, 2010 and 2009 was $217.4 million, $240.4 million and $15.1 million, respectively. Proceeds from stock option exercises pursuant to employee stock plans in the Company’s statement of cash flows of $217.2 million, $216.1 million and $12.4 million for fiscal 2011, 2010 and 2009, respectively, are net of the value of shares surrendered by employees in certain limited circumstances to satisfy the exercise price of options, and to satisfy employee tax obligations upon vesting of restricted stock or restricted stock units and in connection with the exercise of stock options granted to the Company’s employees under the Company’s equity compensation plans. The withholding amount is based on the Company’s minimum statutory withholding requirement. A summary of the Company’s restricted stock unit award activity as of October 29, 2011 and changes during the year then ended is presented below:
<table><tr><td></td><td>Restricted Stock Units Outstanding</td><td>Weighted- Average Grant- Date Fair Value Per Share</td></tr><tr><td>Restricted stock units outstanding at October 30, 2010</td><td>1,265</td><td>$28.21</td></tr><tr><td>Units granted</td><td>898</td><td>$34.93</td></tr><tr><td>Restrictions lapsed</td><td>-33</td><td>$24.28</td></tr><tr><td>Units forfeited</td><td>-42</td><td>$31.39</td></tr><tr><td>Restricted stock units outstanding at October 29, 2011</td><td>2,088</td><td>$31.10</td></tr></table>
As of October 29, 2011, there was $88.6 million of total unrecognized compensation cost related to unvested share-based awards comprised of stock options and restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.3 years. The total grant-date fair value of shares that vested during fiscal 2011, 2010 and 2009 was approximately $49.6 million, $67.7 million and $74.4 million, respectively. Common Stock Repurchase Program The Company’s common stock repurchase program has been in place since August 2004. In the aggregate, the Board of Directors has authorized the Company to repurchase $5 billion of the Company’s common stock under the program. Under the program, the Company may repurchase outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the Company has repurchased all shares authorized under the program. As of October 29, 2011, the Company had repurchased a total of approximately 125.0 million shares of its common stock for approximately $4,278.5 million under this program. An additional $721.5 million remains available for repurchase of shares under the current authorized program. The repurchased shares are held as authorized but unissued shares of common stock. Any future common stock repurchases will be dependent upon several factors, including the amount of cash available to the Company in the United States and the Company’s financial performance, outlook and liquidity. The Company also from time to time repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units, or in certain limited circumstances to satisfy the exercise price of options granted to the Company’s employees under the Company’s equity compensation plans. CITIZENS FINANCIAL GROUP, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS
<table><tr><td></td><td colspan="8">As of</td></tr><tr><td>(dollars in millions)</td><td>December 31,2016</td><td>September 30,2016</td><td>June 30,2016</td><td>March 31,2016</td><td>December 31,2015</td><td>September 30,2015</td><td>June 30,2015</td><td>March 31,2015</td></tr><tr><td>Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$149,520</td><td>$147,015</td><td>$145,183</td><td>$140,077</td><td>$138,208</td><td>$135,447</td><td>$137,251</td><td>$136,535</td></tr><tr><td>Loans and leases<sup>-18</sup></td><td>107,669</td><td>105,467</td><td>103,551</td><td>100,991</td><td>99,042</td><td>97,431</td><td>96,538</td><td>94,494</td></tr><tr><td>Allowance for loan and lease losses</td><td>1,236</td><td>1,240</td><td>1,246</td><td>1,224</td><td>1,216</td><td>1,201</td><td>1,201</td><td>1,202</td></tr><tr><td>Total securities</td><td>25,610</td><td>25,704</td><td>24,398</td><td>24,057</td><td>24,075</td><td>24,354</td><td>25,134</td><td>25,121</td></tr><tr><td>Goodwill</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td></tr><tr><td>Total liabilities</td><td>129,773</td><td>126,834</td><td>124,957</td><td>120,112</td><td>118,562</td><td>115,847</td><td>117,665</td><td>116,971</td></tr><tr><td>Deposits</td><td>109,804</td><td>108,327</td><td>106,257</td><td>102,606</td><td>102,539</td><td>101,866</td><td>100,615</td><td>98,990</td></tr><tr><td>Federal funds purchased and securities sold under agreements to repurchase</td><td>1,148</td><td>900</td><td>717</td><td>714</td><td>802</td><td>1,293</td><td>3,784</td><td>4,421</td></tr><tr><td>Other short-term borrowed funds</td><td>3,211</td><td>2,512</td><td>2,770</td><td>3,300</td><td>2,630</td><td>5,861</td><td>6,762</td><td>7,004</td></tr><tr><td>Long-term borrowed funds</td><td>12,790</td><td>11,902</td><td>11,810</td><td>10,035</td><td>9,886</td><td>4,153</td><td>3,890</td><td>3,904</td></tr><tr><td>Total stockholders’ equity</td><td>19,747</td><td>20,181</td><td>20,226</td><td>19,965</td><td>19,646</td><td>19,600</td><td>19,586</td><td>19,564</td></tr><tr><td>Other Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Asset Quality Ratios:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Allowance for loan and lease losses as a percentage of total loans and leases</td><td>1.15%</td><td>1.18%</td><td>1.20%</td><td>1.21%</td><td>1.23%</td><td>1.23%</td><td>1.24%</td><td>1.27%</td></tr><tr><td>Allowance for loan and lease losses as a percentage of nonperforming loans and leases</td><td>118</td><td>112</td><td>119</td><td>113</td><td>115</td><td>116</td><td>114</td><td>106</td></tr><tr><td>Nonperforming loans and leases as a percentage of total loans and leases</td><td>0.97</td><td>1.05</td><td>1.01</td><td>1.07</td><td>1.07</td><td>1.06</td><td>1.09</td><td>1.20</td></tr><tr><td>Capital ratios:<sup>-19</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>CET1 capital ratio<sup>-20</sup></td><td>11.2</td><td>11.3</td><td>11.5</td><td>11.6</td><td>11.7</td><td>11.8</td><td>11.8</td><td>12.2</td></tr><tr><td>Tier 1 capital ratio<sup>-21</sup></td><td>11.4</td><td>11.5</td><td>11.7</td><td>11.9</td><td>12.0</td><td>12.0</td><td>12.1</td><td>12.2</td></tr><tr><td>Total capital ratio<sup>-22</sup></td><td>14.0</td><td>14.2</td><td>14.9</td><td>15.1</td><td>15.3</td><td>15.4</td><td>15.3</td><td>15.5</td></tr><tr><td>Tier 1 leverage ratio<sup>-23</sup></td><td>9.9</td><td>10.1</td><td>10.3</td><td>10.4</td><td>10.5</td><td>10.4</td><td>10.4</td><td>10.5</td></tr></table>
(1) Third quarter 2016 noninterest income included $67 million of pre-tax notable items consisting of a $72 million gain on mortgage/home equity TDR transaction, partially offset by $5 million related to asset finance repositioning. (2) Third quarter 2016 noninterest expense included $36 million of pre-tax notable items consisting of $17 million of TOP III efficiency initiatives, $11 million related to asset finance repositioning and $8 million of home equity operational items. (3) Third quarter 2016 net income included $19 million of after-tax notable items consisting of a $45 million gain on mortgage/home equity TDR transaction, partially offset by $11 million of TOP III efficiency initiatives, $10 million related to asset finance repositioning and $5 million of home equity operational items. (4) Third quarter 2016 net income per average common share, basic and diluted, included $0.04 related to notable items consisting of $0.09 attributable to the gain on mortgage/home equity TDR transaction, partially offset by a $0.02 impact from TOP III efficiency initiatives, $0.02 impact related to asset finance repositioning and a $0.01 impact from home equity operational items. (5) Second quarter 2015 noninterest expense included $40 million of pre-tax restructuring charges and special items consisting of $25 million of restructuring charges, $1 million of CCAR and regulatory expenses and $14 million related to separation and rebranding. (6) Second quarter 2015 net income included $25 million of after-tax restructuring charges and special items consisting of $15 million of restructuring charges, $1 million of CCAR and regulatory expenses and $9 million related to separation and rebranding. (7) Second quarter 2015 net income per average common share, basic and diluted, included $0.05 attributed to restructuring and special items. (8) First quarter 2015 noninterest expense included $10 million of pre-tax restructuring charges and special items consisting of $1 million of restructuring charges, $1 million of CCAR and regulatory expenses and $8 million related to separation and rebranding. (9) First quarter 2015 net income included $6 million of after-tax restructuring charges and special items consisting of $1 million of restructuring charges and $5 million related to separation and rebranding. (10) First quarter 2015 net income per average common share, basic and diluted, included $0.01 attributed to restructuring and special items. (11) “Return on average common equity” is defined as net income available to common stockholders divided by average common equity. Average common equity represents average total stockholders’ equity less average preferred stock. (12) “Return on average tangible common equity” is defined as net income (loss) available to common stockholders divided by average common equity excluding average goodwill (net of related deferred tax liability) and average other intangibles. Average common equity represents average total stockholders’ equity less average preferred stock. (13) “Return on average total assets” is defined as net income (loss) divided by average total assets. (14) “Return on average total tangible assets” is defined as net income (loss) divided by average total assets excluding average goodwill (net of related deferred tax liability) and average other intangibles. (15) “Efficiency ratio is defined as the ratio of our total noninterest expense to the sum of net interest income and total noninterest income. (16) “Net interest margin” is defined as net interest income divided by average total interest-earning assets. (17) Ratios for the periods above are presented on an annualized basis. (18) Excludes loans held for sale of $625 million, $526 million, $850 million, $751 million, $365 million, $420 million, $697 million, and $376 million as of December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. (19) Basel III transitional rules for institutions applying the Standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III Standardized transitional approach. (20) “Common equity tier 1 capital ratio” represents CET1 capital divided by total risk-weighted assets as defined under Basel III Standardized approach. (21) “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach. (22) “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach. (23) “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach. In Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, “we,” “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries. The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). In particular, the financial results for the year ended 2013 include the results of FCX Oil & Gas Inc. (FM O&G) only since June 1, 2013. References to “Notes” are Notes included in our Notes to Consolidated Financial Statements. Throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, all references to earnings or losses per share are on a diluted basis, unless otherwise noted. OVERVIEW In 2013, we completed the acquisitions of Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR). Refer to Note 2 for further discussion of these acquisitions, including a summary of the preliminary purchase price allocations. With these acquisitions, we are a premier United States-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and natural gas resources, and a growing production profile. We are the world’s largest publicly traded copper producer. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits, significant mining operations in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa and significant oil and natural gas assets in North America, including reserves in the Deepwater Gulf of Mexico (GOM), onshore and offshore California, in the Eagle Ford shale play in Texas, in the Haynesville shale play in Louisiana, in the Madden area in central Wyoming, and an industry-leading position in the emerging shallow-water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana (previously referred to as the ultra-deep gas trend). We have significant mineral reserves, resources and future development opportunities within our portfolio of mining assets. At December 31, 2013, our estimated consolidated recoverable proven and probable mineral reserves totaled 111.2 billion pounds of copper, 31.3 million ounces of gold and 3.26 billion pounds of molybdenum, which were determined using long-term average prices of $2.00 per pound for copper, $1,000 per ounce for gold and $10 per pound for molybdenum. Refer to “Critical Accounting Estimates — Mineral Reserves” for further discussion. A summary of the sources of our consolidated copper, gold and molybdenum production for the year 2013 by geographic location follows:
<table><tr><td></td><td>Copper</td><td>Gold</td><td>Molybdenum</td><td></td></tr><tr><td>North America</td><td>35%</td><td>1%</td><td>86%</td><td><sup>a</sup></td></tr><tr><td>South America</td><td>32%</td><td>8%</td><td>14%</td><td></td></tr><tr><td>Indonesia</td><td>22%</td><td>91%</td><td>—</td><td></td></tr><tr><td>Africa</td><td>11%</td><td>—</td><td>—</td><td></td></tr><tr><td></td><td>100%</td><td>100%</td><td>100%</td><td></td></tr></table>
a. For 2013, 60 percent of our consolidated molybdenum production in North America was from the Henderson and Climax primary molybdenum mines. Copper production from the Grasberg, Morenci and Cerro Verde mines totaled 49 percent of our consolidated copper production in 2013. During 2013, we completed our second phase expansion project at Tenke. We also advanced construction on the Morenci mill expansion, with startup expected in the first half of 2014, and commenced construction on the Cerro Verde mill expansion, with completion expected in 2016. These projects are expected to significantly increase our minerals production in future periods. Refer to “Operations” for further discussion of our mining operations. Our oil and gas business has significant proved, probable and possible reserves with financially attractive organic growth opportunities. Our estimated proved oil and natural gas reserves at December 31, 2013, totaled 464 million barrels of oil equivalents (MMBOE), with 80 percent comprised of oil (including natural gas liquids, or NGLs). Our portfolio includes a broad range of development opportunities and high-potential exploration prospects. For the seven-month period following the acquisition date, our oil and gas sales volumes totaled 38.1 MMBOE, including 26.6 million barrels (MMBbls) of crude oil, 54.2 billion cubic feet (Bcf) of natural gas and 2.4 MMBbls of NGLs. Refer to “Operations” for further discussion of our oil and gas operations and to “Critical Accounting Estimates — Oil and Natural Gas Reserves” for further discussion of our reserves. Our results for 2013, compared with 2012, primarily benefited from higher copper and gold sales volumes, partly offset by lower metals price realizations, and include the results of FM O&G beginning June 1, 2013. Refer to “Consolidated Results” for discussion of items impacting our consolidated results for the three years ended December 31, 2013. At December 31, 2013, we had $2.0 billion in consolidated cash and cash equivalents and $20.7 billion in total debt, including $10.5 billion of acquisition-related debt and $6.7 billion of debt assumed in connection with the oil and gas acquisitions. Refer to Note 8 and “Capital Resources and Liquidity” for further discussion. At current copper and crude oil prices, we expect to produce significant operating cash flows, and to use our cash to invest in our development projects, reduce debt and return cash to shareholders through dividends on our common stock. |
626.66667 | What's the average of the Fuel for Amount in the years where Wheelabrator is positive? | (3) Refer to Note 2 “Summary of Significant Accounting Principles and Practices ” for further information.13. Employee Benefits p y Defined Contribution Savings Plans Aon maintains defined contribution savings plans for the benefit of its employees. The expense recognized for these plans is included in Compensation and benefits in the Consolidated Statements of Income. The expense for the significant plans in the U. S. , U. K. , Netherlands and Canada is as follows (in millions):
<table><tr><td>Years ended December 31</td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>U.S.</td><td>$98</td><td>$105</td><td>$121</td></tr><tr><td>U.K.</td><td>45</td><td>43</td><td>43</td></tr><tr><td>Netherlands and Canada</td><td>25</td><td>25</td><td>27</td></tr><tr><td>Total</td><td>$168</td><td>$173</td><td>$191</td></tr></table>
Pension and Other Postretirement Benefits The Company sponsors defined benefit pension and postretirement health and welfare plans that provide retirement, medical, and life insurance benefits. The postretirement health care plans are contributory, with retiree contributions adjusted annually, aand the life insurance and pension plans are generally noncontributory. The significant U. S. , U. K. , Netherlands and Canadian pension plans are closed to new entrants. The following table summarizes the major components of our operating expenses, including the impact of foreign currency translation, for the years ended December 31 (dollars in millions):
<table><tr><td></td><td> 2013</td><td colspan="2">Period-to-Period Change</td><td> 2012</td><td colspan="2">Period-to-Period Change</td><td> 2011</td></tr><tr><td>Labor and related benefits</td><td>$2,506</td><td>$99</td><td>4.1%</td><td>$2,407</td><td>$71</td><td>3.0%</td><td>$2,336</td></tr><tr><td>Transfer and disposal costs</td><td>973</td><td>9</td><td>0.9</td><td>964</td><td>27</td><td>2.9</td><td>937</td></tr><tr><td>Maintenance and repairs</td><td>1,181</td><td>24</td><td>2.1</td><td>1,157</td><td>67</td><td>6.1</td><td>1,090</td></tr><tr><td>Subcontractor costs</td><td>1,182</td><td>-8</td><td>-0.7</td><td>1,190</td><td>242</td><td>25.5</td><td>948</td></tr><tr><td>Cost of goods sold</td><td>1,000</td><td>81</td><td>8.8</td><td>919</td><td>-152</td><td>-14.2</td><td>1,071</td></tr><tr><td>Fuel</td><td>603</td><td>-46</td><td>-7.1</td><td>649</td><td>21</td><td>3.3</td><td>628</td></tr><tr><td>Disposal and franchise fees and taxes</td><td>653</td><td>23</td><td>3.7</td><td>630</td><td>28</td><td>4.7</td><td>602</td></tr><tr><td>Landfill operating costs</td><td>232</td><td>8</td><td>3.6</td><td>224</td><td>-31</td><td>-12.2</td><td>255</td></tr><tr><td>Risk management</td><td>244</td><td>14</td><td>6.1</td><td>230</td><td>8</td><td>3.6</td><td>222</td></tr><tr><td>Other</td><td>538</td><td>29</td><td>5.7</td><td>509</td><td>57</td><td>12.6</td><td>452</td></tr><tr><td></td><td>$9,112</td><td>$233</td><td>2.6%</td><td>$8,879</td><td>$338</td><td>4.0%</td><td>$8,541</td></tr></table>
Significant changes in our operating expenses are discussed below. ‰ Labor and related benefits — Significant items affecting the comparability of expenses for the periods presented include: ‰ Higher wages due to merit increases effective in the second quarter of 2013 and the effect of acquisitions, particularly the Greenstar acquisition in 2013; ‰ Incentive compensation expense fluctuations due to higher anticipated payouts for 2013 as compared to the prior year period and lower payouts for 2012 as compared to 2011; ‰ Increased contract labor in both 2013 and 2012 principally attributed to the recycling line of business; ‰ Headcount, exclusive of acquisitions, decreased in 2013 compared to the prior year period; conversely, headcount increased in 2012 when compared to 2011; and ‰ Non-cash charges incurred during the third quarter of 2013 and the second quarter of 2012 as a result of our partial withdrawals from underfunded multiemployer pension plans. ‰ Maintenance and repairs — The increase in 2013 compared to 2012 was driven by (i) the Greenstar acquisition and (ii) higher internal shop labor costs due in part to higher incentive compensation and merit increases. The increase in 2012 as compared to 2011 is primarily due to (i) increased fleet maintenance costs, which include services provided by third-parties, tires, parts and internal shop labor costs and (ii) differences in the timing and scope of planned maintenance projects at our waste-to-energy facilities. ‰ Subcontractor costs — The decrease in 2013 was driven primarily by the volume decline associated with the loss of certain strategic accounts. These decreases were offset, in part, by higher costs associated with the acquired RCI operations. The increase in 2012 was driven in part by (i) the acquisition of Oakleaf in July 2011 and (ii) increased volumes related to Hurricane Sandy. ‰ Cost of goods sold — The increase in cost of goods sold in 2013 is due in large part to higher customer rebates resulting from higher volumes in our recycling commodity business driven primarily by the acquired Greenstar operations. The significantly reduced market prices for recyclable commodities in 2012 drove the majority of the cost decrease when compared to the prior period. ‰ Fuel — The decrease in fuel expense in 2013 compared to 2012 was due to (i) a retroactive CNG fuel excise tax credit recognized in the first quarter of 2013; (ii) reduced fuel purchases due to reduced collection volumes; (iii) lower costs as we convert our fleet to CNG vehicles and (iv) lower diesel fuel prices. The increase in fuel expense in 2012 compared to 2011 was mainly driven by higher diesel fuel prices. Labor and related benefits — Factors affecting the year-over-year changes in our labor and related benefits costs include: ‰ Higher incentive compensation costs of $94 million in 2013 and $73 million in 2011, as compared with 2012, as a result of higher anticipated payouts. ‰ Higher non-cash compensation expense recognized in 2013 as compared to 2012, in part due to the payout of performance share units granted in 2010, which was approved in 2013. Expense associated with these awards had been reversed in 2012 when it no longer appeared probable that threshold performance would be achieved. ‰ Cost savings of $45 million in 2013 driven primarily from our July 2012 restructuring. Professional fees — Consulting fees declined year over year as company-wide initiatives, which began in 2011, were implemented; partially offset by higher legal fees in 2012 as compared with 2013 and 2011. Provision for bad debts — Our provision for bad debts decreased in 2013 as a result of the collection of certain fully reserved receivables related to our Puerto Rico operations. Additionally, many of the billing delay issues we experienced throughout fiscal year 2012 with certain of our strategic account customers have been resolved, favorably affecting our year-over-year bad debt comparisons. Other — In 2013, controllable costs associated with (i) building and equipment; (ii) advertising; (iii) computer and telecommunication; (iv) travel and entertainment and (v) seminars and education have declined primarily as a result of our July 2012 restructuring and continued focus on cost-control initiatives. In 2012, we experienced decreases in (i) litigation settlement costs and (ii) insurance and claims. These decreases were partially offset by increases in (i) computer and telecommunications costs, due in part to improvements we are making to our information technology systems and (ii) building and equipment costs, which include rental and utilities. Depreciation and Amortization Depreciation and amortization includes (i) depreciation of property and equipment, including assets recorded for capital leases, on a straight-line basis from three to 50 years; (ii) amortization of landfill costs, including those incurred and all estimated future costs for landfill development, construction and asset retirement costs arising from closure and post-closure, on a units-of-consumption method as landfill airspace is consumed over the total estimated remaining capacity of a site, which includes both permitted capacity and expansion capacity that meets our Company-specific criteria for amortization purposes; (iii) amortization of landfill asset retirement costs arising from final capping obligations on a units-of-consumption method as airspace is consumed over the estimated capacity associated with each final capping event and (iv) amortization of intangible assets with a definite life, using either a 150% declining balance approach or a straight-line basis over the definitive terms of the related agreements, which are generally from two to 15 years depending on the type of asset. The following table summarizes the components of our depreciation and amortization costs for the years ended December 31 (dollars in millions):
<table><tr><td></td><td> 2013</td><td colspan="2">Period-to- Period Change</td><td> 2012</td><td colspan="2">Period-to- Period Change</td><td> 2011</td></tr><tr><td>Depreciation of tangible property and equipment</td><td>$853</td><td>$20</td><td>2.4%</td><td>$833</td><td>$33</td><td>4.1%</td><td>$800</td></tr><tr><td>Amortization of landfill airspace</td><td>400</td><td>5</td><td>1.3</td><td>395</td><td>17</td><td>4.5</td><td>378</td></tr><tr><td>Amortization of intangible assets</td><td>80</td><td>11</td><td>15.9</td><td>69</td><td>18</td><td>35.3</td><td>51</td></tr><tr><td></td><td>$1,333</td><td>$36</td><td>2.8%</td><td>$1,297</td><td>$68</td><td>5.5%</td><td>$1,229</td></tr></table>
WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) not anticipate that the final resolution of the Central States Pension Plan matter could be material to the Company’s business, financial condition or liquidity; however, such loss could have a material adverse effect on our cash flows and, to a lesser extent, our results of operations, for a particular reporting period. Similarly, we also do not believe that any future withdrawals, individually or in the aggregate, from the multiemployer pension plans to which we contribute, could have a material adverse effect on our business, financial condition or liquidity. However, such withdrawals could have a material adverse effect on our results of operations or cash flows for a particular reporting period, depending on the number of employees withdrawn in any future period and the financial condition of the multiemployer pension plan(s) at the time of such withdrawal(s). Tax Matters — We are currently in the examination phase of IRS audits for the tax years 2013 and 2014 and expect these audits to be completed within the next 15 and 27 months, respectively. We participate in the IRS’s Compliance Assurance Process, which means we work with the IRS throughout the year in order to resolve any material issues prior to the filing of our annual tax return. We are also currently undergoing audits by various state and local jurisdictions for tax years that date back to 2005, with the exception of affirmative claims in one jurisdiction that date back to 2000. We are not currently under audit in Canada and, due to the expiration of statutes of limitations, all tax years prior to 2009 are closed. In July 2011, we acquired Oakleaf, which is subject to potential IRS examinations for the years 2010 and 2011. Pursuant to the terms of our acquisition of Oakleaf, we are entitled to indemnification for Oakleaf’s pre-acquisition period tax liabilities. We maintain a liability for uncertain tax positions, the balance of which management believes is adequate. Results of audit assessments by taxing authorities are not currently expected to have a material adverse impact on our results of operations or cash flows.12. Restructuring The following table summarizes pre-tax restructuring charges, including employee severance and benefit costs and other charges, for the years ended December 31 for the respective periods (in millions):
<table><tr><td></td><td> 2013</td><td> 2012</td><td> 2011</td></tr><tr><td>Solid Waste</td><td>$7</td><td>$19</td><td>$10</td></tr><tr><td>Wheelabrator</td><td>1</td><td>3</td><td>1</td></tr><tr><td>Corporate and Other</td><td>10</td><td>45</td><td>8</td></tr><tr><td></td><td>$18</td><td>$67</td><td>$19</td></tr></table>
During the year ended December 31, 2013, we recognized a total of $18 million of pre-tax restructuring charges, of which $7 million was related to employee severance and benefit costs, including costs associated with our acquisitions of Greenstar and RCI and our 2012 restructurings discussed below. The remaining charges were primarily related to operating lease obligations for property that will no longer be utilized. We do not expect to incur any material charges associated with our past restructuring efforts in future periods.2012 Restructurings — In July 2012, we announced a reorganization of operations, designed to streamline management and staff support and reduce our cost structure, while not disrupting our front-line operations. Principal organizational changes included removing the management layer of our four geographic Groups, each of which previously constituted a reportable segment, and consolidating and reducing the number of our geographic Areas through which we evaluate and oversee our Solid Waste subsidiaries from 22 to 17. This reorganization eliminated approximately 700 employee positions throughout the Company, including positions at both the management and support level. Voluntary separation arrangements were offered to many employees. Additionally, in 2012, we recognized employee severance and benefits restructuring charges associated with the reorganization of Oakleaf discussed below that began in 2011 along with certain other actions taken by the Company in early 2012. |
2,010 | Between 2010 and 2009, which year has the fastest increasing rate of Net interest income? | Supplemental Financial Data We view net interest income and related ratios and analyses (i. e. , efficiency ratio and net interest yield) on a FTE basis. Although these are non-GAAP measures, we believe managing the business with net interest income on a FTE basis provides a more accurate picture of the interest margin for comparative purposes. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 35 percent. This measure ensures comparability of net interest income arising from taxable and tax-exempt sources. As mentioned above, certain per formance measures including the efficiency ratio and net interest yield utilize net interest income (and thus total revenue) on a FTE basis. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest yield evaluates how many basis points we are earning over the cost of funds. During our annual planning process, we set efficiency targets for the Corporation and each line of business. We believe the use of these non-GAAP measures provides additional clarity in assessing our results. Targets vary by year and by business and are based on a variety of factors including maturity of the business, competitive environment, market factors and other items including our risk appetite. We also evaluate our business based on the following ratios that utilize tangible equity, a non-GAAP measure. Return on average tangible common shareholders’ equity measures our earnings contribution as a percentage of common shareholders’ equity plus any Common Equivalent Securities (CES) less goodwill and intangible assets, (excluding MSRs), net of related deferred tax liabilities. ROTE measures our earnings contribution as a percentage of average shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. The tangible common equity ratio represents common shareholders’ equity plus any CES less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. The tangible equity ratio represents total shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. Tangible book value per common share represents ending common shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by ending common shares outstanding plus the number of common shares issued upon conversion of common equivalent shares. These measures are used to evaluate our use of equity (i. e. , capital). In addition, profitability, relationship and investment models all use ROTE as key measures to support our overall growth goals. The aforementioned supplemental data and per formance measures are presented in Tables 6 and 7 and Statistical Tables XII and XIV. In addition, in Table 7 and Statistical Table XIV, we have excluded the impact of goodwill impairment charges of $12.4 billion recorded in 2010 when presenting earnings and diluted earnings per common share, the efficiency ratio, return on average assets, return on average common shareholders’ equity, return on average tangible common shareholders’ equity and ROTE. Accordingly, these are non-GAAP measures. Statistical Tables XIII and XV provide reconciliations of these non-GAAP measures with financial measures defined by GAAP. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate these measures and ratios differently
<table><tr><td>(Dollars in millions, except per share information)</td><td>2010</td><td>2009</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td> Fully taxable-equivalent basis data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$52,693</td><td>$48,410</td><td>$46,554</td><td>$36,190</td><td>$35,818</td></tr><tr><td>Total revenue, net of interest expense</td><td>111,390</td><td>120,944</td><td>73,976</td><td>68,582</td><td>74,000</td></tr><tr><td>Net interest yield<sup>-1</sup></td><td>2.78%</td><td>2.65%</td><td>2.98%</td><td>2.60%</td><td>2.82%</td></tr><tr><td>Efficiency ratio</td><td>74.61</td><td>55.16</td><td>56.14</td><td>54.71</td><td>48.37</td></tr><tr><td> Performance ratios, excluding goodwill impairment charges<sup>-2</sup></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Per common share information</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Earnings</td><td>$0.87</td><td></td><td></td><td></td><td></td></tr><tr><td>Diluted earnings</td><td>0.86</td><td></td><td></td><td></td><td></td></tr><tr><td>Efficiency ratio</td><td>63.48%</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average assets</td><td>0.42</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average common shareholders’ equity</td><td>4.14</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average tangible common shareholders’ equity</td><td>7.03</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average tangible shareholders’ equity</td><td>7.11</td><td></td><td></td><td></td><td></td></tr></table>
(1) Calculation includes fees earned on overnight deposits placed with the Federal Reserve of $368 million and $379 million for 2010 and 2009. The Corporation did not have fees earned on overnight deposits during 2008, 2007 and 2006. (2) Per formance ratios are calculated excluding the impact of goodwill impairment charges of $12.4 billion recorded during 2010. Baker Hughes, a GE company Notes to Consolidated and Combined Financial Statements issuance pursuant to awards granted under the LTI Plan over its term which expires on the date of the annual meeting of the Company in 2027. A total of 53.7 million shares of Class A common stock are available for issuance as of December 31, 2017. As a result of the acquisition of Baker Hughes, on July 3, 2017, each outstanding Baker Hughes stock option was converted into an option to purchase a share of Class A common stock in the Company. Consequently, we issued 6.8 million stock options which are fully vested. Each converted option is subject to the same terms and conditions as applied to the original option, and the per share exercise price of each converted option was reduced by $17.50 to reflect the per share amount of the special dividend pursuant to the agreement associated with the Transactions. Additionally, as a result of the acquisition of Baker Hughes, there were 1.7 million Baker Hughes restricted stock units (RSUs) that were converted to BHGE RSUs at a fair value of $40.18. Stock-based compensation cost is measured at the date of grant based on the calculated fair value of the award and is generally recognized on a straight-line basis over the vesting period of the equity grant. The compensation cost is determined based on awards ultimately expected to vest; therefore, we have reduced the cost for estimated forfeitures based on historical forfeiture rates. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. There were no stock-based compensation costs capitalized as the amounts were not material. During the year ended December 31, 2017, we issued 2.1 million RSUs and 1.6 million stock options under the LTI Plan. These RSUs and stock options generally vest in equal amounts over a three-year vesting period provided that the employee has remained continuously employed by the Company through such vesting date. Stock based compensation expense was $37 million in 2017. Included in this amount is $15 million of expense which relates to the acceleration of equity awards upon termination of employment of Baker Hughes employees with change in control agreements, and are included as part of "Merger and related costs" in the consolidated and combined statements of income (loss). As BHGE LLC is a pass through entity, any tax benefit would be recognized by its partners. Due to its cumulative losses, BHGE is unable to recognize a tax benefit on its share of stock related expenses. Stock Options The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The following table presents the weighted average assumptions used in the option pricing model for options granted under the LTI Plan. The expected life of the options represents the period of time the options are expected to be outstanding. The expected life is based on a simple average of the vesting term and original contractual term of the awards. The expected volatility is based on the historical volatility of our five main competitors over a six year period. The risk-free interest rate is based on the observed U. S. Treasury yield curve in effect at the time the options were granted. The dividend yield is based on a five year history of dividend payouts in Baker Hughes.
<table><tr><td></td><td>2017</td></tr><tr><td>Expected life (years)</td><td>6</td></tr><tr><td>Risk-free interest rate</td><td>2.1%</td></tr><tr><td>Volatility</td><td>36.4%</td></tr><tr><td>Dividend yield</td><td>1.2%</td></tr><tr><td>Weighted average fair value per share at grant date</td><td>$12.32</td></tr></table>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Fiscal years ended May 25, 2008, May 27, 2007, and May 28, 2006 Columnar Amounts in Millions Except Per Share Amounts The following table presents estimated future gross benefit payments and Medicare Part D subsidy receipts for the Company’s plans:
<table><tr><td></td><td></td><td colspan="2">Health Care and Life Insurance</td></tr><tr><td></td><td> Pension Benefits</td><td> Benefit Payments</td><td>Subsidy Receipts</td></tr><tr><td>2009</td><td>$125.1</td><td>$44.2</td><td>$-4.3</td></tr><tr><td>2010</td><td>129.2</td><td>45.1</td><td>-4.5</td></tr><tr><td>2011</td><td>133.7</td><td>45.4</td><td>-4.4</td></tr><tr><td>2012</td><td>137.7</td><td>45.2</td><td>-4.3</td></tr><tr><td>2013</td><td>143.3</td><td>43.7</td><td>-4.1</td></tr><tr><td>Succeeding 5 years</td><td>805.6</td><td>196.2</td><td>-18.2</td></tr></table>
Certain employees of the Company are covered under defined contribution plans. The expense related to these plans was $24.4 million, $22.9 million, and $25.9 million in fiscal 2008, 2007, and 2006, respectively.19. RELATED PARTY TRANSACTIONS Sales to affiliates (equity method investees) of $4.2 million, $3.8 million, and $2.9 million for fiscal 2008, 2007, and 2006, respectively, are included in net sales. The Company received management fees from affiliates of $16.3 million, $14.8 million, and $13.5 million in fiscal 2008, 2007, and 2006, respectively. Accounts receivable from affiliates totaled $3.2 million and $2.5 million at May 25, 2008 and May 27, 2007, respectively, of which $3.0 million and $2.1 million are included in current assets held for sale, respectively. Accounts payable to affiliates totaled $15.6 million and $13.5 million at May 25, 2008 and May 27, 2007, respectively. During the first quarter of fiscal 2007, the Company sold an aircraft for proceeds of approximately $8.1 million to a company on whose board of directors one of the Company’s directors sits. The Company recognized a gain of approximately $3.0 million on the transaction. The Company leases various buildings that are beneficially owned by Opus Corporation or entities related to Opus Corporation (the “Opus Entities”). The Opus Entities are affiliates or part of a large, national real estate development company. A former member of the Company’s Board of Directors, who left the board in the second quarter of fiscal 2008, is a beneficial owner, officer and chairman of Opus Corporation, and a director or officer of the related entities. The agreements relate to the leasing of land, buildings, and equipment for the Company in Omaha, Nebraska. The Company occupies the buildings pursuant to long-term leases with Opus Corporation and other investors, and the leases contain various termination rights and purchase options. The Company made rental payments of $13.5 million, $14.4 million, and $15.8 million in fiscal 2008, 2007, and 2006, respectively, to the Opus Entities. The Company has also contracted with the Opus Entities for construction and property management services. The Company made payments of $1.6 million, $2.8 million, and $3.0 million to the Opus Entities for these services in fiscal 2008, 2007, and 2006, respectively.20. BUSINESS SEGMENTS AND RELATED INFORMATION The Company’s operations are organized into three reporting segments: Consumer Foods, Food and Ingredients, and International Foods. The Consumer Foods reporting segment includes branded, private label, and customized food products which are sold in various retail and foodservice channels. The products include a variety of categories (meals, entrees, condiments, sides, snacks, and desserts) across frozen, refrigerated, and services revenue net of direct expenses reflecting higher financially reportable development revenue; and $65 million of stronger owned, leased, corporate housing and other revenue net of direct expenses. The fee improvement versus the prior year also reflects the recognition in 2005 of $14 million of incentive fees that were calculated based on prior period results, but not earned and due until 2005. The increase in owned, leased, corporate housing and other revenue net of direct expenses is primarily attributable to properties acquired in 2005, including the CTF properties, the strong demand environment in 2005, and our receipt in 2005, of a $10 million termination fee associated with one property that left our system. The favorable items noted above were partially offset by $146 million of increased general and administrative expenses and $46 million of lower synthetic fuel revenue net of synthetic fuel expenses. Increased general and administrative expenses were associated with our Lodging segments as unallocated general and administrative expenses were down slightly compared to the prior year. The increase in general, administrative and other expenses reflects a $94 million pre-tax charge impacting our Full-Service Lodging segment, primarily due to the non-cash write-off of deferred contract acquisition costs associated with the termination of management agreements (discussed more fully later in this report in the “CTF Holdings Ltd. ” discussion under the “Investing Activities Cash Flows” caption in the “Liquidity and Capital Resources” section), and $30 million of pre-tax expenses associated with our bedding incentive program, impacting our Full-Service, Select-Service and Extended-Stay Lodging segments. We implemented the bedding incentive program in 2005 to ensure that guests could enjoy the comfort and luxury of our new bedding by year-end 2005. General and administrative expenses in 2005 also reflect pre-tax performance termination cure payments of $15 million associated with two properties, a $9 million pre-tax charge associated with three guarantees, increased other net overhead costs of $13 million including costs related to the Company’s unit growth, development and systems, and $2 million of increased foreign exchange losses partially offset by $5 million of lower litigation expenses. Additionally, in 2004, general and administrative expenses included a $13 million charge associated with the write-off of deferred contract acquisition costs. Operating income for 2005 includes a synthetic fuel operating loss of $144 million versus $98 million of operating losses in the prior year, reflecting increased costs and the consolidation of our synthetic fuel operations from the start of the 2004 second quarter, which resulted in the recognition of revenue and expenses for all of 2005 versus only three quarters in 2004, as we accounted for the synthetic fuel operations using the equity method of accounting in the 2004 first quarter. For additional information, see our “Synthetic Fuel” segment discussion later in this report.2004 COMPARED TO 2003 Operating income increased $100 million to $477 million in 2004 from $377 million in 2003. The increase is primarily due to higher fees, which are related both to stronger RevPAR, driven by increased occupancy and average daily rate, and to the growth in the number of rooms, and strong timeshare results, which are mainly attributable to strong demand and improved margins, partially offset by higher general and administrative expenses. General, administrative and other expenses increased $84 million in 2004 to $607 million from $523 million in 2003, primarily reflecting higher administrative expenses in our Full-Service, Select-Service, and Extended-Stay segments ($55 million) and Timeshare segment ($24 million), primarily associated with increased overhead costs related to the Company’s unit growth and timeshare development, and a $10 million reduction in foreign exchange gains, offset by $6 million of lower litigation expenses. Higher general and administrative expenses of $84 million also reflect a $13 million writeoff of deferred contract acquisition costs as further discussed in the “2004 Compared to 2003” caption under the “Select-Service Lodging” heading later in this report. Gains and Other Income The following table shows our gains and other income for 2005, 2004, and 2003. |
86 | What's the greatest value of Stores Opened in 2011? | which resulted in charges for inventory write-downs, property and equipment impairments, employee termination benefits, intangible asset impairments and facility closure costs. ? We ended fiscal 2011 with $1.1 billion of cash and cash equivalents, compared to $1.8 billion at the end of fiscal 2010. Operating cash flow decreased to $1.2 billion in fiscal 2011 compared to fiscal 2010 operating cash flow of $2.2 billion due primarily to changes in working capital, while capital expenditures increased 21.0% to $744 million. ? During fiscal 2011, we made four dividend payments totaling $0.58 per share, or $237 million in the aggregate. ? We repurchased and retired 32.6 million shares at a cost of $1.2 billion during fiscal 2011. Consolidated Results The following table presents selected consolidated financial data for each of the past three fiscal years ($ in millions, except per share amounts):
<table><tr><td> Consolidated Performance Summary </td><td>2011 -1</td><td>2010 -2</td><td>2009 -3(4)</td></tr><tr><td>Revenue</td><td>$50,272</td><td>$49,694</td><td>$45,015</td></tr><tr><td>Revenue gain %</td><td>1.2%</td><td>10.4%</td><td>12.5%</td></tr><tr><td>Comparable store sales % (decline) gain</td><td>-1.8%</td><td>0.6%</td><td>-1.3%</td></tr><tr><td>Gross profit as % of revenue<sup>-5</sup></td><td>25.1%</td><td>24.5%</td><td>24.4%</td></tr><tr><td>SG&A as % of revenue<sup>-5</sup></td><td>20.5%</td><td>19.9%</td><td>20.0%</td></tr><tr><td>Operating income</td><td>$2,114</td><td>$2,235</td><td>$1,870</td></tr><tr><td>Operating income as % of revenue</td><td>4.2%</td><td>4.5%</td><td>4.2%</td></tr><tr><td>Net earnings</td><td>$1,277</td><td>$1,317</td><td>$1,003</td></tr><tr><td>Diluted earnings per share</td><td>$3.08</td><td>$3.10</td><td>$2.39</td></tr></table>
(1) Included within our operating income and net earnings for fiscal 2011 is $222 million ($147 million net of taxes) of restructuring charges recorded in the fiscal fourth quarter related to measures we took to restructure our businesses. These charges resulted in a decrease in our operating income of 0.5% of revenue for the fiscal year. (2) Included within our operating income and net earnings for fiscal 2010 is $52 million ($25 million net of taxes and noncontrolling interest) of restructuring charges recorded in the fiscal first quarter related to measures we took to restructure our businesses. These charges resulted in a decrease in our operating income of 0.1% of revenue for the fiscal year. (3) Included within our operating income and net earnings for fiscal 2009 is $78 million ($48 million net of tax) of restructuring charges recorded in the fiscal fourth quarter related to measures we took to restructure our businesses. In addition, operating income is inclusive of goodwill and tradename impairment charges of $66 million ($64 net of tax) related to our former Speakeasy business. Collectively, these charges resulted in a decrease in our operating income of 0.2% of revenue for the fiscal year. (4) Included within our net earnings for fiscal 2009 is $111 million ($96 million net of tax) of investment impairment charges related to our investment in the common stock of CPW. (5) Because retailers vary in how they record costs of operating their supply chain between cost of goods sold and SG&A, our gross profit rate and SG&A rate may not be comparable to other retailers’ corresponding rates. For additional information regarding costs classified in cost of goods sold and SG&A, refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Fiscal 2011 Results Compared With Fiscal 2010 Throughout fiscal 2011, the majority of geographic markets in which we operate generally continued to endure difficult and uncertain economic conditions. In addition, customer appetite for certain product categories was below industry expectations. Both of these factors had a direct bearing on our revenue. We have responded to the current economic environment by closely managing our SG&A, as well as focusing on efforts to improve our gross profit. The 1.2% revenue increase in fiscal 2011 resulted primarily from the net addition of 147 new stores during fiscal 2011 and the positive impact of foreign currency exchange rate fluctuations, partially offset by a comparable store sales decline. The following table presents the Domestic segment’s revenue mix percentages and comparable store sales percentage changes by revenue category in fiscal 2010 and 2009:
<table><tr><td></td><td colspan="2">Revenue Mix Summary Year Ended</td><td colspan="2">Comparable Store Sales Summary Year Ended</td></tr><tr><td></td><td>February 27, 2010</td><td>February 28, 2009</td><td>February 27, 2010</td><td>February 28, 2009</td></tr><tr><td>Consumer electronics</td><td>39%</td><td>39%</td><td>1.1%</td><td>-5.8%</td></tr><tr><td>Home office</td><td>34%</td><td>31%</td><td>12.8%</td><td>10.4%</td></tr><tr><td>Entertainment</td><td>16%</td><td>19%</td><td>-13.2%</td><td>-5.9%</td></tr><tr><td>Appliances</td><td>4%</td><td>5%</td><td>-4.2%</td><td>-15.4%</td></tr><tr><td>Services</td><td>6%</td><td>6%</td><td>-1.1%</td><td>4.1%</td></tr><tr><td>Other</td><td>1%</td><td><1%</td><td>n/a</td><td>n/a</td></tr><tr><td>Total</td><td>100%</td><td>100%</td><td>1.7%</td><td>-1.3%</td></tr></table>
Our Domestic segment’s comparable store sales gain in fiscal 2010 improved sequentially each quarter of the fiscal year due primarily to an increase in average ticket and reflected our market share gains. The products having the largest effect on our Domestic segment’s comparable store sales gain in fiscal 2010 were notebook computers, flat-panel televisions and mobile phones. Stronger sales in these product categories were partially offset by comparable store sales declines in our entertainment revenue category. Revenue from our Domestic segment’s online operations increased 22% in fiscal 2010 and is incorporated in the table above. The 1.1% comparable store sales gain in the consumer electronics revenue category was driven primarily by increases in the sales of flat-panel televisions as unit sales increases more than offset average selling price decreases, partially offset by declines in the sales of navigation products and MP3 players. The 12.8% comparable store sales gain in the home office revenue category was primarily the result of continued growth in the sales of notebook computers, which benefited from the launch of a new operating system, as well as mobile phones, which included a full year of our Best Buy Mobile storewithin-a-store experience in all U. S. Best Buy stores, partially offset by declines in the sales of computer monitors. The 13.2% comparable store sales decline in the entertainment revenue category was due principally to a decline in sales of video gaming, partially caused by industry-wide softness and a maturing product platform, as well as a continued decline in sales of DVDs and CDs. The 4.2% comparable store sales decline in the appliances revenue category was due to a decrease in unit sales which more than offset increases in average selling prices. The 1.1% comparable store sales decline in the services revenue category was due primarily to a decline in home theater installation, partially offset by modest increases in our sales of extended warranties. Our Domestic segment experienced gross profit growth of $407 million in fiscal 2010, or 4.7% compared to fiscal 2009, due to increased revenue volumes. The 0.4% of revenue decrease in the gross profit rate was due primarily to a change in revenue mix, which reduced the gross profit rate by 0.5% of revenue and resulted from a continued shift in the revenue mix to sales of lower-margin notebook computers, partially offset by additional mix shift into higher-margin mobile phones. In addition, improved margin rate performance provided a 0.1% of revenue increase to the gross profit rate. Despite revenue growth of 6.4%, our Domestic segment’s SG&A grew only 3.1% or by $207 million. Continued store openings and significant year over year performance improvements drove higher SG&A spend in fiscal 2010 for incentive pay, payroll and benefits and rent, partially offset by lower SG&A spend in various discretionary categories such as information technology and supply chain project expenditures, store reset and transformation costs, advertising and travel. The 0.6% of revenue SG&A rate decline was primarily due to the reductions in discretionary categories discussed above, which collectively reduced the SG&A rate by 1.0% of revenue. The overall leveraging impact of higher comparable store sales on payroll and benefits further reduced the SG&A rate by 0.2% of revenue. However, we had higher incentive pay expense due to improvements in performance in fiscal 2010 and no incentive pay expense in the prior year, which collectively offset the SG&A rate improvement by 0.6% of revenue. The following table reconciles our International segment stores open at the end of each of the last three fiscal years:
<table><tr><td> </td><td rowspan="2"> Fiscal 2009 Total Stores at End of Fiscal Year </td><td colspan="3"> Fiscal 2010</td><td colspan="3"> Fiscal 2011</td></tr><tr><td> </td><td> Stores Opened </td><td>Stores Closed</td><td> Total Stores at End of Fiscal Year </td><td> Stores Opened </td><td>Stores Closed</td><td> Total Stores at End of Fiscal Year </td></tr><tr><td>Best Buy Europe — small box<sup>-1</sup></td><td>2,465</td><td>82</td><td>-94</td><td>2,453</td><td>86</td><td>-99</td><td>2,440</td></tr><tr><td>Best Buy Europe — big box<sup>-2</sup></td><td>—</td><td>—</td><td>—</td><td>—</td><td>6</td><td>—</td><td>6</td></tr><tr><td>Canada</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Future Shop</td><td>139</td><td>5</td><td>—</td><td>144</td><td>2</td><td>—</td><td>146</td></tr><tr><td>Best Buy</td><td>58</td><td>6</td><td>—</td><td>64</td><td>7</td><td>—</td><td>71</td></tr><tr><td>Best Buy Mobile</td><td>3</td><td>1</td><td>—</td><td>4</td><td>6</td><td>—</td><td>10</td></tr><tr><td>China</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Five Star</td><td>164</td><td>6</td><td>-12</td><td>158</td><td>12</td><td>-4</td><td>166</td></tr><tr><td>Best Buy<sup>-3</sup></td><td>5</td><td>1</td><td>—</td><td>6</td><td>2</td><td>—</td><td>8</td></tr><tr><td>Mexico</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Best Buy</td><td>1</td><td>4</td><td>—</td><td>5</td><td>1</td><td>—</td><td>6</td></tr><tr><td>Turkey</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Best Buy<sup>-3</sup></td><td>—</td><td>1</td><td>—</td><td>1</td><td>1</td><td>—</td><td>2</td></tr><tr><td>Total International segment stores</td><td>2,835</td><td>106</td><td>-106</td><td>2,835</td><td>123</td><td>-103</td><td>2,855</td></tr></table>
(1) Represents The Carphone Warehouse and The Phone House small-format stores. (2) Represents Best Buy branded large-format stores in the U. K. (3) On February 21, 2011, we announced plans to exit the Turkey market and restructure the Best Buy branded stores in China during fiscal 2012. Fiscal 2011 Results Compared With Fiscal 2010 While challenging economic conditions persisted in fiscal 2011 in many of the countries in which we operate, our International segment continued to grow revenue and experienced a comparable store sales gain for the year. A decline in operating income was due principally to the impact of the restructuring activities in fiscal 2011. Excluding the impact of foreign currency exchange rate fluctuations, the International segment experienced gross profit improvements with only a modest increase in SG&A. Continued growth in consumer spending and temporary government stimulus programs contributed to stronger sales and improved operating income in our China operations, particularly in our Five Star business. Our Canada operations faced many of the same market conditions and factors affecting the U. S. consumer electronics industry, with the adoption of new technology and the timing of product life-cycles continuing to play an important role in revenue trends. Similarly, our Europe operations saw the impacts from a constrained economy, but continued to benefit from higher Best Buy Mobile profit share-based management fees paid in fiscal 2011. The 5.7% increase in revenue for fiscal 2011 was due to the positive impact of foreign currency exchange rate fluctuations (mainly related to the Canadian dollar), the impact of net new stores opened during fiscal 2011, and a 2.4% comparable store sales gain, partially offset by the impact of having one less week of revenue in Europe and a decline in sales in noncomparable sales channels. The increase in comparable store sales in fiscal 2011 was the result of gains in China and Europe, partially offset by a decline in Canada. Hologic, Inc. Notes to Consolidated Financial Statements (continued) (In thousands, except per share data) Fiscal 2007 Acquisition: Acquisition of BioLucent, Inc. On September 18, 2007 the Company completed the acquisition of BioLucent, Inc. (“BioLucent”) pursuant to a definitive agreement dated June 20, 2007. The results of operations for BioLucent have been included in the Company’s consolidated financial statements from the date of acquisition as part of its Mammography/Breast Care business segment. The Company has concluded that the acquisition of BioLucent does not represent a material business combination and therefore no pro forma financial information has been provided herein. BioLucent, previously located in Aliso Viejo, California, develops, markets and sells MammoPad breast cushions to decrease the discomfort associated with mammography. Prior to the acquisition, BioLucent’s primary research and development efforts were directed at its brachytherapy business which was focused on breast cancer therapy. Prior to the acquisition, BioLucent spun-off its brachytherapy technology and business to the holders of BioLucent’s outstanding shares of capital stock. As a result, the Company only acquired BioLucent’s MammoPad cushion business and related assets. The Company invested $1,000 directly in the spun-off brachytherapy business in exchange for shares of preferred stock issued by the new business. The aggregate purchase price for BioLucent was approximately $73,200, consisting of approximately $6,800 in cash and 2,314 shares of Hologic Common Stock valued at approximately $63,200, debt assumed and paid off of approximately $1,600 and approximately $1,600 for acquisition related fees and expenses. The Company determined the fair value of the shares issued in connection with the acquisition in accordance with EITF Issue No.99-12, Determination of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination. The acquisition also provides for up to two annual earn-out payments not to exceed $15,000 in the aggregate based on BioLucent’s achievement of certain revenue targets. The Company has considered the provision of EITF Issue No.95-8, Accounting for Contingent Consideration Paid to the Shareholders of an Acquired Enterprise in a Purchase Business Combination, and concluded that this contingent consideration will represent additional purchase price. As a result, goodwill will be increased by the amount of the additional consideration, if any, when it becomes due and payable. As of September 27, 2008, the Company has not recorded any amounts for these potential earn-outs. The allocation of the purchase price is based upon estimates of the fair value of assets acquired and liabilities assumed as of September 18, 2007. The components and allocation of the purchase price consists of the following approximate amounts: |
530 | In the year with largest amount of Management and financial advice fees, what's the sum of Distribution fees and Net investment income? (in million) | Protection The following table presents the results of operations of our Protection segment on an operating basis:
<table><tr><td></td><td colspan="2">Years Ended December 31,</td><td></td><td></td></tr><tr><td></td><td>2013</td><td>2012</td><td colspan="2">Change</td></tr><tr><td></td><td colspan="3">(in millions)</td><td></td></tr><tr><td>Revenues</td><td></td><td></td><td></td><td></td></tr><tr><td>Management and financial advice fees</td><td>$58</td><td>$55</td><td>$3</td><td>5%</td></tr><tr><td>Distribution fees</td><td>91</td><td>91</td><td>—</td><td>—</td></tr><tr><td>Net investment income</td><td>439</td><td>429</td><td>10</td><td>2</td></tr><tr><td>Premiums</td><td>1,188</td><td>1,121</td><td>67</td><td>6</td></tr><tr><td>Other revenues</td><td>410</td><td>392</td><td>18</td><td>5</td></tr><tr><td>Total revenues</td><td>2,186</td><td>2,088</td><td>98</td><td>5</td></tr><tr><td>Banking and deposit interest expense</td><td>—</td><td>1</td><td>-1</td><td>—</td></tr><tr><td>Total net revenues</td><td>2,186</td><td>2,087</td><td>99</td><td>5</td></tr><tr><td>Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>62</td><td>53</td><td>9</td><td>17</td></tr><tr><td>Interest credited to fixed accounts</td><td>145</td><td>143</td><td>2</td><td>1</td></tr><tr><td>Benefits, claims, losses and settlement expenses</td><td>1,252</td><td>1,146</td><td>106</td><td>9</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>118</td><td>110</td><td>8</td><td>7</td></tr><tr><td>Interest and debt expense</td><td>25</td><td>24</td><td>1</td><td>4</td></tr><tr><td>General and administrative expense</td><td>248</td><td>238</td><td>10</td><td>4</td></tr><tr><td>Total expenses</td><td>1,850</td><td>1,714</td><td>136</td><td>8</td></tr><tr><td>Operating earnings</td><td>$336</td><td>$373</td><td>$-37</td><td>-10%</td></tr></table>
Our Protection segment pretax operating income, which excludes net realized gains or losses and the market impact on indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual), decreased $37 million, or 10%, to $336 million for the year ended December 31, 2013 compared to $373 million for the prior year reflecting lower auto and home earnings. Net Revenues Net revenues, which exclude net realized gains or losses and the unearned revenue amortization and the reinsurance accrual offset to the market impact on indexed universal life benefits, increased $99 million, or 5%, to $2.2 billion for the year ended December 31, 2013 compared to $2.1 billion for the prior year primarily due to the impact of unlocking and growth in auto and home premiums, as well as an increase in net investment income. Net investment income, which excludes net realized gains or losses, increased $10 million, or 2%, to $439 million for the year ended December 31, 2013 compared to $429 million for the prior year due to an increase in investment income on fixed maturities driven by higher average invested assets for life and health. Premiums increased $67 million, or 6%, to $1.2 billion for the year ended December 31, 2013 compared to $1.1 billion for the prior year primarily due to growth in auto and home premiums driven by new policy sales growth across market segments, primarily from our affinity relationships with Costco and Progressive. Auto and home policy counts increased 11% year-over-year. Other revenues increased $18 million, or 5%, to $410 million for the year ended December 31, 2013 compared to $392 million for the prior year primarily due to an $18 million unfavorable impact from unlocking for the year ended December 31, 2013 compared to a $41 million unfavorable impact in the prior year. The primary driver of the unlocking impact to other revenues in both periods was lower projected gains on reinsurance contracts resulting from favorable mortality experience. Expenses Total expenses, which exclude the market impact on indexed universal life benefits (net of hedges and the related DAC amortization), increased $136 million, or 8%, to $1.9 billion for the year ended December 31, 2013 compared to $1.7 billion for the prior year primarily due to an increase in benefits, claims, losses and settlement expenses. Distribution expenses increased $9 million, or 17%, to $62 million for the year ended December 31, 2013 compared to $53 million for the prior year driven by higher compensation related to higher sales. Benefits, claims, losses and settlement expenses, which exclude the market impact on indexed universal life benefits (net of hedges), increased $106 million, or 9%, to $1.3 billion for the year ended December 31, 2013 compared to $1.1 billion for the prior year due to the impact of unlocking, higher expenses related to our auto and home business, an We expect net interest expense of approximately $135 to $140 in 2011, subject to capital deployment activities during the year. Our effective tax rate was 31.2 percent in 2008, 31.5 percent in 2009 and 30.7 percent in 2010. The 2008 rate includeda$35, or approximately $0.09 per-share, benefit from the settlement of tax refund litigation, which reduced the 2008 tax rate by 100 basis points. We anticipate an effective tax rate of approximately 31 percent in 2011. For additional discussion of tax matters, see Note E to the Consolidated Financial Statements. In 2008, we entered into an agreement to sell our Spanish nitrocellulose operation and recognized a pretax loss of $11 in discontinued operations in anticipation of the sale. The sale of this operation was completed in 2010. Our reported revenues exclude the revenues associated with this divested business. We have presented the operating results of this business, along with the loss from the sale, as discontinued operations, net of income taxes. R E V I EW OF BU S I NESS GROU P S AEROSPACE Review of 2010 vs. 2009
<table><tr><td>Year Ended December 31</td><td>2009</td><td>2010</td><td colspan="2">Variance</td></tr><tr><td>Revenues</td><td>$5,171</td><td>$5,299</td><td>$128</td><td>2.5%</td></tr><tr><td>Operating earnings</td><td>707</td><td>860</td><td>153</td><td>21.6%</td></tr><tr><td>Operating margin</td><td>13.7%</td><td>16.2%</td><td></td><td></td></tr><tr><td>Gulfstream aircraft deliveries (in units):</td><td></td><td></td><td></td><td></td></tr><tr><td>Green</td><td>94</td><td>99</td><td>5</td><td>5.3%</td></tr><tr><td>Completion</td><td>110</td><td>89</td><td>-21</td><td>-19.1%</td></tr></table>
The Aerospace group’s revenues increased in 2010 compared with 2009 due primarily to steady growth in aircraft services activity throughout the year. Aircraft manufacturing and outfitting revenues remained consistent with 2009 levels, with an increase in manufac- turing volume offset by reduced outfitting work. Aircraft manufacturing revenues increased 9 percent in 2010, the result of additional deliveries and a more favorable mix of green Gulfstream aircraft. The decline in aircraft outfitting revenues was associated primarily with the group’s completions work for other original equipment manufacturers (OEMs), reflecting decreased OEM production across the broader business-jet market. Aircraft services revenues, which include both Gulfstream and Jet Aviation’s maintenance and repair work, fixed-base operations and aircraft management services, increased 15 percent in 2010, reflecting the growing installed base of business-jet aircraft and increased utilization as the business-jet market recovers following the economic downturn. Revenues from sales of pre-owned aircraft were down slightly from 2009. The group’s operating earnings improved significantly in 2010 compared with 2009, with improvements in all areas of the group’s portfolio. The components of the earnings growth were as follows:
<table><tr><td>Aircraft manufacturing and outfitting</td><td>$68</td></tr><tr><td>Pre-owned aircraft</td><td>40</td></tr><tr><td>Aircraft services</td><td>29</td></tr><tr><td>SG&A/other</td><td>16</td></tr><tr><td>Total increase in operating earnings</td><td>$153</td></tr></table>
The group’s aircraft manufacturing and outfitting earnings were up in 2010 compared with 2009 due to the increase in aircraft manufacturing volume, as well as improved pricing on large-cabin aircraft and mix shift within large-cabin models. This increase was offset in part by reduced liquidated damages associated with fewer customer defaults. Margins for these activities were up 190 basis points compared with 2009. Pre-owned aircraft earnings improved significantly from 2009, when the group wrote down the carrying value of its pre-owned aircraft inventory. Pricing in the pre-owned market has improved since mid-2009, particularly for large-cabin aircraft, although inventories across the industry remain higher than historic norms. In 2010, the Aerospace group realized modest profits on its pre-owned sales, took no pre-owned aircraft write-downs and ended the year with no pre-owned aircraft in inventory. Consistent with the increased volume, aircraft services earnings continued to improve from 2009. Margins associated with aircraft services were up 70 basis points in 2010 due to improved marketplace pricing. The group’s operating earnings in 2010 were also favorably impacted by the timing of R&D expenditures and the absence of severance costs associated with workforce reductions in 2009. As a result of the factors discussed above, the group’s overall operating margins increased 250 basis points in 2010 compared with 2009. Review of 2009 vs. 2008
<table><tr><td>Year Ended December 31</td><td>2008</td><td>2009</td><td colspan="2">Variance</td></tr><tr><td>Revenues</td><td>$5,512</td><td>$5,171</td><td>$ -341</td><td>-6.2%</td></tr><tr><td>Operating earnings</td><td>1,021</td><td>707</td><td>-314</td><td>-30.8%</td></tr><tr><td>Operating margin</td><td>18.5%</td><td>13.7%</td><td></td><td></td></tr><tr><td>Gulfstream aircraft deliveries (in units):</td><td></td><td></td><td></td><td></td></tr><tr><td>Green</td><td>156</td><td>94</td><td>-62</td><td>-39.7%</td></tr><tr><td>Completion</td><td>152</td><td>110</td><td>-42</td><td>-27.6%</td></tr></table>
The Aerospace group’s revenues decreased in 2009, the result ofadecline in sales of Gulfstream aircraft that was offset in part by the addition of Jet Aviation, which we acquired in the fourth quarter of 2008. We reduced Gulfstream’s 2009 aircraft production, primarily in the group’s mid-cabin In summary, our cash flows for each period were as follows:
<table><tr><td>Years Ended(In Millions)</td><td>Dec 30,2017</td><td>Dec 31,2016</td><td>Dec 26,2015</td></tr><tr><td>Net cash provided by operating activities</td><td>$22,110</td><td>$21,808</td><td>$19,018</td></tr><tr><td>Net cash used for investing activities</td><td>-15,762</td><td>-25,817</td><td>-8,183</td></tr><tr><td>Net cash provided by (used for) financing activities</td><td>-8,475</td><td>-5,739</td><td>1,912</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td>$-2,127</td><td>$-9,748</td><td>$12,747</td></tr></table>
OPERATING ACTIVITIES Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. For 2017 compared to 2016, the $302 million increase in cash provided by operating activities was due to changes to working capital partially offset by adjustments for non-cash items and lower net income. Tax Reform did not have an impact on our 2017 cash provided by operating activities. The increase in cash provided by operating activities was driven by increased income before taxes and $1.0 billion receipts of customer deposits. These increases were partially offset by increased inventory and accounts receivable. Income taxes paid, net of refunds, in 2017 compared to 2016 were $2.9 billion higher due to higher income before taxes, taxable gains on sales of ASML, and taxes on the ISecG divestiture. We expect approximately $2.0 billion of additional customer deposits in 2018. For 2016 compared to 2015, the $2.8 billion increase in cash provided by operating activities was due to adjustments for non-cash items and changes in working capital, partially offset by lower net income. The adjustments for non-cash items were higher in 2016 primarily due to restructuring and other charges and the change in deferred taxes, partially offset by lower depreciation. INVESTING ACTIVITIES Investing cash flows consist primarily of capital expenditures; investment purchases, sales, maturities, and disposals; and proceeds from divestitures and cash used for acquisitions. Our capital expenditures were $11.8 billion in 2017 ($9.6 billion in 2016 and $7.3 billion in 2015). The decrease in cash used for investing activities in 2017 compared to 2016 was primarily due to higher net activity of available-for sale-investments in 2017, proceeds from our divestiture of ISecG in 2017, and higher maturities and sales of trading assets in 2017. This activity was partially offset by higher capital expenditures in 2017. The increase in cash used for investing activities in 2016 compared to 2015 was primarily due to our completed acquisition of Altera, net purchases of trading assets in 2016 compared to net sales of trading assets in 2015, and higher capital expenditures in 2016. This increase was partially offset by lower investments in non-marketable equity investments. FINANCING ACTIVITIES Financing cash flows consist primarily of repurchases of common stock, payment of dividends to stockholders, issuance and repayment of short-term and long-term debt, and proceeds from the sale of shares of common stock through employee equity incentive plans. The increase in cash used for financing activities in 2017 compared to 2016 was primarily due to net long-term debt activity, which was a use of cash in 2017 compared to a source of cash in 2016. During 2017, we repurchased $3.6 billion of common stock under our authorized common stock repurchase program, compared to $2.6 billion in 2016. As of December 30, 2017, $13.2 billion remained available for repurchasing common stock under the existing repurchase authorization limit. We base our level of common stock repurchases on internal cash management decisions, and this level may fluctuate. Proceeds from the sale of common stock through employee equity incentive plans totaled $770 million in 2017 compared to $1.1 billion in 2016. Our total dividend payments were $5.1 billion in 2017 compared to $4.9 billion in 2016. We have paid a cash dividend in each of the past 101 quarters. In January 2018, our Board of Directors approved an increase to our cash dividend to $1.20 per share on an annual basis. The board has declared a quarterly cash dividend of $0.30 per share of common stock for Q1 2018. The dividend is payable on March 1, 2018 to stockholders of record on February 7, 2018. Cash was used for financing activities in 2016 compared to cash provided by financing activities in 2015, primarily due to fewer debt issuances and the repayment of debt in 2016. This activity was partially offset by repayment of commercial paper in 2015 and fewer common stock repurchases in 2016. |
1,017 | What's the difference of Residential/Religious of kWhs Delivered between 2005 and 2004? (in million) | debt issuances, and proceeds from the disposition of properties, if any. Redevelopment Pipeline The Company defines redevelopment activities as existing properties owned or recently acquired, which have been targeted for additional investment by the Company with the expectation of increased financial returns through property improvement. The Company’s redevelopment strategy strives to improve the financial and physical aspects of the Company’s redevelopment apartment communities and to target a 10 percent return on the incremental renovation investment. Many of the Company’s properties are older and in excellent neighborhoods, providing lower density with large floor plans that represent attractive redevelopment opportunities. During redevelopment, apartment units may not be available for rent and, as a result, may have less than stabilized operations. As of December 31, 2007, the Company had thirteen major redevelopment communities aggregating 3,891 apartment units with estimated redevelopment costs of $135.6 million, of which approximately $74.6 million remains to be expended. These amounts exclude redevelopment projects owned by Fund II. Alternative Capital Sources Fund II has eight institutional investors, and the Company, with combined partner equity commitments of $265.9 million. Essex has committed $75.0 million to Fund II, which represents a 28.2% interest as general partner and limited partner. Fund II utilized debt as leverage equal to approximately 65% of the estimated value of the underlying real estate. Fund II invested in apartment communities in the Company’s targeted West Coast markets and, as of December 31, 2007, owned eleven apartment communities and three development projects. Essex records revenue for its asset management, property management, development and redevelopment services when earned, and promote income when realized if Fund II exceeds certain financial return benchmarks. Contractual Obligations and Commercial Commitments The following table summarizes the maturation or due dates of our contractual obligations and other commitments at December 31, 2007, and the effect such obligations could have on our liquidity and cash flow in future periods:
<table><tr><td>(In thousands)</td><td>2008</td><td>2009 and 2010</td><td>2011 and 2012</td><td>Thereafter</td><td>Total</td></tr><tr><td>Mortgage notes payable</td><td>$116,357</td><td>$179,502</td><td>$198,728</td><td>$768,286</td><td>$1,262,873</td></tr><tr><td>Exchangeable bonds</td><td>-</td><td>-</td><td>-</td><td>225,000</td><td>225,000</td></tr><tr><td>Lines of credit</td><td>8,818</td><td>161,000</td><td>-</td><td>-</td><td>169,818</td></tr><tr><td>Interest on indebtedness</td><td>87,000</td><td>93,100</td><td>57,900</td><td>204,800</td><td>442,800</td></tr><tr><td>Development commitments</td><td>153,000</td><td>260,600</td><td>89,800</td><td>33,700</td><td>537,100</td></tr><tr><td>Redevelopment commitments</td><td>42,700</td><td>31,900</td><td>-</td><td>-</td><td>74,600</td></tr><tr><td>Essex Apartment Value Fund II, L.P.</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>capital commitment</td><td>13,383</td><td>-</td><td>-</td><td>-</td><td>13,383</td></tr><tr><td></td><td>$421,258</td><td>$726,102</td><td>$346,428</td><td>$1,231,786</td><td>$2,725,574</td></tr></table>
Variable Interest Entities In accordance with Financial Accounting Standards Board (FASB) Interpretation No.46 Revised (FIN 46R), “Consolidation of Variable Interest Entities, an Interpretation of ARB No.51”, the Company consolidates 19 DownREIT limited partnerships (comprising twelve properties), and an office building that is subject to loans made by the Company. The Company consolidates these entities because it is deemed the primary beneficiary under FIN 46R. The total assets and liabilities related to these variable interest entities (VIEs), net of intercompany eliminations, were approximately $222.7 million and $163.9 million as of December 31, 2007 and $178.3 million and $110.9 million as of December 31, 2006, respectively. Interest holders in VIEs consolidated by the Company are allocated net income equal to the cash payments made to those interest holders for services rendered or distributions from cash flow. The remaining results of operations are generally allocated to the Company. As of December 31, 2007 and 2006, the Company was involved with two VIEs, of which it is not deemed to be the primary beneficiary. Total assets and liabilities of these entities were approximately $71.7 million and $78.5 million and $58.3 million and $58.4 million, as of December 31, 2007 and 2006, respectively. The Company does not have a significant exposure to loss from its involvement with these unconsolidated VIEs. Critical Accounting Policies and Estimates The preparation of consolidated financial statements, in accordance with U. S. generally accepted accounting METLIFE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (In millions)
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td colspan="3">Accumulated Other Comprehensive Income</td><td></td></tr><tr><td></td><td> Preferred Stock</td><td> Common Stock</td><td>Additional Paid-in Capital</td><td>Retained Earnings</td><td>Treasury Stock at Cost</td><td>Net Unrealized Investment Gains (Losses)</td><td>Foreign Currency Translation Adjustment</td><td>Defined Benefit Plans Adjustment</td><td>Total</td></tr><tr><td>Balance at January 1, 2004</td><td>$—</td><td>$8</td><td>$14,991</td><td>$4,193</td><td>$-835</td><td>$2,972</td><td>$-52</td><td>$-128</td><td>$21,149</td></tr><tr><td>Treasury stock transactions, net</td><td></td><td></td><td>46</td><td></td><td>-950</td><td></td><td></td><td></td><td>-904</td></tr><tr><td>Dividends on common stock</td><td></td><td></td><td></td><td>-343</td><td></td><td></td><td></td><td></td><td>-343</td></tr><tr><td>Comprehensive income (loss):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td>2,758</td><td></td><td></td><td></td><td></td><td>2,758</td></tr><tr><td>Other comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unrealized gains (losses) on derivative instruments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td>-62</td><td></td><td></td><td>-62</td></tr><tr><td>Unrealized investment gains (losses), net of related offsets and income tax</td><td></td><td></td><td></td><td></td><td></td><td>-6</td><td></td><td></td><td>-6</td></tr><tr><td>Cumulative effect of a change in accounting, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td>90</td><td></td><td></td><td>90</td></tr><tr><td>Foreign currency translation adjustments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td>144</td><td></td><td>144</td></tr><tr><td>Additional minimum pension liability adjustment, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-2</td><td>-2</td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>164</td></tr><tr><td>Comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>2,922</td></tr><tr><td>Balance at December 31, 2004</td><td>—</td><td>8</td><td>15,037</td><td>6,608</td><td>-1,785</td><td>2,994</td><td>92</td><td>-130</td><td>22,824</td></tr><tr><td>Treasury stock transactions, net</td><td></td><td></td><td>58</td><td></td><td>99</td><td></td><td></td><td></td><td>157</td></tr><tr><td>Common stock issued in connection with acquisition</td><td></td><td></td><td>283</td><td></td><td>727</td><td></td><td></td><td></td><td>1,010</td></tr><tr><td>Issuance of preferred stock</td><td>1</td><td></td><td>2,042</td><td></td><td></td><td></td><td></td><td></td><td>2,043</td></tr><tr><td>Issuance of stock purchase contracts related to common equity units</td><td></td><td></td><td>-146</td><td></td><td></td><td></td><td></td><td></td><td>-146</td></tr><tr><td>Dividends on preferred stock</td><td></td><td></td><td></td><td>-63</td><td></td><td></td><td></td><td></td><td>-63</td></tr><tr><td>Dividends on common stock</td><td></td><td></td><td></td><td>-394</td><td></td><td></td><td></td><td></td><td>-394</td></tr><tr><td>Comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td>4,714</td><td></td><td></td><td></td><td></td><td>4,714</td></tr><tr><td>Other comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unrealized gains (losses) on derivative instruments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td>233</td><td></td><td></td><td>233</td></tr><tr><td>Unrealized investment gains (losses), net of related offsets and income tax</td><td></td><td></td><td></td><td></td><td></td><td>-1,285</td><td></td><td></td><td>-1,285</td></tr><tr><td>Foreign currency translation adjustments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td>-81</td><td></td><td>-81</td></tr><tr><td>Additional minimum pension liability adjustment, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>89</td><td>89</td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-1,044</td></tr><tr><td>Comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>3,670</td></tr><tr><td>Balance at December 31, 2005</td><td>1</td><td>8</td><td>17,274</td><td>10,865</td><td>-959</td><td>1,942</td><td>11</td><td>-41</td><td>29,101</td></tr><tr><td>Treasury stock transactions, net</td><td></td><td></td><td>180</td><td></td><td>-398</td><td></td><td></td><td></td><td>-218</td></tr><tr><td>Dividends on preferred stock</td><td></td><td></td><td></td><td>-134</td><td></td><td></td><td></td><td></td><td>-134</td></tr><tr><td>Dividends on common stock</td><td></td><td></td><td></td><td>-450</td><td></td><td></td><td></td><td></td><td>-450</td></tr><tr><td>Comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income</td><td></td><td></td><td></td><td>6,293</td><td></td><td></td><td></td><td></td><td>6,293</td></tr><tr><td>Other comprehensive income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Unrealized gains (losses) on derivative instruments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td>-43</td><td></td><td></td><td>-43</td></tr><tr><td>Unrealized investment gains (losses), net of related offsets and income tax</td><td></td><td></td><td></td><td></td><td></td><td>-35</td><td></td><td></td><td>-35</td></tr><tr><td>Foreign currency translation adjustments, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td>46</td><td></td><td>46</td></tr><tr><td>Additional minimum pension liability adjustment, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-18</td><td>-18</td></tr><tr><td>Other comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-50</td></tr><tr><td>Comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>6,243</td></tr><tr><td>Adoption of SFAS 158, net of income tax</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-744</td><td>-744</td></tr><tr><td>Balance at December 31, 2006</td><td>$1</td><td>$8</td><td>$17,454</td><td>$16,574</td><td>$-1,357</td><td>$1,864</td><td>$57</td><td>$-803</td><td>$33,798</td></tr></table>
See accompanying notes to consolidated financial statements. default for unsecured financing arrangements, including, among other things, limitations on consolidations, mergers and sales of assets. Financial covenants under the 2018, 2016 and 2014 Credit Agreements include a consolidated indebtedness to consolidated EBITDA ratio of no greater than 5.0 to 1.0 through June 30, 2017, and no greater than 4.5 to 1.0 thereafter. If our credit rating falls below investment grade, additional restrictions would result, including restrictions on investments and payment of dividends. We were in compliance with all covenants under the 2018, 2016 and 2014 Credit Agreements as of December 31, 2018. As of December 31, 2018, there were no borrowings outstanding under the Multicurrency Revolving Facility. We may, at our option, redeem our senior notes, in whole or in part, at any time upon payment of the principal, any applicable make-whole premium, and accrued and unpaid interest to the date of redemption, except that the Floating Rate Notes due 2021 may not be redeemed until on or after March 20, 2019 and such notes do not have any applicable make-whole premium. In addition, we may redeem, at our option, the 2.700% Senior Notes due 2020, the 3.375% Senior Notes due 2021, the 3.150% Senior Notes due 2022, the 3.700% Senior Notes due 2023, the 3.550% Senior Notes due 2025, the 4.250% Senior Notes due 2035 and the 4.450% Senior Notes due 2045 without any make-whole premium at specified dates ranging from one month to six months in advance of the scheduled maturity date. The estimated fair value of our senior notes as of December 31, 2018, based on quoted prices for the specific securities from transactions in over-the-counter markets (Level 2), was $7,798.9 million. The estimated fair value of Japan Term Loan A and Japan Term Loan B, in the aggregate, as of December 31, 2018, based upon publicly available market yield curves and the terms of the debt (Level 2), was $294.7 million. The carrying values of U. S. Term Loan B and U. S. Term Loan C approximate fair value as they bear interest at short-term variable market rates. We entered into interest rate swap agreements which we designated as fair value hedges of underlying fixed-rate obligations on our senior notes due 2019 and 2021. These fair value hedges were settled in 2016. In 2016, we entered into various variable-to-fixed interest rate swap agreements that were accounted for as cash flow hedges of U. S. Term Loan B. In 2018, we entered into cross-currency interest rate swaps that we designated as net investment hedges. The excluded component of these net investment hedges is recorded in interest expense, net. See Note 13 for additional information regarding our interest rate swap agreements. We also have available uncommitted credit facilities totaling $55.0 million. At December 31, 2018 and 2017, the weighted average interest rate for our borrowings was 3.1 percent and 2.9 percent, respectively. We paid $282.8 million, $317.5 million, and $363.1 million in interest during 2018, 2017, and 2016, respectively.12. Accumulated Other Comprehensive (Loss) Income AOCI refers to certain gains and losses that under GAAP are included in comprehensive income but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Amounts in AOCI may be reclassified to net earnings upon the occurrence of certain events. Our AOCI is comprised of foreign currency translation adjustments, including unrealized gains and losses on net investment hedges, unrealized gains and losses on cash flow hedges, and amortization of prior service costs and unrecognized gains and losses in actuarial assumptions on our defined benefit plans. Foreign currency translation adjustments are reclassified to net earnings upon sale or upon a complete or substantially complete liquidation of an investment in a foreign entity. Unrealized gains and losses on cash flow hedges are reclassified to net earnings when the hedged item affects net earnings. Amounts related to defined benefit plans that are in AOCI are reclassified over the service periods of employees in the plan. See Note 14 for more information on our defined benefit plans. The following table shows the changes in the components of AOCI, net of tax (in millions):
<table><tr><td></td><td>Foreign Currency Translation</td><td>Cash Flow Hedges</td><td>Defined Benefit Plan Items</td><td>Total AOCI</td></tr><tr><td>Balance December 31, 2017</td><td>$121.5</td><td>$-66.5</td><td>$-138.2</td><td>$-83.2</td></tr><tr><td>AOCI before reclassifications</td><td>-135.4</td><td>68.2</td><td>-29.7</td><td>-96.9</td></tr><tr><td>Reclassifications to retained earnings (Note 2)</td><td>-17.4</td><td>-4.4</td><td>-21.1</td><td>-42.9</td></tr><tr><td>Reclassifications</td><td>-</td><td>23.6</td><td>12.0</td><td>35.6</td></tr><tr><td>Balance December 31, 2018</td><td>$-31.3</td><td>$20.9</td><td>$-177.0</td><td>$-187.4</td></tr></table>
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (COMBINED FOR CON EDISON AND CON EDISON OF NEW YORK)–CONTINUED Con Edison of New York Electric Con Edison of New York’s electric sales and deliveries, excluding off-system sales, in 2005 compared with 2004 were:
<table><tr><td></td><td colspan="4">Millions of kWhs Delivered</td><td colspan="4">Revenues in Millions</td></tr><tr><td></td><td colspan="2"> Twelve Months Ended</td><td colspan="2"></td><td colspan="2"> Twelve Months Ended</td><td colspan="2"></td></tr><tr><td> Description</td><td> December 31, 2005</td><td> December 31, 2004</td><td>Variation</td><td>Percent Variation</td><td> December 31, 2005</td><td> December 31, 2004</td><td>Variation</td><td>Percent Variation</td></tr><tr><td>Residential/Religious</td><td>13,690</td><td>12,673</td><td>1,017</td><td>8.0%</td><td>$2,884</td><td>$2,399</td><td>$485</td><td>20.2%</td></tr><tr><td>Commercial/Industrial</td><td>15,402</td><td>16,966</td><td>-1,564</td><td>-9.2</td><td>2,869</td><td>2,722</td><td>147</td><td>5.4</td></tr><tr><td>Retail access customers</td><td>16,848</td><td>14,143</td><td>2,705</td><td>19.1</td><td>679</td><td>699</td><td>-20</td><td>-2.9</td></tr><tr><td>NYPA, Municipal Agency and other sales</td><td>11,396</td><td>10,959</td><td>437</td><td>4.0</td><td>292</td><td>270</td><td>22</td><td>8.2</td></tr><tr><td>Other operating revenues</td><td>-</td><td>-</td><td>-</td><td>-</td><td>224</td><td>28</td><td>196</td><td>Large</td></tr><tr><td> Total</td><td> 57,336</td><td> 54,741</td><td>2,595</td><td>4.7%</td><td>$6,948</td><td>$6,118</td><td>$830</td><td>13.6%</td></tr></table>
Con Edison of New York’s electric operating revenues were $830 million higher in 2005 than in 2004, due primarily to increased recoverable purchased power and fuel costs ($405 million), warmer summer weather and sales growth ($119 million), the electric rate plan that took effect in April 2005 ($282 million), the charge in 2004 to resolve certain issues relating primarily to the treatment of prior period pension credits ($100 million) and recovery of costs relating to the East River Repowering Project ($54 million), offset in part by lower revenue taxes ($76 million; see “State Income Tax” in Note A to the financial statements), and provision for refund to customers of shared earnings above the target level ($53 million). Electric sales and delivery volumes in Con Edison of New York’s service area increased 4.7 percent in 2005 compared with 2004, primarily reflecting warmer weather in the 2005 summer period compared with 2004 weather, growth in usage by existing customers and increased new business. After adjusting for variations, principally weather and billing days in each period, electric sales and delivery volumes in Con Edison of New York’s service area increased 2.4 percent in 2005 compared with 2004. Con Edison of New York’s electric purchased power costs increased $285 million in 2005 compared with 2004 reflecting an increase in unit costs, partially offset by decreased purchased volumes associated with additional customers obtaining their energy supply through competitive providers. Electric fuel costs increased $120 million, reflecting higher sendout volumes from the company’s generating facilities and an increase in unit costs. Con Edison of New York’s electric operating income increased $133 million in 2005 compared with 2004. |
62,187.8292 | What will Investment securities be like in 2013 if it develops with the same increasing rate as current? (in million) | Financial derivatives involve, to varying degrees, interest rate, market and credit risk. For interest rate swaps and total return swaps, options and futures contracts, only periodic cash payments and, with respect to options, premiums are exchanged. Therefore, cash requirements and exposure to credit risk are significantly less than the notional amount on these instruments. Further information on our financial derivatives is presented in Note 1 Accounting Policies and Note 17 Financial Derivatives in the Notes To Consolidated Financial Statements in Item 8 of this Report, which is incorporated here by reference. Not all elements of interest rate, market and credit risk are addressed through the use of financial or other derivatives, and such instruments may be ineffective for their intended purposes due to unanticipated market changes, among other reasons. The following table summarizes the notional or contractual amounts and net fair value of financial derivatives at December 31, 2012 and December 31, 2011. Table 54: Financial Derivatives Summary
<table><tr><td></td><td colspan="2">December 31, 2012</td><td colspan="2">December 31, 2011</td></tr><tr><td>In millions</td><td>Notional/ ContractualAmount</td><td>Net Fair Value (a)</td><td>Notional/ Contractual Amount</td><td>Net Fair Value (a)</td></tr><tr><td> Derivatives designated as hedging instruments under GAAP</td><td></td><td></td><td></td><td></td></tr><tr><td>Total derivatives designated as hedging instruments</td><td>$29,270</td><td>$1,720</td><td>$29,234</td><td>$1,772</td></tr><tr><td> Derivatives not designated as hedging instruments under GAAP</td><td></td><td></td><td></td><td></td></tr><tr><td>Total derivatives used for residential mortgage banking activities</td><td>$166,819</td><td>$588</td><td>$196,991</td><td>$565</td></tr><tr><td>Total derivatives used for commercial mortgage banking activities</td><td>4,606</td><td>-23</td><td>2,720</td><td>-21</td></tr><tr><td>Total derivatives used for customer-related activities</td><td>163,848</td><td>30</td><td>158,095</td><td>-132</td></tr><tr><td>Total derivatives used for other risk management activities</td><td>1,813</td><td>-357</td><td>4,289</td><td>-327</td></tr><tr><td>Total derivatives not designated as hedging instruments</td><td>$337,086</td><td>$238</td><td>$362,095</td><td>$85</td></tr><tr><td>Total Derivatives</td><td>$366,356</td><td>$1,958</td><td>$391,329</td><td>$1,857</td></tr></table>
(a) Represents the net fair value of assets and liabilities.2011 VERSUS 2010 CONSOLIDATED INCOME STATEMENT REVIEW Summary Results Net income for 2011 was $3.1 billion, or $5.64 per diluted common share, compared with $3.4 billion, or $5.74 per diluted common share, for 2010. The decrease from 2010 was primarily due to an $850 million, or 6%, reduction in total revenue, a $492 million, or 6%, increase in noninterest expense and the impact of the $328 million after-tax gain on the sale of GIS recognized in 2010, partially offset by a $1.3 billion, or 54%, decrease in the provision for credit losses in 2011. In addition, 2010 net income attributable to common shareholders was also impacted by a noncash reduction of $250 million in connection with the redemption of TARP preferred stock. Net Interest Income Net interest income was $8.7 billion for 2011 down from $9.2 billion in 2010. The net interest margin decreased to 3.92% in 2011 compared with 4.14% for 2010, primarily due to the impact of lower purchase accounting accretion, a decline in the rate on average loan balances and the low interest rate environment partially offset by lower funding costs. Noninterest Income Noninterest income was $5.6 billion for 2011 and $5.9 billion for 2010. Noninterest income for 2011 reflected higher asset management fees and other income, higher residential mortgage banking revenue, and lower net other-thantemporary impairments (OTTI), that were offset by a decrease in corporate service fees primarily due to a reduction in the value of commercial mortgage servicing rights, lower service charges on deposits from the impact of Regulation E rules pertaining to overdraft fees, a decrease in net gains on sales of securities and lower consumer services fees due, in part, to a decline in interchange fees on individual debit card transactions in the fourth quarter partially offset by higher transaction volumes throughout 2011. Asset management revenue, including BlackRock, increased $34 million to $1.1 billion in 2011 compared to 2010. The increase was driven by strong sales performance by our Asset Management Group and somewhat higher equity earnings from our BlackRock investment. Discretionary assets under management at December 31, 2011 totaled $107 billion compared with $108 billion at December 31, 2010.
<table><tr><td></td><td colspan="5">At or for the year ended December 31</td></tr><tr><td>Dollars in millions, except as noted</td><td>2012 (a) (b)</td><td>2011 (b)</td><td>2010 (b)</td><td>2009 (b)</td><td>2008 (c)</td></tr><tr><td> BALANCESHEETHIGHLIGHTS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>$305,107</td><td>$271,205</td><td>$264,284</td><td>$269,863</td><td>$291,081</td></tr><tr><td>Loans</td><td>185,856</td><td>159,014</td><td>150,595</td><td>157,543</td><td>175,489</td></tr><tr><td>Allowance for loan and lease losses</td><td>4,036</td><td>4,347</td><td>4,887</td><td>5,072</td><td>3,917</td></tr><tr><td>Interest-earning deposits with banks</td><td>3,984</td><td>1,169</td><td>1,610</td><td>4,488</td><td>14,859</td></tr><tr><td>Investment securities</td><td>61,406</td><td>60,634</td><td>64,262</td><td>56,027</td><td>43,473</td></tr><tr><td>Loans held for sale</td><td>3,693</td><td>2,936</td><td>3,492</td><td>2,539</td><td>4,366</td></tr><tr><td>Goodwill and other intangible assets</td><td>10,869</td><td>10,144</td><td>10,753</td><td>12,909</td><td>11,688</td></tr><tr><td>Equity investments</td><td>10,877</td><td>10,134</td><td>9,220</td><td>10,254</td><td>8,554</td></tr><tr><td>Noninterest-bearing deposits</td><td>69,980</td><td>59,048</td><td>50,019</td><td>44,384</td><td>37,148</td></tr><tr><td>Interest-bearing deposits</td><td>143,162</td><td>128,918</td><td>133,371</td><td>142,538</td><td>155,717</td></tr><tr><td>Total deposits</td><td>213,142</td><td>187,966</td><td>183,390</td><td>186,922</td><td>192,865</td></tr><tr><td>Transaction deposits (d)</td><td>176,705</td><td>147,637</td><td>134,654</td><td>126,244</td><td>110,997</td></tr><tr><td>Borrowed funds (e)</td><td>40,907</td><td>36,704</td><td>39,488</td><td>39,261</td><td>52,240</td></tr><tr><td>Total shareholders’ equity</td><td>39,003</td><td>34,053</td><td>30,242</td><td>29,942</td><td>25,422</td></tr><tr><td>Common shareholders’ equity</td><td>35,413</td><td>32,417</td><td>29,596</td><td>22,011</td><td>17,490</td></tr><tr><td> CLIENTASSETS(billions)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discretionary assets under management</td><td>$112</td><td>$107</td><td>$108</td><td>$103</td><td>$103</td></tr><tr><td>Nondiscretionary assets under management</td><td>112</td><td>103</td><td>104</td><td>102</td><td>125</td></tr><tr><td>Total assets under administration</td><td>224</td><td>210</td><td>212</td><td>205</td><td>228</td></tr><tr><td>Brokerage account assets (f)</td><td>38</td><td>34</td><td>34</td><td>32</td><td>29</td></tr><tr><td>Total client assets</td><td>$262</td><td>$244</td><td>$246</td><td>$237</td><td>$257</td></tr><tr><td> SELECTEDRATIOS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest margin (g)</td><td>3.94%</td><td>3.92%</td><td>4.14%</td><td>3.82%</td><td>3.37%</td></tr><tr><td>Noninterest income to total revenue</td><td>38</td><td>39</td><td>39</td><td>44</td><td>39</td></tr><tr><td>Efficiency</td><td>68</td><td>64</td><td>57</td><td>56</td><td>59</td></tr><tr><td>Return on</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average common shareholders’ equity</td><td>8.31</td><td>9.56</td><td>10.88</td><td>9.78</td><td>6.52</td></tr><tr><td>Average assets</td><td>1.02</td><td>1.16</td><td>1.28</td><td>.87</td><td>.64</td></tr><tr><td>Loans to deposits</td><td>87</td><td>85</td><td>82</td><td>84</td><td>91</td></tr><tr><td>Dividend payout</td><td>29.0</td><td>20.2</td><td>6.8</td><td>21.4</td><td>104.6</td></tr><tr><td>Tier 1 common</td><td>9.6</td><td>10.3</td><td>9.8</td><td>6.0</td><td>4.8</td></tr><tr><td>Tier 1 risk-based</td><td>11.6</td><td>12.6</td><td>12.1</td><td>11.4</td><td>9.7</td></tr><tr><td>Common shareholders’ equity to total assets</td><td>11.6</td><td>12.0</td><td>11.2</td><td>8.2</td><td>6.0</td></tr><tr><td>Average common shareholders’ equity to average assets</td><td>11.5</td><td>11.9</td><td>10.4</td><td>7.2</td><td>9.6</td></tr><tr><td> SELECTEDSTATISTICS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employees</td><td>56,285</td><td>51,891</td><td>50,769</td><td>55,820</td><td>59,595</td></tr><tr><td>Retail Banking branches</td><td>2,881</td><td>2,511</td><td>2,470</td><td>2,513</td><td>2,581</td></tr><tr><td>ATMs</td><td>7,282</td><td>6,806</td><td>6,673</td><td>6,473</td><td>6,233</td></tr><tr><td>Residential mortgage servicing portfolio (billions)</td><td>$135</td><td>$131</td><td>$139</td><td>$158</td><td>$187</td></tr><tr><td>Commercial mortgage servicing portfolio (billions)</td><td>$282</td><td>$267</td><td>$266</td><td>$287</td><td>$270</td></tr></table>
(a) Includes the impact of RBC Bank (USA), which we acquired on March 2, 2012. (b) Includes the impact of National City, which we acquired on December 31, 2008. (c) Includes the impact of National City except for the following Selected Ratios: Net interest margin, Noninterest income to total revenue, Efficiency, Return on Average common shareholders’ equity, Return on Average assets, Dividend payout and Average common shareholders’ equity to average assets. (d) Represents the sum of interest-bearing money market deposits, interest-bearing demand deposits, and noninterest-bearing deposits. (e) Includes long-term borrowings of $19.3 billion, $20.9 billion, $24.8 billion, $26.3 billion and $33.6 billion for 2012, 2011, 2010, 2009 and 2008, respectively. Borrowings which mature more than one year after December 31, 2012 are considered to be long-term. (f) Amounts for 2012, 2011 and 2010 include cash and money market balances. (g) Calculated as taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under accounting principles generally accepted in the United States of America (GAAP) on the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the years 2012, 2011, 2010, 2009 and 2008 were $144 million, $104 million, $81 million, $65 million and $36 million, respectively. RESIDENTIAL MORTGAGE-BACKED SECURITIES At December 31, 2012, our residential mortgage-backed securities portfolio was comprised of $31.4 billion fair value of US government agency-backed securities and $6.1 billion fair value of non-agency (private issuer) securities. The agency securities are generally collateralized by 1-4 family, conforming, fixed-rate residential mortgages. The non-agency securities are also generally collateralized by 1-4 family residential mortgages. The mortgage loans underlying the non-agency securities are generally non-conforming (i. e. , original balances in excess of the amount qualifying for agency securities) and predominately have interest rates that are fixed for a period of time, after which the rate adjusts to a floating rate based upon a contractual spread that is indexed to a market rate (i. e. , a “hybrid ARM”), or interest rates that are fixed for the term of the loan. Substantially all of the non-agency securities are senior tranches in the securitization structure and at origination had credit protection in the form of credit enhancement, overcollateralization and/or excess spread accounts. During 2012, we recorded OTTI credit losses of $99 million on non-agency residential mortgage-backed securities. All of the losses were associated with securities rated below investment grade. As of December 31, 2012, the noncredit portion of impairment recorded in Accumulated other comprehensive income for non-agency residential mortgagebacked securities for which we have recorded an OTTI credit loss totaled $150 million and the related securities had a fair value of $3.7 billion. The fair value of sub-investment grade investment securities for which we have not recorded an OTTI credit loss as of December 31, 2012 totaled $1.9 billion, with unrealized net gains of $114 million. COMMERCIAL MORTGAGE-BACKED SECURITIES The fair value of the non-agency commercial mortgagebacked securities portfolio was $5.9 billion at December 31, 2012 and consisted of fixed-rate, private-issuer securities collateralized by non-residential properties, primarily retail properties, office buildings, and multi-family housing. The agency commercial mortgage-backed securities portfolio was $2.0 billion fair value at December 31, 2012 consisting of multi-family housing. Substantially all of the securities are the most senior tranches in the subordination structure. There were no OTTI credit losses on commercial mortgagebacked securities during 2012. ASSET-BACKED SECURITIES The fair value of the asset-backed securities portfolio was $6.5 billion at December 31, 2012 and consisted of fixed-rate and floating-rate, private-issuer securities collateralized primarily by various consumer credit products, including residential mortgage loans, credit cards, automobile loans, and student loans. Substantially all of the securities are senior tranches in the securitization structure and have credit protection in the form of credit enhancement, over-collateralization and/or excess spread accounts. We recorded OTTI credit losses of $11 million on assetbacked securities during 2012. All of the securities are collateralized by first lien and second lien residential mortgage loans and are rated below investment grade. As of December 31, 2012, the noncredit portion of impairment recorded in Accumulated other comprehensive income for asset-backed securities for which we have recorded an OTTI credit loss totaled $52 million and the related securities had a fair value of $603 million. For the sub-investment grade investment securities (available for sale and held to maturity) for which we have not recorded an OTTI loss through December 31, 2012, the fair value was $47 million, with unrealized net losses of $3 million. The results of our security-level assessments indicate that we will recover the cost basis of these securities. Note 8 Investment Securities in the Notes To Consolidated Financial Statements in Item 8 of this Report provides additional information on OTTI losses and further detail regarding our process for assessing OTTI. If current housing and economic conditions were to worsen, and if market volatility and illiquidity were to worsen, or if market interest rates were to increase appreciably, the valuation of our investment securities portfolio could be adversely affected and we could incur additional OTTI credit losses that would impact our Consolidated Income Statement. LOANS HELD FOR SALE Table 15: Loans Held For Sale
<table><tr><td>In millions</td><td>December 312012</td><td>December 312011</td></tr><tr><td>Commercial mortgages at fair value</td><td>$772</td><td>$843</td></tr><tr><td>Commercial mortgages at lower of cost or market</td><td>620</td><td>451</td></tr><tr><td>Total commercial mortgages</td><td>1,392</td><td>1,294</td></tr><tr><td>Residential mortgages at fair value</td><td>2,096</td><td>1,415</td></tr><tr><td>Residential mortgages at lower of cost or market</td><td>124</td><td>107</td></tr><tr><td>Total residential mortgages</td><td>2,220</td><td>1,522</td></tr><tr><td>Other</td><td>81</td><td>120</td></tr><tr><td>Total</td><td>$3,693</td><td>$2,936</td></tr></table>
We stopped originating commercial mortgage loans held for sale designated at fair value in 2008 and continue pursuing opportunities to reduce these positions at appropriate prices. At December 31, 2012, the balance relating to these loans was $772 million, compared to $843 million at December 31, 2011. We sold $32 million in unpaid principal balances of these commercial mortgage loans held for sale carried at fair value in 2012 and sold $25 million in 2011. |
6,536 | What is the sum of Net written premiums in the range of 1 and 3000 in 2014? (in million) | Notes to Consolidated Financial Statements Note 11. Income Taxes – (Continued) The federal income tax return for 2006 is subject to examination by the IRS. In addition for 2007 and 2008, the IRS has invited the Company to participate in the Compliance Assurance Process (“CAP”), which is a voluntary program for a limited number of large corporations. Under CAP, the IRS conducts a real-time audit and works contemporaneously with the Company to resolve any issues prior to the filing of the tax return. The Company has agreed to participate. The Company believes this approach should reduce tax-related uncertainties, if any. The Company and/or its subsidiaries also file income tax returns in various state, local and foreign jurisdictions. These returns, with few exceptions, are no longer subject to examination by the various taxing authorities before 2000. As discussed in Note 1, the Company adopted the provisions of FIN No.48, “Accounting for Uncertainty in Income Taxes,” on January 1, 2007. As a result of the implementation of FIN No.48, the Company recognized a decrease to beginning retained earnings on January 1, 2007 of $37 million. The total amount of unrecognized tax benefits as of the date of adoption was approximately $70 million. Included in the balance at January 1, 2007, were $51 million of tax positions that if recognized would affect the effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
<table><tr><td>Balance, January 1, 2007</td><td>$70</td></tr><tr><td>Additions based on tax positions related to the current year</td><td>12</td></tr><tr><td>Additions for tax positions of prior years</td><td>3</td></tr><tr><td>Reductions for tax positions related to the current year</td><td>-23</td></tr><tr><td>Settlements</td><td>-6</td></tr><tr><td>Expiration of statute of limitations</td><td>-3</td></tr><tr><td>Balance, December 31, 2007</td><td>$53</td></tr></table>
The Company anticipates that it is reasonably possible that payments of approximately $2 million will be made primarily due to the conclusion of state income tax examinations within the next 12 months. Additionally, certain state and foreign income tax returns will no longer be subject to examination and as a result, there is a reasonable possibility that the amount of unrecognized tax benefits will decrease by $7 million. At December 31, 2007, there were $42 million of tax benefits that if recognized would affect the effective rate. The Company recognizes interest accrued related to: (1) unrecognized tax benefits in Interest expense and (2) tax refund claims in Other revenues on the Consolidated Statements of Income. The Company recognizes penalties in Income tax expense (benefit) on the Consolidated Statements of Income. During 2007, the Company recorded charges of approximately $4 million for interest expense and $2 million for penalties. Provision has been made for the expected U. S. federal income tax liabilities applicable to undistributed earnings of subsidiaries, except for certain subsidiaries for which the Company intends to invest the undistributed earnings indefinitely, or recover such undistributed earnings tax-free. At December 31, 2007, the Company has not provided deferred taxes of $126 million, if sold through a taxable sale, on $361 million of undistributed earnings related to a domestic affiliate. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings of foreign subsidiaries is not practicable. In connection with a non-recurring distribution of $850 million to Diamond Offshore from a foreign subsidiary, a portion of which consisted of earnings of the subsidiary that had not previously been subjected to U. S. federal income tax, Diamond Offshore recognized $59 million of U. S. federal income tax expense as a result of the distribution. It remains Diamond Offshore’s intention to indefinitely reinvest future earnings of the subsidiary to finance foreign activities. Total income tax expense for the years ended December 31, 2007, 2006 and 2005, was different than the amounts of $1,601 million, $1,557 million and $639 million, computed by applying the statutory U. S. federal income tax rate of 35% to income before income taxes and minority interest for each of the years. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – CNA Financial – (Continued)
<table><tr><td>Year Ended December 31, 2014</td><td>Specialty</td><td>Commercial</td><td>International</td><td>Total</td></tr><tr><td>(In millions, except %)</td><td></td><td></td><td></td><td></td></tr><tr><td>Net written premiums</td><td>$2,839</td><td>$2,817</td><td>$880</td><td>$6,536</td></tr><tr><td>Net earned premiums</td><td>2,838</td><td>2,906</td><td>913</td><td>6,657</td></tr><tr><td>Net investment income</td><td>560</td><td>723</td><td>61</td><td>1,344</td></tr><tr><td>Net operating income</td><td>569</td><td>276</td><td>63</td><td>908</td></tr><tr><td>Net realized investment gains (losses)</td><td>9</td><td>9</td><td>-1</td><td>17</td></tr><tr><td>Net income</td><td>578</td><td>285</td><td>62</td><td>925</td></tr><tr><td>Other performance metrics:</td><td></td><td></td><td></td><td></td></tr><tr><td>Loss and loss adjustment expense ratio</td><td>57.3%</td><td>75.3%</td><td>53.5%</td><td>64.6%</td></tr><tr><td>Expense ratio</td><td>30.1</td><td>33.7</td><td>38.9</td><td>32.9</td></tr><tr><td>Dividend ratio</td><td>0.2</td><td>0.3</td><td></td><td>0.2</td></tr><tr><td>Combined ratio</td><td>87.6%</td><td>109.3%</td><td>92.4%</td><td>97.7%</td></tr><tr><td>Rate</td><td>3%</td><td>5%</td><td>-1%</td><td>3%</td></tr><tr><td>Retention</td><td>87%</td><td>73%</td><td>74%</td><td>78%</td></tr><tr><td>New Business (a)</td><td>$309</td><td>$491</td><td>$115</td><td>$915</td></tr></table>
(a) Includes Hardy new business of $133 million for the year ended December 31, 2016. Prior years amounts are not included for Hardy.2016 Compared with 2015 Net written premiums increased $21 million in 2016 as compared with 2015. Net written premiums for Commercial increased $23 million in 2016 as compared with 2015, driven by strong retention in middle markets, partially offset by a decrease in small business, which included a premium rate adjustment, as discussed in Note 18 of the Notes to Consolidated Financial Statements under Item 8. Net written premiums for Specialty in 2016 were consistent with 2015 as growth in warranty was offset by a decrease in management and professional liability and health care due to underwriting actions undertaken in certain business lines. Net written premiums for International in 2016 were consistent with 2015 and include favorable period over period premium development of $24 million. Excluding the effect of foreign currency exchange rates and premium development, net written premiums increased 1.4% in 2016 in International. The increase in net earned premiums was consistent with the trend in net written premiums in Commercial. Excluding the effect of foreign currency exchange rates and premium development, the increase in net earned premiums was consistent with the trend in net written premiums in International. Net operating income increased $15 million in 2016 as compared with 2015. The increase in net operating income was primarily due to higher favorable net prior year reserve development and net investment income, partially offset by an increase in the current accident year loss ratio and higher underwriting expenses. Catastrophe losses were $100 million (after tax and noncontrolling interests) in 2016 as compared to catastrophe losses of $85 million (after tax and noncontrolling interests) in 2015. Favorable net prior year development of $316 million and $218 million was recorded in 2016 and 2015. Specialty recorded favorable net prior year development of $305 million and $152 million in 2016 and 2015, Commercial recorded unfavorable net prior year development of $53 million in 2016 as compared with favorable net prior year development of $30 million in 2015 and International recorded favorable net prior year development of $64 million and $36 million in 2016 and 2015. Further information on net prior year development is included in Note 8 of the Notes to Consolidated Financial Statements included under Item 8. Specialty’s combined ratio decreased 3.7 points in 2016 as compared with 2015. The loss ratio decreased 4.6 points due to higher favorable net prior year reserve development, partially offset by a higher current accident year loss ratio. Specialty’s expense ratio increased 0.9 points in 2016 as compared with 2015 due to higher employee costs and higher information technology (“IT”) spending primarily related to new underwriting platforms. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – Boardwalk Pipeline – (Continued) Results of Operations The following table summarizes the results of operations for Boardwalk Pipeline for the years ended December 31, 2016, 2015 and 2014 as presented in Note 20 of the Notes to Consolidated Financial Statements included under Item 8:
<table><tr><td> Year Ended December 31</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td> (In millions)</td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td></tr><tr><td>Other revenue, primarily operating</td><td>$ 1,316</td><td>$ 1,253</td><td>$ 1,235</td></tr><tr><td>Net investment income</td><td></td><td>1</td><td>1</td></tr><tr><td>Total</td><td>1,316</td><td>1,254</td><td>1,236</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td></tr><tr><td>Operating</td><td>835</td><td>851</td><td>931</td></tr><tr><td>Interest</td><td>183</td><td>176</td><td>165</td></tr><tr><td>Total</td><td>1,018</td><td>1,027</td><td>1,096</td></tr><tr><td>Income before income tax</td><td>298</td><td>227</td><td>140</td></tr><tr><td>Income tax expense</td><td>-61</td><td>-46</td><td>-11</td></tr><tr><td>Amounts attributable to noncontrolling interests</td><td>-148</td><td>-107</td><td>-111</td></tr><tr><td>Net income attributable to Loews Corporation</td><td>$ 89</td><td>$ 74</td><td>$ 18</td></tr></table>
2016 Compared with 2015 Total revenues increased $62 million in 2016 as compared with 2015. Excluding the net effect of $13 million of proceeds received from the settlement of a legal matter in 2016, $9 million of proceeds received from a business interruption claim in 2015 and items offset in fuel and transportation expense, primarily retained fuel, operating revenues increased $83 million. The increase was driven by an increase in transportation revenues of $71 million, which resulted primarily from growth projects recently placed into service, incremental revenues from the Gulf South rate case of $18 million and a full year of revenues from the Evangeline pipeline. Storage and PAL revenues were higher by $17 million primarily from the effects of favorable market conditions on time period price spreads. Operating expenses decreased $16 million in 2016 as compared with 2015. Excluding receipt of a franchise tax refund of $10 million in 2015 and items offset in operating revenues, operating costs and expenses increased $5 million primarily due to higher employee related costs, partially offset by decreases in maintenance activities and depreciation expense. Interest expense increased $7 million primarily due to higher average interest rates compared to 2015. Net income increased $15 million in 2016 as compared with 2015, primarily reflecting higher revenues and lower operating expenses, partially offset by higher interest expense as discussed above.2015 Compared with 2014 Total revenues increased $18 million in 2015 as compared with 2014. Excluding the business interruption claim proceeds of $8 million and items offset in fuel and transportation expense, primarily retained fuel, operating revenues increased $33 million. This increase is primarily due to higher transportation revenues of $39 million from growth projects recently placed into service, including the Evangeline pipeline which was acquired in October of 2014 and $20 million of additional revenues resulting from the Gulf South rate case, partially offset by the effects of comparably warm weather experienced in the early part of the 2015 period in Boardwalk Pipeline’s market areas and unfavorable market conditions. Storage and PAL revenues decreased $20 million primarily as a result of the effects of unfavorable market conditions on time period price spreads. Operating expenses decreased $80 million in 2015 as compared with 2014. This decrease is primarily due to a $94 million prior year charge to write off all capitalized costs associated with the terminated Bluegrass project, a $10 million franchise tax refund related to settlement of prior tax periods and a decrease in fuel and transportation expense due to lower natural gas prices. These decreases were partially offset by higher depreciation expense of $35 |
-0.06413 | What is the growing rate of Balance on December 31 in the year where Foreign exchange translation is the most? | ABIOMED, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements—(Continued) Note 8. Goodwill and In-Process Research and Development (Continued) The Company has no accumulated impairment losses on goodwill. The Company performed a Step 0 qualitative assessment during the annual impairment review for fiscal 2015 as of October 31, 2014 and concluded that it is not more likely than not that the fair value of the Company’s single reporting unit is less than its carrying amount. Therefore, the two-step goodwill impairment test for the reporting unit was not necessary in fiscal 2015. As described in Note 3. “Acquisitions,” in July 2014, the Company acquired ECP and AIS and recorded $18.5 million of IPR&D. The estimated fair value of the IPR&D was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows from the expandable catheter pump technology were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 22.5% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions. The carrying value of the Company’s IPR&D assets and the change in the balance for the year ended March 31, 2015 is as follows:
<table><tr><td></td><td>March 31, 2015 (in $000’s)</td></tr><tr><td>Beginning balance</td><td>$—</td></tr><tr><td>Additions</td><td>18,500</td></tr><tr><td>Foreign currency translation impact</td><td>-3,789</td></tr><tr><td>Ending balance</td><td>$14,711</td></tr></table>
Note 9. Stockholders’ Equity Class B Preferred Stock The Company has authorized 1,000,000 shares of Class B Preferred Stock, $.01 par value, of which the Board of Directors can set the designation, rights and privileges. No shares of Class B Preferred Stock have been issued or are outstanding. Stock Repurchase Program In November 2012, the Company’s Board of Directors authorized a stock repurchase program for up to $15.0 million of its common stock. The Company financed the stock repurchase program with its available cash. During the year ended March 31, 2013, the Company repurchased 1,123,587 shares for $15.0 million in open market purchases at an average cost of $13.39 per share, including commission expense. The Company completed the purchase of common stock under this stock repurchase program in January 2013. Note 10. Stock Award Plans and Stock-Based Compensation Stock Award Plans The Company grants stock options and restricted stock awards to employees and others. All outstanding stock options of the Company as of March 31, 2015 were granted with an exercise price equal to the fair market value on the date of grant. Outstanding stock options, if not exercised, expire 10 years from the date of grant. The Company’s 2008 Stock Incentive Plan (the “Plan”) authorizes the grant of a variety of equity awards to the Company’s officers, directors, employees, consultants and advisers, including awards of unrestricted and restricted stock, restricted stock units, incentive and nonqualified stock options to purchase shares of common stock, performance share awards and stock appreciation rights. The Plan provides that options may only be granted at the current market value on the date of grant. Each share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares issuable under the Plan, while each share of stock issued Simultaneously, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R) (SFAS 167), which details three key changes to the consolidation model. First, former QSPEs will now be included in the scope of SFAS 167. In addition, the FASB has changed the method of analyzing which party to a variable interest entity (VIE) should consolidate the VIE (known as the primary beneficiary) to a qualitative determination of which party to the VIE has “power” combined with potentially significant benefits or losses, instead of the current quantitative risks and rewards model. The entity that has power has the ability to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Finally, the new standard requires that the primary beneficiary analysis be re-evaluated whenever circumstances change. The current rules require reconsideration of the primary beneficiary only when specified reconsideration events occur. As a result of implementing these new accounting standards, Citigroup will consolidate certain of the VIEs and former QSPEs with which it currently has involvement. An ongoing evaluation of the application of these new requirements could, with the resolution of certain uncertainties, result in the identification of additional VIEs and former QSPEs, other than those presented below, needing to be consolidated. It is not currently anticipated, however, that any such newly identified VIEs and former QSPEs would have a significant impact on Citigroup’s Consolidated Financial Statements or capital position. In accordance with SFAS 167, Citigroup employed three approaches for consolidating all of the VIEs and former QSPEs that it consolidated as of January 1, 2010. The first approach requires initially measuring the assets, liabilities, and noncontrolling interests of the VIEs and former QSPEs at their carrying values (the amounts at which the assets, liabilities, and noncontrolling interests would have been carried in the Consolidated Financial Statements, if Citigroup had always consolidated these VIEs and former QSPEs). The second approach is to use the unpaid principal amounts, where using carrying values is not practicable. The third approach is to elect the fair value option, in which all of the financial assets and liabilities of certain designated VIEs and former QSPEs would be recorded at fair value upon adoption of SFAS 167 and continue to be marked to market thereafter, with changes in fair value reported in earnings. Citigroup consolidated all required VIEs and former QSPEs as of January 1, 2010 at carrying values or unpaid principal amounts, except for certain private label residential mortgage and mutual fund deferred sales commissions VIEs, for which the fair value option was elected. The following tables present the pro forma impact of adopting these new accounting standards applying these approaches. The pro forma impact of these changes on incremental GAAP assets and resulting risk-weighted assets for those VIEs and former QSPEs that were consolidated or deconsolidated for accounting purposes as of January 1, 2010 (based on financial information as of December 31, 2009), reflecting Citigroup’s present understanding of the new accounting requirements and immediate implementation of the recently issued final risk-based capital rules regarding SFAS 166 and SFAS 167, was as follows:
<table><tr><td></td><td colspan="2">Incremental</td><td></td></tr><tr><td>In billions of dollars</td><td>GAAP assets</td><td>Risk- weighted assets</td><td>-1</td></tr><tr><td>Impact of consolidation</td><td></td><td></td><td></td></tr><tr><td>Credit cards</td><td>$86.3</td><td>$0.8</td><td></td></tr><tr><td>Commercial paper conduits</td><td>28.3</td><td>13.0</td><td></td></tr><tr><td>Student loans</td><td>13.6</td><td>3.7</td><td></td></tr><tr><td>Private label consumer mortgages</td><td>4.4</td><td>1.3</td><td></td></tr><tr><td>Municipal tender option bonds</td><td>0.6</td><td>0.1</td><td></td></tr><tr><td>Collateralized loan obligations</td><td>0.5</td><td>0.5</td><td></td></tr><tr><td>Mutual fund deferred sales commissions</td><td>0.5</td><td>0.5</td><td></td></tr><tr><td>Subtotal</td><td>$134.2</td><td>$19.9</td><td></td></tr><tr><td>Impact of deconsolidation</td><td></td><td></td><td></td></tr><tr><td>Collateralized debt obligations-2</td><td>$1.9</td><td>$3.6</td><td></td></tr><tr><td>Equity-linked notes-3</td><td>1.2</td><td>0.5</td><td></td></tr><tr><td>Total</td><td>$137.3</td><td>$24.0</td><td></td></tr></table>
(1) Citigroup undertook certain actions during the first and second quarters of 2009 in support of its off-balance-sheet credit card securitization vehicles. As a result of these actions, Citigroup included approximately $82 billion of incremental risk-weighted assets in its risk-based capital ratios as of March 31, 2009 and an additional approximate $900 million as of June 30, 2009. See Note 23 to the Consolidated Financial Statements. (2) The implementation of SFAS 167 will result in the deconsolidation of certain synthetic and cash collateralized debt obligation (CDO) VIEs that were previously consolidated under the requirements of ASC 810 (FIN 46(R)). Upon deconsolidation of these synthetic CDOs, Citigroup’s Consolidated Balance Sheet will reflect the recognition of current receivables and payables related to purchased and written credit default swaps entered into with these VIEs, which had previously been eliminated in consolidation. The deconsolidation of certain cash CDOs will have a minimal impact on GAAP assets, but will cause a sizable increase in risk-weighted assets. The impact on risk-weighted assets results from replacing, in Citigroup’s trading account, largely investment grade securities owned by these VIEs when consolidated, with Citigroup’s holdings of non-investment grade or unrated securities issued by these VIEs when deconsolidated. (3) Certain equity-linked note client intermediation transactions that had previously been consolidated under the requirements of ASC 810 (FIN 46 (R)) will be deconsolidated with the implementation of SFAS 167. Upon deconsolidation, Citigroup’s Consolidated Balance Sheet will reflect both the equitylinked notes issued by the VIEs and held by Citigroup as trading assets, as well as related trading liabilities in the form of prepaid equity derivatives. These trading assets and trading liabilities were formerly eliminated in consolidation. 19. GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in Goodwill during 2008 and 2009 were as follows:
<table><tr><td>Balance at December 31, 2007</td><td>$41,053</td></tr><tr><td>Sale of German retail bank</td><td>$-1,047</td></tr><tr><td>Sale of CitiCapital</td><td>-221</td></tr><tr><td>Sale of Citigroup Global Services Limited</td><td>-85</td></tr><tr><td>Purchase accounting adjustments—BISYS</td><td>-184</td></tr><tr><td>Purchase of the remaining shares of Nikko Cordial—net of purchase accounting adjustments</td><td>287</td></tr><tr><td>Acquisition of Legg Mason Private Portfolio Group</td><td>98</td></tr><tr><td>Foreign exchange translation</td><td>-3,116</td></tr><tr><td>Impairment of goodwill</td><td>-9,568</td></tr><tr><td>Smaller acquisitions, purchase accounting adjustments and other</td><td>-85</td></tr><tr><td>Balance at December 31, 2008</td><td>$27,132</td></tr><tr><td>Sale of Smith Barney</td><td>$-1,146</td></tr><tr><td>Sale of Nikko Cordial Securities</td><td>-558</td></tr><tr><td>Sale of Nikko Asset Management</td><td>-433</td></tr><tr><td>Foreign exchange translation</td><td>547</td></tr><tr><td>Smaller acquisitions/divestitures, purchase accounting adjustments and other</td><td>-150</td></tr><tr><td>Balance at December 31, 2009</td><td>$25,392</td></tr></table>
The changes in Goodwill by segment during 2008 and 2009 were as follows:
<table><tr><td>In millions of dollars</td><td>Regional Consumer Banking</td><td>Institutional Clients Group</td><td>Citi Holdings</td><td>Corporate/ Other</td><td>Total</td></tr><tr><td>Balance at December 31, 2007-1</td><td>$19,751</td><td>$9,288</td><td>$12,014</td><td>$—</td><td>$41,053</td></tr><tr><td>Goodwill acquired during 2008</td><td>$88</td><td>$108</td><td>$1,492</td><td>$—</td><td>$1,688</td></tr><tr><td>Goodwill disposed of during 2008</td><td>—</td><td>—</td><td>-1,378</td><td>—</td><td>-1,378</td></tr><tr><td>Goodwill impaired during 2008</td><td>-6,547</td><td>—</td><td>-3,021</td><td>—</td><td>-9,568</td></tr><tr><td>Other-1</td><td>-4,006</td><td>775</td><td>-1,432</td><td>—</td><td>-4,663</td></tr><tr><td>Balance at December 31, 2008-1</td><td>$9,286</td><td>$10,171</td><td>$7,675</td><td>$—</td><td>$27,132</td></tr><tr><td>Goodwill acquired during 2009</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr><tr><td>Goodwill disposed of during 2009</td><td>—</td><td>-39</td><td>-2,248</td><td>—</td><td>-2,287</td></tr><tr><td>Other-1</td><td>307</td><td>225</td><td>15</td><td>—</td><td>547</td></tr><tr><td>Balance at December 31, 2009</td><td>$9,593</td><td>$10,357</td><td>$5,442</td><td>$—</td><td>$25,392</td></tr></table>
(1) Other changes in Goodwill primarily reflect foreign exchange effects on non-dollar-denominated goodwill, as well as purchase accounting adjustments. Goodwill impairment testing is performed at a level below the business segments (referred to as a reporting unit). The changes in the organizational structure in 2009 resulted in the creation of new reporting segments. As a result, commencing with the second quarter of 2009, the Company has identified new reporting units as required under ASC 350, Intangibles— Goodwill and Other. Goodwill affected by the reorganization has been reassigned from 10 reporting units to nine, using a fair value approach. During 2009, goodwill was allocated to disposals and tested for impairment under the new reporting units. The Company performed goodwill impairment testing for all reporting units as of April 1, 2009 and July 1, 2009. Additionally, the Company performed an interim goodwill impairment test for the Local Consumer Lending—Cards reporting unit as of November 30, 2009. No goodwill was written off due to impairment in 2009. During 2008, the share prices of financial stocks continued to be very volatile and were under considerable pressure in sustained turbulent markets. In this environment, Citigroup’s market capitalization remained below book value for most of the period and the Company performed goodwill impairment testing for all reporting units as of February 28, 2008, July 1, 2008 and December 31, 2008. The results of the first step of the impairment test showed no indication of impairment in any of the reporting units at any of the periods except December 31, 2008 and, accordingly, the Company did not perform the second step of the impairment test, except for the test performed as of December 31, 2008. As of December 31, 2008, there was an indication of impairment in the North America Consumer Banking, Latin America Consumer Banking, and Local Consumer Lending—Other reporting units and, accordingly, the second step of testing was performed on these reporting units. |
-28,872 | What was the total amount of the Additions to customer relationship and acquisition costs in the sections where Cash Flows from Operating Activities greater than 0? | FHLB Advances and Other Borrowings FHLB Advances—The Company had $0.7 billion in floating-rate and $0.2 billion in fixed-rate FHLB advances at both December 31, 2013 and 2012. The floating-rate advances adjust quarterly based on the LIBOR. During the year ended December 31, 2012, $650.0 million of fixed-rate FHLB advances were converted to floating-rate for a total cost of approximately $128 million which was capitalized and will be amortized over the remaining maturities using the effective interest method. In addition, during the year ended December 31, 2012, the Company paid down in advance of maturity $1.0 billion of its FHLB advances and recorded $69.1 million in losses on the early extinguishment. This loss was recorded in the gains (losses) on early extinguishment of debt line item in the consolidated statement of income (loss). The Company did not have any similar transactions for the years ended December 31, 2013 and 2011. As a condition of its membership in the FHLB Atlanta, the Company is required to maintain a FHLB stock investment currently equal to the lesser of: a percentage of 0.12% of total Bank assets; or a dollar cap amount of $20 million. Additionally, the Bank must maintain an Activity Based Stock investment which is currently equal to 4.5% of the Bank’s outstanding advances at the time of borrowing. The Company had an investment in FHLB stock of $61.4 million and $67.4 million at December 31, 2013 and 2012, respectively. The Company must also maintain qualified collateral as a percent of its advances, which varies based on the collateral type, and is further adjusted by the outcome of the most recent annual collateral audit and by FHLB’s internal ranking of the Bank’s creditworthiness. These advances are secured by a pool of mortgage loans and mortgage-backed securities. At December 31, 2013 and 2012, the Company pledged loans with a lendable value of $3.9 billion and $4.8 billion, respectively, of the one- to four-family and home equity loans as collateral in support of both its advances and unused borrowing lines. Other Borrowings—Prior to 2008, ETBH raised capital through the formation of trusts, which sold trust preferred securities in the capital markets. The capital securities must be redeemed in whole at the due date, which is generally 30 years after issuance. Each trust issued Floating Rate Cumulative Preferred Securities (“trust preferred securities”), at par with a liquidation amount of $1,000 per capital security. The trusts used the proceeds from the sale of issuances to purchase Floating Rate Junior Subordinated Debentures (“subordinated debentures”) issued by ETBH, which guarantees the trust obligations and contributed proceeds from the sale of its subordinated debentures to E*TRADE Bank in the form of a capital contribution. The most recent issuance of trust preferred securities occurred in 2007. The face values of outstanding trusts at December 31, 2013 are shown below (dollars in thousands):
<table><tr><td>Trusts</td><td>Face Value</td><td>Maturity Date</td><td>Annual Interest Rate</td></tr><tr><td>ETBH Capital Trust II</td><td>$5,000</td><td>2031</td><td>10.25%</td></tr><tr><td>ETBH Capital Trust I</td><td>20,000</td><td>2031</td><td>3.75% above 6-month LIBOR</td></tr><tr><td>ETBH Capital Trust V, VI, VIII</td><td>51,000</td><td>2032</td><td>3.25%-3.65% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust VII, IX—XII</td><td>65,000</td><td>2033</td><td>3.00%-3.30% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XIII—XVIII, XX</td><td>77,000</td><td>2034</td><td>2.45%-2.90% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XIX, XXI, XXII</td><td>60,000</td><td>2035</td><td>2.20%-2.40% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XXIII—XXIV</td><td>45,000</td><td>2036</td><td>2.10% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XXV—XXX</td><td>110,000</td><td>2037</td><td>1.90%-2.00% above 3-month LIBOR</td></tr><tr><td>Total</td><td>$433,000</td><td></td><td></td></tr></table>
Principal Financial Group, Inc. Notes to Consolidated Financial Statements — (continued) 6. Derivative Financial Instruments — (continued) The fair value of our derivative instruments classified as assets and liabilities was as follows:
<table><tr><td> </td><td colspan="2"> Derivative assets -1</td><td colspan="2"> Derivative liabilities -2</td></tr><tr><td> </td><td> December 31, 2009</td><td> December 31, 2008</td><td> December 31, 2009</td><td> December 31, 2008</td></tr><tr><td> </td><td colspan="4"><i>(in millions)</i> </td></tr><tr><td> Derivatives designated as hedging instruments</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate contracts</td><td>$81.5</td><td>$250.8</td><td>$309.1</td><td>$819.2</td></tr><tr><td>Foreign exchange contracts</td><td>444.4</td><td>410.8</td><td>240.6</td><td>300.4</td></tr><tr><td>Total derivatives designated as hedging instruments</td><td>$525.9</td><td>$661.6</td><td>$549.7</td><td>$1,119.6</td></tr><tr><td> Derivatives not designated as hedging instruments</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate contracts</td><td>$433.5</td><td>$802.1</td><td>$336.8</td><td>$621.5</td></tr><tr><td>Foreign exchange contracts</td><td>107.5</td><td>121.3</td><td>75.0</td><td>155.1</td></tr><tr><td>Equity contracts</td><td>149.8</td><td>222.1</td><td>—</td><td>—</td></tr><tr><td>Credit contracts</td><td>15.5</td><td>70.7</td><td>84.0</td><td>227.2</td></tr><tr><td>Other contracts</td><td>—</td><td>—</td><td>128.1</td><td>185.2</td></tr><tr><td>Total derivatives not designated as hedging instruments</td><td>$706.3</td><td>$1,216.2</td><td>$623.9</td><td>$1,189.0</td></tr><tr><td>Total derivative instruments</td><td>$1,232.2</td><td>$1,877.8</td><td>$1,173.6</td><td>$2,308.6</td></tr></table>
(1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of $23.6 million and $60.2 million as of December 31, 2009, and December 31, 2008, respectively, are reported with contractholder funds on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. The majority of our credit derivative contracts sold reference a single name or reference security (referred to as ‘‘single name credit default swaps’’). The remainder of our credit derivatives reference either a basket or index of securities. These instruments are either referenced in an over-the-counter credit derivative transaction, or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also have purchased credit protection with identical underlyings to certain of our sold protection transactions. The effect of this purchased protection would reduce our total maximum future payments by $47.0 million and $60.8 million as of December 31, 2009, and December 31, 2008, respectively. These credit derivative transactions had a net fair value of $2.4 million and $21.2 million as of December 31, 2009, and December 31, 2008, respectively. Our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. We purchased certain investment structures with embedded credit features that are fully consolidated into our financial statements. This consolidation results in recognition of the underlying credit derivatives and collateral within the structure, typically high quality fixed maturity securities that are owned by a special purpose vehicle. These credit derivatives reference a single name or several names in a basket structure. In the event of default, the collateral within the structure would typically be liquidated to pay the claims of the credit derivative counterparty. Qorvo, Inc. and Subsidiaries Annual Report on Form 10-K 2019 Notes to Consolidated Financial Statements income to substantially offset the losses earned in prior years. The balance of the cumulative pre-tax book loss was expected to be offset by income in the first half of fiscal 2018 as production at the assembly and test facility continued to increase as the Company reduced its dependence on outside assembly and test subcontractors. After evaluating the positive and negative evidence, management determined that it was more likely than not that the deferred tax assets of this China manufacturing subsidiary would be realized and a valuation allowance would not be provided as of the end of fiscal 2017. As of March 30, 2019, the Company had federal loss carryovers of approximately $39.6 million that expire in fiscal years 2020 to 2030 if unused and state losses of approximately $105.2 million that expire in fiscal years 2020 to 2039 if unused. Federal research credits of $127.6 million, and state credits of $64.9 million may expire in fiscal years 2020 to 2039 and 2020 to 2037, respectively. Foreign losses in the Netherlands of approximately $5.1 million expire in fiscal years 2020 to 2027. Included in the amounts above may be certain net operating losses and other tax attribute assets acquired in conjunction with acquisitions in the current and prior years. The utilization of acquired domestic assets is subject to certain annual limitations as required under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and similar state income tax provisions. The Company has continued to expand its operations and increase its investments in numerous international jurisdictions. These activities expose the Company to taxation in multiple foreign jurisdictions. It is management’s opinion that current and future undistributed foreign earnings will be permanently reinvested, except for the earnings of Qorvo International Pte. Ltd. , our operating subsidiary in Singapore. No provision for U. S. federal income, state income or foreign local withholding taxes has been made with respect to the undistributed earnings of any other foreign subsidiary. It is not practical to estimate the additional tax that would be incurred, if any, if the permanently reinvested earnings were repatriated. The Company has foreign subsidiaries with tax holiday agreements in Singapore and Costa Rica. These tax holiday agreements have varying rates and expire in December 2021 and March 2024, respectively. Incentives from these countries are subject to the Company meeting certain employment and investment requirements. The Company does not expect that the Singapore legislation enacted in February 2017, which will exclude from the Company’s existing Development and Expansion Incentive grant the benefit of the reduced tax rate for intellectual property income earned after June 30, 2021, will have an impact on the Company. Income tax expense decreased by $34.6 million (an impact of approximately $0.28 and $0.27 per basic and diluted share, respectively) in fiscal 2019 and $7.9 million (an impact of approximately $0.06 per basic and diluted share) in fiscal 2018 as a result of these agreements. The Company’s gross unrecognized tax benefits totaled $103.2 million as of March 30, 2019, $122.8 million as of March 31, 2018, and $90.6 million as of April 1, 2017. Of these amounts, $99.1 million (net of federal benefit of state taxes), $118.7 million (net of federal benefit of state taxes) and $84.4 million (net of federal benefit of state taxes) as of March 30, 2019, March 31, 2018, and April 1, 2017, respectively, represent the amounts of unrecognized tax benefits that, if recognized, would impact the effective tax rate in each of the fiscal years. The Company’s gross unrecognized tax benefits decreased from $122.8 million as of March 31, 2018 to $103.2 million as of March 30, 2019, primarily due to lapses of statutes of limitations, the conclusion of examinations by U. S. and Singapore tax authorities, the finalization of Regulations related to the Transitional Repatriation Tax, and finalization of the provisional estimates related to the impact of the Tax Act. A reconciliation of fiscal 2017 through fiscal 2019 beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
<table><tr><td></td><td colspan="3">Fiscal Year</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Beginning balance</td><td>$122,823</td><td>$90,615</td><td>$69,052</td></tr><tr><td>Additions based on positions related to current year</td><td>7,193</td><td>26,431</td><td>20,036</td></tr><tr><td>Additions for tax positions in prior years</td><td>8,369</td><td>5,844</td><td>1,878</td></tr><tr><td>Reductions for tax positions in prior years</td><td>-24,932</td><td>-67</td><td>-29</td></tr><tr><td>Expiration of statute of limitations</td><td>-6,972</td><td>—</td><td>-322</td></tr><tr><td>Settlements</td><td>-3,303</td><td>—</td><td>—</td></tr><tr><td>Ending balance</td><td>$103,178</td><td>$122,823</td><td>$90,615</td></tr></table>
It is the Company’s policy to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During fiscal years 2019, 2018 and 2017, the Company recognized IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2008 (In thousands, except share and per share data) 10. Commitments and Contingencies a. Leases Most of our leased facilities are leased under various operating leases that typically have initial lease terms of ten to fifteen years. A majority of these leases have renewal options with one or more five year options to extend and may have fixed or Consumer Price Index escalation clauses. We also lease equipment under operating leases, primarily computers which have an average lease life of three years. Vehicles and office equipment are also leased and have remaining lease lives ranging from one to seven years. Due to the declining economic environment in 2008, the current fair market values of vans, trucks and mobile shredding units within our vehicle fleet portfolio, which we lease, have declined. As a result, certain vehicle leases that previously met the requirements to be considered operating leases were classified as capital leases upon renewal. The 2008 impact of this change on our consolidated balance sheet as of December 31, 2008 was an increase in property, plant and equipment and debt of $58,517 and had no impact on 2008 operating results. Future operating results will have lower vehicle rent expense (a component of transportation costs within cost of sales), offset by an increased amount of combined depreciation and interest expense in future periods. Total rent expense (including common area maintenance charges) under all of our operating leases was $207,760, $240,833 and $280,360 (including $20,828 associated with vehicle leases which became capital leases in 2008) for the years ended December 31, 2006, 2007 and 2008, respectively. Included in total rent expense was sublease income of $3,740, $4,973 and $5,341 for the years ended December 31, 2006, 2007 and 2008, respectively. Estimated minimum future lease payments (excluding common area maintenance charges) include payments for certain renewal periods at our option because failure to renew results in an economic disincentive due to significant capital expenditure costs (e. g. , racking), thereby making it reasonably assured that we will renew the lease. Such payments in effect at December 31, are as follows:
<table><tr><td> Year</td><td> Operating Lease Payment</td><td> Sublease Income</td><td>Capital Leases</td></tr><tr><td>2009</td><td>$225,290</td><td>$3,341</td><td>$28,608</td></tr><tr><td>2010</td><td>201,315</td><td>1,847</td><td>27,146</td></tr><tr><td>2011</td><td>191,588</td><td>1,223</td><td>19,116</td></tr><tr><td>2012</td><td>186,600</td><td>1,071</td><td>25,489</td></tr><tr><td>2013</td><td>181,080</td><td>988</td><td>9,419</td></tr><tr><td>Thereafter</td><td>2,109,086</td><td>3,539</td><td>95,445</td></tr><tr><td>Total minimum lease payments</td><td>$3,094,959</td><td>$12,009</td><td>$205,223</td></tr><tr><td>Less amounts representing interest</td><td></td><td></td><td>-73,536</td></tr><tr><td>Present value of capital lease obligations</td><td></td><td></td><td>$131,687</td></tr></table>
We have guaranteed the residual value of certain vehicle operating leases to which we are a party. The maximum net residual value guarantee obligation for these vehicles as of December 31, 2008 was $30,415. Such amount does not take into consideration the recovery or resale value associated with these vehicles. We believe that it is not reasonably likely that we will be required to perform under IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2012 (In thousands, except share and per share data) 5. Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued
<table><tr><td></td><td colspan="6">Year Ended December 31, 2012</td></tr><tr><td></td><td>Parent</td><td>Guarantors</td><td>Canada Company</td><td>Non- Guarantors</td><td>Eliminations</td><td>Consolidated</td></tr><tr><td>Cash Flows from Operating Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash Flows from Operating Activities-Continuing Operations</td><td>$-195,478</td><td>$496,542</td><td>$48,037</td><td>$94,551</td><td>$—</td><td>$443,652</td></tr><tr><td>Cash Flows from Operating Activities-Discontinued Operations</td><td>—</td><td>-8,814</td><td>—</td><td>-2,102</td><td>—</td><td>-10,916</td></tr><tr><td>Cash Flows from Operating Activities</td><td>-195,478</td><td>487,728</td><td>48,037</td><td>92,449</td><td>—</td><td>432,736</td></tr><tr><td>Cash Flows from Investing Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Capital expenditures</td><td>—</td><td>-134,852</td><td>-10,829</td><td>-95,002</td><td>—</td><td>-240,683</td></tr><tr><td>Cash paid for acquisitions, net of cash acquired</td><td>—</td><td>-28,126</td><td>—</td><td>-97,008</td><td>—</td><td>-125,134</td></tr><tr><td>Intercompany loans to subsidiaries</td><td>88,376</td><td>-110,142</td><td>—</td><td>—</td><td>21,766</td><td>—</td></tr><tr><td>Investment in subsidiaries</td><td>-37,572</td><td>-37,572</td><td>—</td><td>—</td><td>75,144</td><td>—</td></tr><tr><td>Investment in restricted cash</td><td>1,498</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1,498</td></tr><tr><td>Additions to customer relationship and acquisition costs</td><td>—</td><td>-23,543</td><td>-2,132</td><td>-3,197</td><td>—</td><td>-28,872</td></tr><tr><td>Investment in joint ventures</td><td>-2,330</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-2,330</td></tr><tr><td>Proceeds from sales of property and equipment and other, net</td><td>—</td><td>-1,739</td><td>5</td><td>3,191</td><td>—</td><td>1,457</td></tr><tr><td>Cash Flows from Investing Activities-Continuing Operations</td><td>49,972</td><td>-335,974</td><td>-12,956</td><td>-192,016</td><td>96,910</td><td>-394,064</td></tr><tr><td>Cash Flows from Investing Activities-Discontinued Operations</td><td>—</td><td>-1,982</td><td>—</td><td>-4,154</td><td>—</td><td>-6,136</td></tr><tr><td>Cash Flows from Investing Activities</td><td>49,972</td><td>-337,956</td><td>-12,956</td><td>-196,170</td><td>96,910</td><td>-400,200</td></tr><tr><td>Cash Flows from Financing Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Repayment of revolving credit and term loan facilities and other debt</td><td>—</td><td>-2,774,070</td><td>-3,069</td><td>-67,554</td><td>—</td><td>-2,844,693</td></tr><tr><td>Proceeds from revolving credit and term loan facilities and other debt</td><td>—</td><td>2,680,107</td><td>—</td><td>51,078</td><td>—</td><td>2,731,185</td></tr><tr><td>Early retirement of senior subordinated notes</td><td>-525,834</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-525,834</td></tr><tr><td>Net proceeds from sales of senior subordinated notes</td><td>985,000</td><td>—</td><td>—</td><td>—</td><td>—</td><td>985,000</td></tr><tr><td>Debt financing (repayment to) and equity contribution from (distribution to) noncontrolling interests, net</td><td>—</td><td>—</td><td>—</td><td>480</td><td>—</td><td>480</td></tr><tr><td>Intercompany loans from parent</td><td>—</td><td>-89,878</td><td>714</td><td>110,930</td><td>-21,766</td><td>—</td></tr><tr><td>Equity contribution from parent</td><td>—</td><td>37,572</td><td>—</td><td>37,572</td><td>-75,144</td><td>—</td></tr><tr><td>Stock repurchases</td><td>-38,052</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-38,052</td></tr><tr><td>Parent cash dividends</td><td>-318,845</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-318,845</td></tr><tr><td>Proceeds from exercise of stock options and employee stock purchase plan</td><td>40,244</td><td>—</td><td>—</td><td>—</td><td>—</td><td>40,244</td></tr><tr><td>Excess tax benefits from stock-based compensation</td><td>1,045</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1,045</td></tr><tr><td>Payment of debt finacing costs</td><td>-1,480</td><td>-781</td><td>—</td><td>—</td><td>—</td><td>-2,261</td></tr><tr><td>Cash Flows from Financing Activities-Continuing Operations</td><td>142,078</td><td>-147,050</td><td>-2,355</td><td>132,506</td><td>-96,910</td><td>28,269</td></tr><tr><td>Cash Flows from Financing Activities-Discontinued Operations</td><td>—</td><td>—</td><td>—</td><td>-39</td><td>—</td><td>-39</td></tr><tr><td>Cash Flows from Financing Activities</td><td>142,078</td><td>-147,050</td><td>-2,355</td><td>132,467</td><td>-96,910</td><td>28,230</td></tr><tr><td>Effect of exchange rates on cash and cash equivalents</td><td>—</td><td>—</td><td>1,867</td><td>937</td><td>—</td><td>2,804</td></tr><tr><td>(Decrease) Increase in cash and cash equivalents</td><td>-3,428</td><td>2,722</td><td>34,593</td><td>29,683</td><td>—</td><td>63,570</td></tr><tr><td>Cash and cash equivalents, beginning of period</td><td>3,428</td><td>10,750</td><td>68,907</td><td>96,760</td><td>—</td><td>179,845</td></tr><tr><td>Cash and cash equivalents, end of period</td><td>$—</td><td>$13,472</td><td>$103,500</td><td>$126,443</td><td>$—</td><td>$243,415</td></tr></table>
IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2014 (In thousands, except share and per share data) 2. Summary of Significant Accounting Policies (Continued) Stock Options Under our various stock option plans, options are generally granted with exercise prices equal to the market price of the stock on the date of grant; however, in certain limited instances, options are granted at prices greater than the market price of the stock on the date of grant. The majority of our options become exercisable ratably over a period of five years from the date of grant and generally have a contractual life of ten years from the date of grant, unless the holder’s employment is terminated sooner. Certain of the options we issue become exercisable ratably over a period of ten years from the date of grant and have a contractual life of 12 years from the date of grant, unless the holder’s employment is terminated sooner. As of December 31, 2014, ten-year vesting options represented 8.0% of total outstanding options. Certain of the options we issue become exercisable ratably over a period of three years from the date of grant and have a contractual life of ten years from the date of grant, unless the holder’s employment is terminated sooner. As of December 31, 2014, three-year vesting options represented 34.3% of total outstanding options. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting. Options granted to our non-employee directors generally become exercisable one year from the date of grant. Our equity compensation plans generally provide that any unvested options and other awards granted thereunder shall vest immediately if an employee is terminated by the Company, or terminates his or her own employment for good reason (as defined in each plan), in connection with a vesting change in control (as defined in each plan). On January 20, 2015, our stockholders approved the adoption of the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (the ‘‘2014 Plan’’). Under the 2014 Plan, the total amount of shares of common stock reserved and available for issuance pursuant to awards granted under the 2014 Plan is 7,750,000. The 2014 Plan permits the Company to continue to grant awards through January 20, 2025. A total of 43,253,839 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans, including the 2014 Plan. The number of shares available for grant under our various stock incentive plans, not including the 2014 Plan, at December 31, 2014 was 4,581,754. The weighted average fair value of options granted in 2012, 2013 and 2014 was $7.00, $7.69 and $5.70 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. |
0.11247 | what is the percentage change in the balance of asset allocation from 2016 to 2017? | Long-term product offerings include alpha-seeking active and index strategies. Our alpha-seeking active strategies seek to earn attractive returns in excess of a market benchmark or performance hurdle while maintaining an appropriate risk profile, and leverage fundamental research and quantitative models to drive portfolio construction. In contrast, index strategies seek to closely track the returns of a corresponding index, generally by investing in substantially the same underlying securities within the index or in a subset of those securities selected to approximate a similar risk and return profile of the index. Index strategies include both our non-ETF index products and iShares ETFs. Although many clients use both alpha-seeking active and index strategies, the application of these strategies may differ. For example, clients may use index products to gain exposure to a market or asset class, or may use a combination of index strategies to target active returns. In addition, institutional non-ETF index assignments tend to be very large (multi-billion dollars) and typically reflect low fee rates. Net flows in institutional index products generally have a small impact on BlackRock’s revenues and earnings. Equity Year-end 2017 equity AUM totaled $3.372 trillion, reflecting net inflows of $130.1 billion. Net inflows included $174.4 billion into iShares ETFs, driven by net inflows into Core funds and broad developed and emerging market equities, partially offset by non-ETF index and active net outflows of $25.7 billion and $18.5 billion, respectively. BlackRock’s effective fee rates fluctuate due to changes in AUM mix. Approximately half of BlackRock’s equity AUM is tied to international markets, including emerging markets, which tend to have higher fee rates than U. S. equity strategies. Accordingly, fluctuations in international equity markets, which may not consistently move in tandem with U. S. markets, have a greater impact on BlackRock’s equity revenues and effective fee rate. Fixed Income Fixed income AUM ended 2017 at $1.855 trillion, reflecting net inflows of $178.8 billion. In 2017, active net inflows of $21.5 billion were diversified across fixed income offerings, and included strong inflows into municipal, unconstrained and total return bond funds. iShares ETFs net inflows of $67.5 billion were led by flows into Core, corporate and treasury bond funds. Non-ETF index net inflows of $89.8 billion were driven by demand for liability-driven investment solutions. Multi-Asset BlackRock’s multi-asset team manages a variety of balanced funds and bespoke mandates for a diversified client base that leverages our broad investment expertise in global equities, bonds, currencies and commodities, and our extensive risk management capabilities. Investment solutions might include a combination of long-only portfolios and alternative investments as well as tactical asset allocation overlays. Component changes in multi-asset AUM for 2017 are presented below.
<table><tr><td>(in millions)</td><td>December 31,2016</td><td>Net inflows (outflows)</td><td>Marketchange</td><td>FXimpact</td><td>December 31,2017</td></tr><tr><td>Asset allocation and balanced</td><td>$176,675</td><td>$-2,502</td><td>$17,387</td><td>$4,985</td><td>$196,545</td></tr><tr><td>Target date/risk</td><td>149,432</td><td>23,925</td><td>24,532</td><td>1,577</td><td>199,466</td></tr><tr><td>Fiduciary</td><td>68,395</td><td>-1,047</td><td>7,522</td><td>8,819</td><td>83,689</td></tr><tr><td>FutureAdvisor<sup>-1</sup></td><td>505</td><td>-46</td><td>119</td><td>—</td><td>578</td></tr><tr><td>Total</td><td>$395,007</td><td>$20,330</td><td>$49,560</td><td>$15,381</td><td>$480,278</td></tr></table>
(1) FutureAdvisor amounts do not include AUM held in iShares ETFs. Multi-asset net inflows reflected ongoing institutional demand for our solutions-based advice with $18.9 billion of net inflows coming from institutional clients. Defined contribution plans of institutional clients remained a significant driver of flows, and contributed $20.8 billion to institutional multi-asset net inflows in 2017, primarily into target date and target risk product offerings. Retail net inflows of $1.1 billion reflected demand for our Multi-Asset Income fund family, which raised $5.8 billion in 2017. The Company’s multi-asset strategies include the following: ? Asset allocation and balanced products represented 41% of multi-asset AUM at year-end. These strategies combine equity, fixed income and alternative components for investors seeking a tailored solution relative to a specific benchmark and within a risk budget. In certain cases, these strategies seek to minimize downside risk through diversification, derivatives strategies and tactical asset allocation decisions. Flagship products in this category include our Global Allocation and Multi-Asset Income fund families. ? Target date and target risk products grew 16% organically in 2017, with net inflows of $23.9 billion. Institutional investors represented 93% of target date and target risk AUM, with defined contribution plans accounting for 87% of AUM. Flows were driven by defined contribution investments in our LifePath offerings. LifePath products utilize a proprietary active asset allocation overlay model that seeks to balance risk and return over an investment horizon based on the investor’s expected retirement timing. Underlying investments are primarily index products. ? Fiduciary management services are complex mandates in which pension plan sponsors or endowments and foundations retain BlackRock to assume responsibility for some or all aspects of investment management. These customized services require strong partnership with the clients’ investment staff and trustees in order to tailor investment strategies to meet client-specific risk budgets and return objectives. not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at December 31, 2017. The 2017 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities. At December 31, 2017, the Company had no amount outstanding under the 2017 credit facility Commercial Paper Program. The Company can issue unsecured commercial paper notes (the “CP Notes”) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4.0 billion. The commercial paper program is currently supported by the 2017 credit facility. At December 31, 2017, BlackRock had no CP Notes outstanding Long-Term Borrowings The carrying value of long-term borrowings at December 31, 2017 included the following:
<table><tr><td>(in millions)</td><td>Maturity Amount</td><td>Carrying Value</td><td>Maturity</td></tr><tr><td>5.00% Notes</td><td>$1,000</td><td>$999</td><td>December 2019</td></tr><tr><td>4.25% Notes</td><td>750</td><td>747</td><td>May 2021</td></tr><tr><td>3.375% Notes</td><td>750</td><td>746</td><td>June 2022</td></tr><tr><td>3.50% Notes</td><td>1,000</td><td>994</td><td>March 2024</td></tr><tr><td>1.25% Notes<sup>-1</sup></td><td>841</td><td>835</td><td>May 2025</td></tr><tr><td>3.20% Notes</td><td>700</td><td>693</td><td>March 2027</td></tr><tr><td>Total Long-term Borrowings</td><td>$5,041</td><td>$5,014</td><td></td></tr></table>
(1) The carrying value of the 1.25% Notes estimated using foreign exchange rate as of December 31, 2017. For more information on Company’s borrowings, see Note 12, Borrowings, in the notes to the consolidated financial statements contained in Part II, Item 8 of this filing. Contractual Obligations, Commitments and Contingencies The following table sets forth contractual obligations, commitments and contingencies by year of payment at December 31, 2017:
<table><tr><td>(in millions)</td><td>2018</td><td>2019</td><td>2020</td><td>2021</td><td>2022</td><td>Thereafter<sup>-1</sup></td><td>Total</td></tr><tr><td>Contractual obligations and commitments<sup>-1</sup>:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Long-term borrowings<sup>-2</sup>:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Principal</td><td>$—</td><td>$1,000</td><td>$—</td><td>$750</td><td>$750</td><td>$2,541</td><td>$5,041</td></tr><tr><td>Interest</td><td>175</td><td>175</td><td>125</td><td>109</td><td>81</td><td>185</td><td>850</td></tr><tr><td>Operating leases</td><td>141</td><td>132</td><td>126</td><td>118</td><td>109</td><td>1,580</td><td>2,206</td></tr><tr><td>Purchase obligations</td><td>128</td><td>101</td><td>29</td><td>22</td><td>19</td><td>28</td><td>327</td></tr><tr><td>Investment commitments</td><td>298</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>298</td></tr><tr><td>Total contractual obligations and commitments</td><td>742</td><td>1,408</td><td>280</td><td>999</td><td>959</td><td>4,334</td><td>8,722</td></tr><tr><td>Contingent obligations:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Contingent payments related to business acquisitions<sup>-3</sup></td><td>33</td><td>179</td><td>39</td><td>34</td><td>—</td><td>—</td><td>285</td></tr><tr><td>Total contractual obligations, commitments andcontingent obligations<sup>-4</sup></td><td>$775</td><td>$1,587</td><td>$319</td><td>$1,033</td><td>$959</td><td>$4,334</td><td>$9,007</td></tr></table>
(1) Amounts do not include $350 million of cash payment consideration and contingent consideration related to the Company’s agreement to acquire the asset management business of Citibanamex. (2) The amount of principal and interest payments for the 2025 Notes (issued in Euros) represents the expected payment amounts using foreign exchange rates as of December 31, 2017. (3) The amount of contingent payments reflected for any year represents the expected payments using foreign currency exchange rates as of December 31, 2017. The fair value of the remaining aggregate contingent payments at December 31, 2017 totaled $236 million and is included in other liabilities on the consolidated statements of financial condition. (4) At December 31, 2017, the Company had approximately $365 million of net unrecognized tax benefits. Due to the uncertainty of timing and amounts that will ultimately be paid, this amount has been excluded from the table above. Operating Leases. The Company leases its primary office locations under agreements that expire on varying dates through 2043. In connection with certain lease agreements, the Company is responsible for escalation payments. The contractual obligations table above includes only guaranteed minimum lease payments for such leases and does not project potential escalation or other lease-related payments. These leases are classified as operating leases and, as such, are not recorded as liabilities on the consolidated statements of financial condition. In May 2017, the Company entered into an agreement with 50 HYMC Owner LLC, for the lease of approximately 847,000 square feet of office space located at 50 Hudson Yards, New York, New York. The term of the lease is twenty years from the date that rental payments begin, expected to occur in McKESSON CORPORATION FINANCIAL REVIEW (Continued) 46 In July 2008, the Board authorized the retirement of shares of the Company’s common stock that may be repurchased from time-to-time pursuant to its stock repurchase program. During the second quarter of 2009, all of the 4 million repurchased shares, which we purchased for $204 million, were formally retired by the Company. The retired shares constitute authorized but unissued shares. We elected to allocate any excess of share repurchase price over par value between additional paid-in capital and retained earnings. As such, $165 million was recorded as a decrease to retained earnings. The Company anticipates that it will continue to pay quarterly cash dividends in the future. However, the payment and amount of future dividends remain within the discretion of the Board and will depend upon the Company’s future earnings, financial condition, capital requirements and other factors. Although we believe that our operating cash flow, financial assets, current access to capital and credit markets, including our existing credit and sales facilities, will give us the ability to meet our financing needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the global capital and credit markets will not impair our liquidity or increase our costs of borrowing. Selected Measures of Liquidity and Capital Resources: |
9,508,604.16311 | What will Net revenues reach in 2009 if it continues to grow at its current rate? (in thousands) | Transaction Revenues” to “Marketing Services and Other Revenues” in order to more closely align our net transaction revenue presentation with our key operating metrics. “Marketing Services and Other Revenues” also includes amounts previously reflected under “Advertising and Other Revenue. ” Prior period amounts have been reclassified to conform to the current presentation. Consolidated net revenues, as well as total segment revenues, are unchanged. (2) Total value of all successfully closed items between users on eBay Marketplaces trading platforms during the period, regardless of whether the buyer and seller actually consummated the transaction. (3) Total dollar volume of payments, net of payment reversals, successfully completed through our payments network or on Bill Me Later accounts during the period, excluding the payment gateway business. (4) Cumulative number of unique user accounts, which includes users who may have registered via non-Skype based websites, as of the end of the period. Users may register more than once and, as a result, may have more than one account. (5) Cumulative number of minutes that Skype users were connected with Skype’s VoIP product to traditional fixedline and mobile telephones. Seasonality The following table sets forth, for the periods presented, our total net revenues and the sequential quarterly growth of these net revenues.
<table><tr><td></td><td colspan="4">Quarter Ended</td></tr><tr><td></td><td>March 31</td><td>June 30</td><td>September 30</td><td>December 31</td></tr><tr><td></td><td colspan="4">(in thousands, except percentages)</td></tr><tr><td> 2006</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$1,390,419</td><td>$1,410,784</td><td>$1,448,637</td><td>$1,719,901</td></tr><tr><td>Current quarter vs prior quarter</td><td>5%</td><td>1%</td><td>3%</td><td>19%</td></tr><tr><td> 2007</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$1,768,074</td><td>$1,834,429</td><td>$1,889,220</td><td>$2,180,606</td></tr><tr><td>Current quarter vs prior quarter</td><td>3%</td><td>4%</td><td>3%</td><td>15%</td></tr><tr><td> 2008</td><td></td><td></td><td></td><td></td></tr><tr><td>Net revenues</td><td>$2,192,223</td><td>$2,195,661</td><td>$2,117,531</td><td>$2,035,846</td></tr><tr><td>Current quarter vs prior quarter</td><td>1%</td><td>0%</td><td>-4%</td><td>-4%</td></tr></table>
We expect transaction activity patterns on our websites to mirror general consumer buying patterns and, as such, our fourth quarter has historically been our strongest quarter of sequential revenue growth. However, this was not the case in 2008 due to the impact of the global economic environment and strengthening U. S. dollar, which impacted the fourth quarter in particular. Marketplaces Net Transaction Revenues Marketplaces net transaction revenues increased $30.2 million, or 1%, in 2008 compared to 2007, which is consistent with our 0.5% increase in GMVover the same period. GMV generated by our largest category, vehicles, declined 9%. Excluding vehicles, GMV would have increased 3% due primarily to an increase in our second largest category, consumer electronics. Although we achieved growth in the number of sold items on our eBay Marketplaces trading platforms, the average selling price declined primarily as a result of consumer buying patterns in a weakening global economic environment. Expenditures for buyer incentive programs, which are generally recorded as a reduction in revenue, reduced revenue growth by approximately 4% in 2008. In addition, pricing discounts and changes had a negative impact on revenue growth. Marketplaces net transaction revenues increased $816.3 million, or 21%, in 2007 compared to 2006 due primarily to a 13% increase in GMV during 2007 compared to 2006, and a shift to higher revenue generating categories. GMV growth in 2007 occurred across all major categories, with the vehicles, consumer electronics, Liquidity and Capital Resources Cash Flows
<table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2006</td><td>2007</td><td>2008</td></tr><tr><td></td><td colspan="3">(in thousands)</td></tr><tr><td> Consolidated Cash Flow Data:</td><td></td><td></td><td></td></tr><tr><td>Net cash provided by (used in):</td><td></td><td></td><td></td></tr><tr><td>Operating activities</td><td>$2,247,791</td><td>$2,641,109</td><td>$2,881,995</td></tr><tr><td>Investing activities</td><td>228,853</td><td>-693,146</td><td>-2,057,346</td></tr><tr><td>Financing activities</td><td>-1,260,687</td><td>-693,392</td><td>-1,673,851</td></tr><tr><td>Effect of exchange rates on cash and cash equivalents</td><td>133,255</td><td>303,828</td><td>-183,061</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td>$1,349,212</td><td>$1,558,399</td><td>$-1,032,263</td></tr></table>
Operating Activities We generated cash from operating activities in amounts greater than net income in 2006, 2007 and 2008, due primarily to non-cash charges to earnings and tax benefits from stock-based compensation. Non-cash charges to earnings included depreciation and amortization on our long-term assets, stock-based compensation and the provision for transaction and loan losses. Non-cash charges in 2007 also included a $1.4 billion goodwill impairment charge (including the $530.3 million earn out settlement payment). Cash paid for income taxes in 2006, 2007 and 2008 was $179.2 million, $363.0 million and $366.8 million, respectively. Investing Activities The net cash used in investing activities in 2008 and 2007 was due primarily to cash paid for acquisitions and the purchase of property and equipment, which was offset in 2007 by cash generated by the sale of investments. The net cash provided by investing activities in 2006 reflected the cash generated from the sale of investments offset by the purchase of property and equipment. Purchases of property and equipment, net totaled $565.9 million in 2008, $454.0 million in 2007, and $515.4 million in 2006, related primarily to purchases of computer equipment and software to support our site operations, customer support and international expansion. Cash expended for acquisitions, net of cash acquired, totaled approximately $1.4 billion in 2008, $863.6 million in 2007, and $45.5 million in 2006. In 2008, acquisition activity of $1.4 billion consisted primarily of the acquisition of Fraud Sciences, Den Bla? Avis and BilBasen and Bill Me Later. In 2007, acquisition activity primarily consisted of a $530.3 million earn out settlement payment related to our 2005 Skype acquisition and our acquisition of StubHub. In 2006, we acquired Tradera. com. Financing Activities The net cash flows used in financing activities of $1.7 billion in 2008 were due primarily to the repurchase of approximately 80.6 million shares of our common stock for an aggregate purchase price of approximately $2.2 billion and the repayment of a bank obligation of $434.0 million assumed in the Bill Me Later acquisition, offset by the proceeds from stock option exercises totaling $135.1 million and $800.0 million of net proceeds from borrowings under our credit agreement. The net cash flows used in financing activities of $693.4 million in 2007 were due primarily to the repurchase of approximately 44.6 million shares of our common stock for an aggregate purchase price of approximately $1.5 billion, offset by the proceeds from stock option exercises totaling $507.0 million and $200.0 million of net proceeds from borrowings under our credit agreement. The net cash flows used in financing activities of $1.3 billion in 2006 were due primarily to the repurchase of approximately 54.5 million shares of our common stock for an aggregate purchase price of approximately $1.7 billion, offset by the proceeds from stock option exercises totaling $313.5 million. Prior to 2006, we had not repurchased our common stock under a stock repurchase program. grant-date fair value of stock options granted during 2006, 2007 and 2008 was $10.47, $10.60 and $7.46 per share, respectively, using the Black-Scholes model with the following weighted-average assumptions:
<table><tr><td></td><td colspan="3"> Year Ended December 31,</td></tr><tr><td></td><td> 2006</td><td> 2007</td><td> 2008</td></tr><tr><td>Risk-free interest rate</td><td>4.7%</td><td>4.5%</td><td>2.3%</td></tr><tr><td>Expected life</td><td>3.0 years</td><td>3.5 years</td><td>3.8 years</td></tr><tr><td>Dividend yield</td><td>0%</td><td>0%</td><td>0%</td></tr><tr><td>Expected volatility</td><td>36%</td><td>37%</td><td>34%</td></tr></table>
Our computation of expected volatility for 2006, 2007 and 2008 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U. S. Treasury yield curve in effect at the time of grant. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating forfeitures, including employee class and historical experience. Recent Accounting Pronouncements In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No.141 (Revised 2007), “Business Combinations” (FAS 141(R)). FAS 141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, as well as the goodwill acquired. Significant changes from current practice resulting from FAS 141(R) include the expansion of the definitions of a “business” and a “business combination. ” For all business combinations (whether partial, full or step acquisitions), the acquirer will record 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration will be recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value will be recognized in earnings until settlement; and acquisition-related transaction and restructuring costs will be expensed rather than treated as part of the cost of the acquisition. FAS 141(R) also establishes disclosure requirements to enable users to evaluate the nature and financial effects of the business combination. FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. FAS 141(R) may have an impact on our consolidated financial statements. The nature and magnitude of the specific impact will depend upon the nature, terms, and size of the acquisitions consummated after the effective date. In December 2007, the FASB issued FAS No.160, “Noncontrolling Interests in Consolidated Financial Statements — An amendment of ARB No.51” (FAS 160). FAS 160 amends Accounting Research Bulletin 51, “Consolidated Financial Statements,” to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is a third-party ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, FAS 160 requires the consolidated statement of income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. FAS 160 also requires disclosure on the face of the consolidated statement of income of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. FAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is not permitted. We do not believe the adoption of FAS 160 will have a material impact on our consolidated financial statements. In February 2008, the FASB issued Staff Position No.157-2 (FSP 157-2), which delays the effective date of FAS 157 one year for all nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. FSP 157-2 is effective for us beginning January 1, 2009. We do not believe the adoption of FSP 157-2 will have a material impact on our consolidated financial statements. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXECUTIVE SUMMARY International Paper Company reported net sales of $23.4 billion in 2009, compared with $24.8 billion in 2008 and $21.9 billion in 2007. Net earnings totaled $663 million in 2009, including $1.4 billion of alternative fuel mixture credits and $853 million of charges to restructure ongoing businesses, compared with a loss of $1.3 billion in 2008, which included a $1.8 billion goodwill impairment charge. Net earnings in 2007 totaled $1.2 billion. The Company performed well in 2009 considering the magnitude of the challenges it faced, both domestically and around the world. Despite weak global economic conditions, the Company generated record cash flow from operations, enabling us to reduce long-term debt by $3.1 billion while increasing cash balances by approximately $800 million. Also during 2009, the Company incurred 3.6 million tons of downtime, including 1.1 million tons associated with the shutdown of production capacity in our North American mill system to continue to match our production to our customers’ needs. These actions should result in higher operating rates, lower fixed costs and lower payroll costs in 2010 and beyond. Furthermore, the realization of integration synergies in our U. S. Industrial Packaging business and overhead reduction initiatives across the Company position International Paper to benefit from a lower cost profile in future years. As 2010 begins, we expect that first-quarter operations will continue to be challenging. In addition to being a seasonally slow quarter for many of our businesses, poor harvesting weather conditions in the U. S. South and increasing competition for limited supplies of recycled fiber are expected to lead to further increases in fiber costs for our U. S. mills. Planned maintenance outage expenses will also be higher than in the 2009 fourth quarter. However, we have announced product price increases for our major global manufacturing businesses, and while these actions may not have a significant effect on first-quarter results, we believe that the benefits beginning in the second quarter will be significant. Additionally, we expect to benefit from the capacity management, cost reduction and integration synergy actions taken during 2009. As a result, the Company remains positive about projected operating results in 2010, with improved earnings versus 2009 expected in all major businesses. We will continue to focus on aggressive cost management and strong cash flow generation as 2010 progresses. Results of Operations Industry segment operating profits are used by International Paper’s management to measure the earnings performance of its businesses. Management believes that this measure allows a better understanding of trends in costs, operating efficiencies, prices and volumes. Industry segment operating profits are defined as earnings before taxes, equity earnings, noncontrolling interests, interest expense, corporate items and corporate special items. Industry segment operating profits are defined by the Securities and Exchange Commission as a non-GAAP financial measure, and are not GAAP alternatives to net income or any other operating measure prescribed by accounting principles generally accepted in the United States. International Paper operates in six segments: Industrial Packaging, Printing Papers, Consumer Packaging, Distribution, Forest Products, and Specialty Businesses and Other. The following table shows the components of net earnings (loss) attributable to International Paper Company for each of the last three years: |
-0.44118 | what was the percent change in operating leases between 2011/12 and 2013/4? | Acquisition, integration, realignment and other expenses for 2009 were $75.3 million compared to $68.5 million in 2008. During 2009, we initiated a workforce realignment, which included the elimination of positions in some areas and increases in others to support long-term growth. As a result of this realignment and headcount reductions from acquisitions, we incurred approximately $19.0 million of severance and termination-related expenses. Other items in acquisition, integration, realignment and other expenses in 2009 included approximately $9.4 million of expenses related to contract termination costs, $23.4 million of certain litigation matters that were recognized during the period and various costs incurred to integrate the Abbott Spine business acquired in the fourth quarter of 2008. Included in acquisition, integration, realignment and other expenses in 2008 was $38.5 million of in-process research and development related to the Abbott Spine acquisition and other costs related to the integration of Abbott Spine. See Note 2 to the consolidated financial statements for a more complete description of these charges. We recognized a net curtailment and settlement gain of $32.1 million during 2009 related to amending our U. S. and Puerto Rico postretirement benefit plans. For more information regarding the net curtailment and settlement gain, see Note 12 to the consolidated financial statements. Operating Profit, Income Taxes and Net Earnings Operating profit for 2009 decreased 7 percent to $1,018.8 million from $1,090.0 million in 2008. The decrease in operating profit is due to higher operating expenses, most notably the goodwill impairment charge. Interest and other expense for 2009 increased to $20.6 million compared to income of $31.8 million in 2008. Interest and other income in 2008 included a realized gain of $38.8 million related to the sale of certain marketable securities. Interest expense increased in the 2009 period as the result of increased long-term debt used to partially fund the Abbott Spine acquisition and the $1.0 billion senior notes offering during 2009. The effective tax rate on earnings before income taxes increased to 28.1 percent for 2009, up from 24.3 percent in 2008. The effective tax rate for 2009 is negatively impacted by the goodwill impairment charge of $73.0 million recorded during 2009 for which no tax benefit was recorded. The effective tax rate for 2008 includes the impact of a current tax benefit of $31.7 million related to the 2007 settlement expense, resulting in a decrease of approximately 3 percent in the 2008 effective tax rate. This impact on the 2008 effective tax rate was partially offset by Abbott Spine acquisitionrelated in-process research and development charges recorded during 2008 for which no tax benefit was recorded. These discrete items account for the majority of the change in our effective tax rate year-over-year. Net earnings decreased 15 percent to $717.4 million for 2009, compared to $848.6 million in 2008, as a result of decreased operating profit, increased interest expense and an increased effective tax rate. Basic earnings per share in 2009 decreased 10 percent to $3.34 from $3.73 in 2008. Diluted earnings per share decreased 11 percent to $3.32 from $3.72 in 2008. The disproportional change in earnings per share as compared to net earnings is attributed to the effect of 2009 and 2008 share repurchases. ear Ended December 31, 2008 Compared to Year Ended December 31, 2007 Net Sales by Reportable Segment The following table presents net sales by reportable segment and the components of the percentage changes (dollars in millions):
<table><tr><td></td><td colspan="2">Year Ended December 31,</td><td></td><td rowspan="2">Volume/ Mix</td><td></td><td rowspan="2">Foreign Exchange</td></tr><tr><td></td><td>2008</td><td>2007</td><td>% Inc</td><td>Price</td></tr><tr><td>Americas</td><td>$2,353.9</td><td>$2,277.0</td><td>3%</td><td>3%</td><td>–%</td><td>–%</td></tr><tr><td>Europe</td><td>1,179.1</td><td>1,081.0</td><td>9</td><td>4</td><td>–</td><td>5</td></tr><tr><td>Asia Pacific</td><td>588.1</td><td>539.5</td><td>9</td><td>5</td><td>-3</td><td>7</td></tr><tr><td>Total</td><td>$4,121.1</td><td>$3,897.5</td><td>6</td><td>3</td><td>–</td><td>3</td></tr></table>
We have a five year $1,350 million revolving, multicurrency, senior unsecured credit facility maturing November 30, 2012 (Senior Credit Facility). We had $128.8 million outstanding under the Senior Credit Facility at December 31, 2009, and an availability of $1,221.2 million. The Senior Credit Facility contains provisions by which we can increase the line to $1,750 million. We also have available uncommitted credit facilities totaling $84.1 million. We may use excess cash or further borrow against our Senior Credit Facility, subject to limits set by our Board of Directors, to repurchase additional common stock under the $1.25 billion program which expires December 31, 2010. Approximately $211.1 million remains authorized for future repurchases under this plan. Management believes that cash flows from operations and available borrowings under the Senior Credit Facility are sufficient to meet our expected working capital, capital expenditure and debt service needs. Should investment opportunities arise, we believe that our earnings, balance sheet and cash flows will allow us to obtain additional capital, if necessary. CONTRACTUAL OBLIGATIONS We have entered into contracts with various third parties in the normal course of business which will require future payments. The following table illustrates our contractual obligations (in millions):
<table><tr><td>Contractual Obligations</td><td>Total</td><td>2010</td><td>2011 and 2012</td><td>2013 and 2014</td><td>2015 and Thereafter</td></tr><tr><td>Long-term debt</td><td>$1,127.6</td><td>$–</td><td>$128.8</td><td>$–</td><td>$998.8</td></tr><tr><td>Interest payments</td><td>1,095.6</td><td>53.7</td><td>103.8</td><td>103.8</td><td>834.3</td></tr><tr><td>Operating leases</td><td>134.6</td><td>37.3</td><td>47.6</td><td>26.6</td><td>23.1</td></tr><tr><td>Purchase obligations</td><td>33.0</td><td>27.8</td><td>5.1</td><td>0.1</td><td>–</td></tr><tr><td>Long-term income taxes payable</td><td>94.3</td><td>–</td><td>56.5</td><td>15.3</td><td>22.5</td></tr><tr><td>Other long-term liabilities</td><td>234.2</td><td>–</td><td>81.7</td><td>26.2</td><td>126.3</td></tr><tr><td>Total contractual obligations</td><td>$2,719.3</td><td>$118.8</td><td>$423.5</td><td>$172.0</td><td>$2,005.0</td></tr></table>
CRITICAL ACCOUNTING ESTIMATES Our financial results are affected by the selection and application of accounting policies and methods. Significant accounting policies which require management’s judgment are discussed below. Excess Inventory and Instruments – We must determine as of each balance sheet date how much, if any, of our inventory may ultimately prove to be unsaleable or unsaleable at our carrying cost. Similarly, we must also determine if instruments on hand will be put to productive use or remain undeployed as a result of excess supply. Reserves are established to effectively adjust inventory and instruments to net realizable value. To determine the appropriate level of reserves, we evaluate current stock levels in relation to historical and expected patterns of demand for all of our products and instrument systems and components. The basis for the determination is generally the same for all inventory and instrument items and categories except for work-in-progress inventory, which is recorded at cost. Obsolete or discontinued items are generally destroyed and completely written off. Management evaluates the need for changes to valuation reserves based on market conditions, competitive offerings and other factors on a regular basis. Income Taxes – Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in both the U. S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. We estimate income tax expense and income tax liabilities and assets by taxable jurisdiction. Realization of deferred tax assets in each taxable jurisdiction is dependent on our ability to generate future taxable income sufficient to realize the benefits. We evaluate deferred tax assets on an ongoing basis and provide valuation allowances if it is determined to be “more likely than not” that the deferred tax benefit will not be realized. Federal income taxes are provided on the portion of the income of foreign subsidiaries that is expected to be remitted to the U. S. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. We are subject to regulatory review or audit in virtually all of those jurisdictions and those reviews and audits may require extended periods of time to resolve. We record our income tax provisions based on our knowledge of all relevant facts and circumstances, including existing tax laws, our experience with previous settlement agreements, the status of current examinations and our understanding of how the tax authorities view certain relevant industry and commercial matters. We recognize tax liabilities in accordance with the Financial Accounting Standards Board’s (FASB) guidance on income taxes and we adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. Commitments and Contingencies – Accruals for product liability and other claims are established with the assistance of internal and external legal counsel based on current information and historical settlement information for claims, related legal fees and for claims incurred but not reported. We use an actuarial model to assist management in determining an appropriate level of accruals for product liability claims. Historical patterns of claim loss development NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Revisions to the Consolidated Balance Sheet
<table><tr><td></td><td colspan="3">December 31, 2014</td></tr><tr><td></td><td>As Reported</td><td>Adjustments</td><td>As Revised</td></tr><tr><td>Inventories</td><td>$1,169.0</td><td>$24.3</td><td>$1,193.3</td></tr><tr><td>Total Current Assets</td><td>4,289.0</td><td>24.3</td><td>4,313.3</td></tr><tr><td>Property, plant and equipment, net</td><td>1,288.8</td><td>-3.5</td><td>1,285.3</td></tr><tr><td>Other assets</td><td>939.2</td><td>2.5</td><td>941.7</td></tr><tr><td>Total Assets</td><td>9,634.7</td><td>23.3</td><td>9,658.0</td></tr><tr><td>Accounts payable</td><td>167.1</td><td>-21.9</td><td>145.2</td></tr><tr><td>Income taxes payable</td><td>72.4</td><td>7.9</td><td>80.3</td></tr><tr><td>Other current liabilities</td><td>798.5</td><td>–</td><td>798.5</td></tr><tr><td>Total Current Liabilities</td><td>1,038.0</td><td>-14.0</td><td>1,024.0</td></tr><tr><td>Long-term income tax payable</td><td>181.7</td><td>8.2</td><td>189.9</td></tr><tr><td>Total Liabilities</td><td>3,112.1</td><td>-5.8</td><td>3,106.3</td></tr><tr><td>Retained earnings</td><td>8,285.2</td><td>76.9</td><td>8,362.1</td></tr><tr><td>Accumulated other comprehensive income</td><td>85.9</td><td>-47.8</td><td>38.1</td></tr><tr><td>Total Zimmer Holdings, Inc. stockholders’ equity</td><td>6,520.8</td><td>29.1</td><td>6,549.9</td></tr><tr><td>Total Stockholders’ Equity</td><td>6,522.6</td><td>29.1</td><td>6,551.7</td></tr><tr><td>Total Liabilities and Stockholders’ Equity</td><td>9,634.7</td><td>23.3</td><td>9,658.0</td></tr></table>
Year ended December 31, 2014
<table><tr><td></td><td colspan="3">Year ended December 31, 2014</td><td colspan="3">Year ended December 31, 2013</td></tr><tr><td></td><td>As Reported</td><td>Adjustments</td><td>As Revised</td><td>As Reported</td><td>Adjustments</td><td>As Revised</td></tr><tr><td>Net earnings</td><td>$719.0</td><td>$0.2</td><td>$719.2</td><td>$759.2</td><td>$19.4</td><td>$778.6</td></tr><tr><td>Deferred income tax provision</td><td>-84.2</td><td>-6.3</td><td>-90.5</td><td>-126.2</td><td>–</td><td>-126.2</td></tr><tr><td>Changes in operating assets and liabilities, net of effect of acquisitions:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income taxes payable</td><td>-51.9</td><td>1.5</td><td>-50.4</td><td>96.8</td><td>7.6</td><td>104.4</td></tr><tr><td>Inventories</td><td>-154.1</td><td>-10.5</td><td>-164.6</td><td>-128.4</td><td>-19.7</td><td>-148.1</td></tr><tr><td>Accounts payable and accrued expenses</td><td>120.1</td><td>-11.7</td><td>108.4</td><td>38.3</td><td>-4.7</td><td>33.6</td></tr><tr><td>Other assets and liabilities</td><td>87.6</td><td>26.8</td><td>114.4</td><td>-47.1</td><td>-2.6</td><td>-49.7</td></tr></table>
We have not presented revisions to our consolidated statements of stockholders’ equity. The only revisions to these statements are related to retained earnings caused by revisions to net earnings and accumulated other comprehensive income caused by revisions to other comprehensive income (loss). These revisions have already been presented in the tables for the consolidated statements of earnings and comprehensive income and the consolidated balance sheets. In the fourth quarter of 2015 we discovered an error that was immaterial to previous quarters’ condensed consolidated statements of cash flows. As further discussed in Note 4, we recognized $90.4 million of compensation expense related to previously unvested LVB stock options and LVB stock-based awards that vested immediately prior to the merger under the terms of the merger agreement. $52.8 million of the $90.4 million represented cash payments to holders of these options and stock-based awards. In the six month period ended June 30, 2015 and nine month period ended September 30, 2015, we presented the $52.8 million as a cash outflow from investing activities. However, since the payment represented compensation expense, the $52.8 million should have been presented as an operating cash outflow. We have corrected this error in the consolidated statement of cash flows for the year ended December 31, 2015. We will also revise future interim filings to correct for this error.3. Significant Accounting Policies Basis of Presentation – The consolidated financial statements include the accounts of Zimmer Biomet Holdings and its subsidiaries in which it holds a controlling financial interest. All significant intercompany accounts and transactions are eliminated. Certain amounts in the 2014 and 2013 consolidated financial statements have been reclassified to conform to the 2015 presentation. Use of Estimates – The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U. S. which require us to make |
0.01385 | what was the percentage change in net cash provided by operating activities from 2016 to 2017? | Protection The following table presents the results of operations of our Protection segment on an operating basis:
<table><tr><td></td><td colspan="2">Years Ended December 31,</td><td></td><td></td></tr><tr><td></td><td>2013</td><td>2012</td><td colspan="2">Change</td></tr><tr><td></td><td colspan="3">(in millions)</td><td></td></tr><tr><td>Revenues</td><td></td><td></td><td></td><td></td></tr><tr><td>Management and financial advice fees</td><td>$58</td><td>$55</td><td>$3</td><td>5%</td></tr><tr><td>Distribution fees</td><td>91</td><td>91</td><td>—</td><td>—</td></tr><tr><td>Net investment income</td><td>439</td><td>429</td><td>10</td><td>2</td></tr><tr><td>Premiums</td><td>1,188</td><td>1,121</td><td>67</td><td>6</td></tr><tr><td>Other revenues</td><td>410</td><td>392</td><td>18</td><td>5</td></tr><tr><td>Total revenues</td><td>2,186</td><td>2,088</td><td>98</td><td>5</td></tr><tr><td>Banking and deposit interest expense</td><td>—</td><td>1</td><td>-1</td><td>—</td></tr><tr><td>Total net revenues</td><td>2,186</td><td>2,087</td><td>99</td><td>5</td></tr><tr><td>Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>62</td><td>53</td><td>9</td><td>17</td></tr><tr><td>Interest credited to fixed accounts</td><td>145</td><td>143</td><td>2</td><td>1</td></tr><tr><td>Benefits, claims, losses and settlement expenses</td><td>1,252</td><td>1,146</td><td>106</td><td>9</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>118</td><td>110</td><td>8</td><td>7</td></tr><tr><td>Interest and debt expense</td><td>25</td><td>24</td><td>1</td><td>4</td></tr><tr><td>General and administrative expense</td><td>248</td><td>238</td><td>10</td><td>4</td></tr><tr><td>Total expenses</td><td>1,850</td><td>1,714</td><td>136</td><td>8</td></tr><tr><td>Operating earnings</td><td>$336</td><td>$373</td><td>$-37</td><td>-10%</td></tr></table>
Our Protection segment pretax operating income, which excludes net realized gains or losses and the market impact on indexed universal life benefits (net of hedges and the related DAC amortization, unearned revenue amortization and the reinsurance accrual), decreased $37 million, or 10%, to $336 million for the year ended December 31, 2013 compared to $373 million for the prior year reflecting lower auto and home earnings. Net Revenues Net revenues, which exclude net realized gains or losses and the unearned revenue amortization and the reinsurance accrual offset to the market impact on indexed universal life benefits, increased $99 million, or 5%, to $2.2 billion for the year ended December 31, 2013 compared to $2.1 billion for the prior year primarily due to the impact of unlocking and growth in auto and home premiums, as well as an increase in net investment income. Net investment income, which excludes net realized gains or losses, increased $10 million, or 2%, to $439 million for the year ended December 31, 2013 compared to $429 million for the prior year due to an increase in investment income on fixed maturities driven by higher average invested assets for life and health. Premiums increased $67 million, or 6%, to $1.2 billion for the year ended December 31, 2013 compared to $1.1 billion for the prior year primarily due to growth in auto and home premiums driven by new policy sales growth across market segments, primarily from our affinity relationships with Costco and Progressive. Auto and home policy counts increased 11% year-over-year. Other revenues increased $18 million, or 5%, to $410 million for the year ended December 31, 2013 compared to $392 million for the prior year primarily due to an $18 million unfavorable impact from unlocking for the year ended December 31, 2013 compared to a $41 million unfavorable impact in the prior year. The primary driver of the unlocking impact to other revenues in both periods was lower projected gains on reinsurance contracts resulting from favorable mortality experience. Expenses Total expenses, which exclude the market impact on indexed universal life benefits (net of hedges and the related DAC amortization), increased $136 million, or 8%, to $1.9 billion for the year ended December 31, 2013 compared to $1.7 billion for the prior year primarily due to an increase in benefits, claims, losses and settlement expenses. Distribution expenses increased $9 million, or 17%, to $62 million for the year ended December 31, 2013 compared to $53 million for the prior year driven by higher compensation related to higher sales. Benefits, claims, losses and settlement expenses, which exclude the market impact on indexed universal life benefits (net of hedges), increased $106 million, or 9%, to $1.3 billion for the year ended December 31, 2013 compared to $1.1 billion for the prior year due to the impact of unlocking, higher expenses related to our auto and home business, an We expect net interest expense of approximately $135 to $140 in 2011, subject to capital deployment activities during the year. Our effective tax rate was 31.2 percent in 2008, 31.5 percent in 2009 and 30.7 percent in 2010. The 2008 rate includeda$35, or approximately $0.09 per-share, benefit from the settlement of tax refund litigation, which reduced the 2008 tax rate by 100 basis points. We anticipate an effective tax rate of approximately 31 percent in 2011. For additional discussion of tax matters, see Note E to the Consolidated Financial Statements. In 2008, we entered into an agreement to sell our Spanish nitrocellulose operation and recognized a pretax loss of $11 in discontinued operations in anticipation of the sale. The sale of this operation was completed in 2010. Our reported revenues exclude the revenues associated with this divested business. We have presented the operating results of this business, along with the loss from the sale, as discontinued operations, net of income taxes. R E V I EW OF BU S I NESS GROU P S AEROSPACE Review of 2010 vs. 2009
<table><tr><td>Year Ended December 31</td><td>2009</td><td>2010</td><td colspan="2">Variance</td></tr><tr><td>Revenues</td><td>$5,171</td><td>$5,299</td><td>$128</td><td>2.5%</td></tr><tr><td>Operating earnings</td><td>707</td><td>860</td><td>153</td><td>21.6%</td></tr><tr><td>Operating margin</td><td>13.7%</td><td>16.2%</td><td></td><td></td></tr><tr><td>Gulfstream aircraft deliveries (in units):</td><td></td><td></td><td></td><td></td></tr><tr><td>Green</td><td>94</td><td>99</td><td>5</td><td>5.3%</td></tr><tr><td>Completion</td><td>110</td><td>89</td><td>-21</td><td>-19.1%</td></tr></table>
The Aerospace group’s revenues increased in 2010 compared with 2009 due primarily to steady growth in aircraft services activity throughout the year. Aircraft manufacturing and outfitting revenues remained consistent with 2009 levels, with an increase in manufac- turing volume offset by reduced outfitting work. Aircraft manufacturing revenues increased 9 percent in 2010, the result of additional deliveries and a more favorable mix of green Gulfstream aircraft. The decline in aircraft outfitting revenues was associated primarily with the group’s completions work for other original equipment manufacturers (OEMs), reflecting decreased OEM production across the broader business-jet market. Aircraft services revenues, which include both Gulfstream and Jet Aviation’s maintenance and repair work, fixed-base operations and aircraft management services, increased 15 percent in 2010, reflecting the growing installed base of business-jet aircraft and increased utilization as the business-jet market recovers following the economic downturn. Revenues from sales of pre-owned aircraft were down slightly from 2009. The group’s operating earnings improved significantly in 2010 compared with 2009, with improvements in all areas of the group’s portfolio. The components of the earnings growth were as follows:
<table><tr><td>Aircraft manufacturing and outfitting</td><td>$68</td></tr><tr><td>Pre-owned aircraft</td><td>40</td></tr><tr><td>Aircraft services</td><td>29</td></tr><tr><td>SG&A/other</td><td>16</td></tr><tr><td>Total increase in operating earnings</td><td>$153</td></tr></table>
The group’s aircraft manufacturing and outfitting earnings were up in 2010 compared with 2009 due to the increase in aircraft manufacturing volume, as well as improved pricing on large-cabin aircraft and mix shift within large-cabin models. This increase was offset in part by reduced liquidated damages associated with fewer customer defaults. Margins for these activities were up 190 basis points compared with 2009. Pre-owned aircraft earnings improved significantly from 2009, when the group wrote down the carrying value of its pre-owned aircraft inventory. Pricing in the pre-owned market has improved since mid-2009, particularly for large-cabin aircraft, although inventories across the industry remain higher than historic norms. In 2010, the Aerospace group realized modest profits on its pre-owned sales, took no pre-owned aircraft write-downs and ended the year with no pre-owned aircraft in inventory. Consistent with the increased volume, aircraft services earnings continued to improve from 2009. Margins associated with aircraft services were up 70 basis points in 2010 due to improved marketplace pricing. The group’s operating earnings in 2010 were also favorably impacted by the timing of R&D expenditures and the absence of severance costs associated with workforce reductions in 2009. As a result of the factors discussed above, the group’s overall operating margins increased 250 basis points in 2010 compared with 2009. Review of 2009 vs. 2008
<table><tr><td>Year Ended December 31</td><td>2008</td><td>2009</td><td colspan="2">Variance</td></tr><tr><td>Revenues</td><td>$5,512</td><td>$5,171</td><td>$ -341</td><td>-6.2%</td></tr><tr><td>Operating earnings</td><td>1,021</td><td>707</td><td>-314</td><td>-30.8%</td></tr><tr><td>Operating margin</td><td>18.5%</td><td>13.7%</td><td></td><td></td></tr><tr><td>Gulfstream aircraft deliveries (in units):</td><td></td><td></td><td></td><td></td></tr><tr><td>Green</td><td>156</td><td>94</td><td>-62</td><td>-39.7%</td></tr><tr><td>Completion</td><td>152</td><td>110</td><td>-42</td><td>-27.6%</td></tr></table>
The Aerospace group’s revenues decreased in 2009, the result ofadecline in sales of Gulfstream aircraft that was offset in part by the addition of Jet Aviation, which we acquired in the fourth quarter of 2008. We reduced Gulfstream’s 2009 aircraft production, primarily in the group’s mid-cabin In summary, our cash flows for each period were as follows:
<table><tr><td>Years Ended(In Millions)</td><td>Dec 30,2017</td><td>Dec 31,2016</td><td>Dec 26,2015</td></tr><tr><td>Net cash provided by operating activities</td><td>$22,110</td><td>$21,808</td><td>$19,018</td></tr><tr><td>Net cash used for investing activities</td><td>-15,762</td><td>-25,817</td><td>-8,183</td></tr><tr><td>Net cash provided by (used for) financing activities</td><td>-8,475</td><td>-5,739</td><td>1,912</td></tr><tr><td>Net increase (decrease) in cash and cash equivalents</td><td>$-2,127</td><td>$-9,748</td><td>$12,747</td></tr></table>
OPERATING ACTIVITIES Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. For 2017 compared to 2016, the $302 million increase in cash provided by operating activities was due to changes to working capital partially offset by adjustments for non-cash items and lower net income. Tax Reform did not have an impact on our 2017 cash provided by operating activities. The increase in cash provided by operating activities was driven by increased income before taxes and $1.0 billion receipts of customer deposits. These increases were partially offset by increased inventory and accounts receivable. Income taxes paid, net of refunds, in 2017 compared to 2016 were $2.9 billion higher due to higher income before taxes, taxable gains on sales of ASML, and taxes on the ISecG divestiture. We expect approximately $2.0 billion of additional customer deposits in 2018. For 2016 compared to 2015, the $2.8 billion increase in cash provided by operating activities was due to adjustments for non-cash items and changes in working capital, partially offset by lower net income. The adjustments for non-cash items were higher in 2016 primarily due to restructuring and other charges and the change in deferred taxes, partially offset by lower depreciation. INVESTING ACTIVITIES Investing cash flows consist primarily of capital expenditures; investment purchases, sales, maturities, and disposals; and proceeds from divestitures and cash used for acquisitions. Our capital expenditures were $11.8 billion in 2017 ($9.6 billion in 2016 and $7.3 billion in 2015). The decrease in cash used for investing activities in 2017 compared to 2016 was primarily due to higher net activity of available-for sale-investments in 2017, proceeds from our divestiture of ISecG in 2017, and higher maturities and sales of trading assets in 2017. This activity was partially offset by higher capital expenditures in 2017. The increase in cash used for investing activities in 2016 compared to 2015 was primarily due to our completed acquisition of Altera, net purchases of trading assets in 2016 compared to net sales of trading assets in 2015, and higher capital expenditures in 2016. This increase was partially offset by lower investments in non-marketable equity investments. FINANCING ACTIVITIES Financing cash flows consist primarily of repurchases of common stock, payment of dividends to stockholders, issuance and repayment of short-term and long-term debt, and proceeds from the sale of shares of common stock through employee equity incentive plans. The increase in cash used for financing activities in 2017 compared to 2016 was primarily due to net long-term debt activity, which was a use of cash in 2017 compared to a source of cash in 2016. During 2017, we repurchased $3.6 billion of common stock under our authorized common stock repurchase program, compared to $2.6 billion in 2016. As of December 30, 2017, $13.2 billion remained available for repurchasing common stock under the existing repurchase authorization limit. We base our level of common stock repurchases on internal cash management decisions, and this level may fluctuate. Proceeds from the sale of common stock through employee equity incentive plans totaled $770 million in 2017 compared to $1.1 billion in 2016. Our total dividend payments were $5.1 billion in 2017 compared to $4.9 billion in 2016. We have paid a cash dividend in each of the past 101 quarters. In January 2018, our Board of Directors approved an increase to our cash dividend to $1.20 per share on an annual basis. The board has declared a quarterly cash dividend of $0.30 per share of common stock for Q1 2018. The dividend is payable on March 1, 2018 to stockholders of record on February 7, 2018. Cash was used for financing activities in 2016 compared to cash provided by financing activities in 2015, primarily due to fewer debt issuances and the repayment of debt in 2016. This activity was partially offset by repayment of commercial paper in 2015 and fewer common stock repurchases in 2016. |
0.16 | what is the roi of an investment in s&p500 index from 2011 to 2012? | Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies – (Continued) CNA applies the same impairment model as described above for the majority of its non-redeemable preferred stock securities on the basis that these securities possess characteristics similar to debt securities and that the issuers maintain their ability to pay dividends. For all other equity securities, in determining whether the security is otherthan-temporarily impaired, the Impairment Committee considers a number of factors including, but not limited to: (i) the length of time and the extent to which the fair value has been less than amortized cost, (ii) the financial condition and near term prospects of the issuer, (iii) the intent and ability of CNA to retain its investment for a period of time sufficient to allow for an anticipated recovery in value and (iv) general market conditions and industry or sector specific outlook. Joint venture investments – The Company has 20% to 50% interests in operating joint ventures related to hotel properties and had joint venture interests in the former Bluegrass Project, as discussed in Note 2, that are accounted for under the equity method. The Company’s investment in these entities was $217 million and $234 million for the years ended December 31, 2016 and 2015 and reported in Other assets on the Company’s Consolidated Balance Sheets. Equity income (loss) for these investments was $41 million, $43 million and $(62) million for the years ended December 31, 2016, 2015 and 2014 and reported in Other operating expenses on the Company’s Consolidated Statements of Income. Some of these investments are variable interest entities (“VIE”) as defined in the accounting guidance because the entities will require additional funding from each equity owner throughout the development and construction phase and are accounted for under the equity method since the Company is not the primary beneficiary. The maximum exposure to loss for the VIE investments is $337 million, consisting of the amount of the investment and debt guarantees. The following tables present summarized financial information for these joint ventures:
<table><tr><td> Year Ended December 31</td><td></td><td> 2016</td><td>2015</td></tr><tr><td> (In millions)</td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td></td><td>$1,749</td><td>$1,577</td></tr><tr><td>Total liabilities</td><td></td><td>1,444</td><td>1,231</td></tr><tr><td> Year Ended December 31</td><td> 2016</td><td>2015</td><td>2014</td></tr><tr><td>Revenues</td><td>$693</td><td>$606</td><td>$491</td></tr><tr><td>Net income</td><td>80</td><td>71</td><td>32</td></tr></table>
Hedging – The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedging transactions. The Company also formally assesses (both at the hedge’s inception and on an ongoing basis) whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in fair value or cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. When it is determined that a derivative for which hedge accounting has been designated is not (or ceases to be) highly effective, the Company discontinues hedge accounting prospectively. See Note 3 for additional information on the Company’s use of derivatives. Securities lending activities – The Company lends securities for the purpose of enhancing income or to finance positions to unrelated parties who have been designated as primary dealers by the Federal Reserve Bank of New York. Borrowers of these securities must deposit and maintain collateral with the Company of no less than 100% of the fair value of the securities loaned. U. S. Government securities and cash are accepted as collateral. The Company maintains effective control over loaned securities and, therefore, continues to report such securities as investments on the Consolidated Balance Sheets. Securities lending is typically done on a matched-book basis where the collateral is invested to substantially match the term of the loan. This matching of terms tends to limit risk. In accordance with the Company’s lending agreements, securities on loan are returned immediately to the Company upon notice. Collateral is not reflected as an asset of the Company. There was no collateral held at December 31, 2016 and 2015. Notes to Consolidated Financial Statements Note 4. Fair Value – (Continued) x Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. x Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are not observable. Prices may fall within Level 1, 2 or 3 depending upon the methodology and inputs used to estimate fair value for each specific security. In general, the Company seeks to price securities using third party pricing services. Securities not priced by pricing services are submitted to independent brokers for valuation and, if those are not available, internally developed pricing models are used to value assets using a methodology and inputs the Company believes market participants would use to value the assets. Prices obtained from third-party pricing services or brokers are not adjusted by the Company. The Company performs control procedures over information obtained from pricing services and brokers to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. Procedures may include: (i) the review of pricing service methodologies or broker pricing qualifications, (ii) back-testing, where past fair value estimates are compared to actual transactions executed in the market on similar dates, (iii) exception reporting, where period-over-period changes in price are reviewed and challenged with the pricing service or broker based on exception criteria, (iv) detailed analysis, where the Company performs an independent analysis of the inputs and assumptions used to price individual securities and (v) pricing validation, where prices received are compared to prices independently estimated by the Company. The fair values of CNA’s life settlement contracts are included in Other assets on the Consolidated Balance Sheets. Equity options purchased are included in Equity securities, and all other derivative assets are included in Receivables. Derivative liabilities are included in Payable to brokers. Assets and liabilities measured at fair value on a recurring basis are summarized in the tables below:
<table><tr><td> December 31, 2016</td><td>Level 1</td><td> Level 2</td><td> Level 3</td><td> Total</td></tr><tr><td> (In millions)</td><td></td><td></td><td></td><td></td></tr><tr><td> Fixed maturity securities:</td><td></td><td></td><td></td><td></td></tr><tr><td> Corporate and other bonds</td><td></td><td>$18,828</td><td>$130</td><td>$18,958</td></tr><tr><td> States, municipalities and political subdivisions</td><td></td><td>13,239</td><td>1</td><td>13,240</td></tr><tr><td> Asset-backed:</td><td></td><td></td><td></td><td></td></tr><tr><td> Residential mortgage-backed</td><td></td><td>4,944</td><td>129</td><td>5,073</td></tr><tr><td> Commercial mortgage-backed</td><td></td><td>2,027</td><td>13</td><td>2,040</td></tr><tr><td> Other asset-backed</td><td></td><td>968</td><td>57</td><td>1,025</td></tr><tr><td> Total asset-backed</td><td></td><td>7,939</td><td>199</td><td>8,138</td></tr><tr><td> U.S. Treasury and obligations of government-sponsored enterprises</td><td>$93</td><td></td><td></td><td>93</td></tr><tr><td> Foreign government</td><td></td><td>445</td><td></td><td>445</td></tr><tr><td> Redeemable preferred stock</td><td>19</td><td></td><td></td><td>19</td></tr><tr><td> Fixed maturitiesavailable-for-sale</td><td>112</td><td>40,451</td><td>330</td><td>40,893</td></tr><tr><td> Fixed maturities trading</td><td></td><td>595</td><td>6</td><td>601</td></tr><tr><td> Total fixed maturities</td><td>$112</td><td>$41,046</td><td>$336</td><td>$41,494</td></tr><tr><td> Equity securitiesavailable-for-sale</td><td>$91</td><td></td><td>$19</td><td>$110</td></tr><tr><td> Equity securities trading</td><td>438</td><td></td><td>1</td><td>439</td></tr><tr><td> Total equity securities</td><td>$529</td><td>$-</td><td>$20</td><td>$549</td></tr><tr><td> Short term investments</td><td>$3,833</td><td>$853</td><td></td><td>$4,686</td></tr><tr><td> Other invested assets</td><td>55</td><td>5</td><td></td><td>60</td></tr><tr><td> Receivables</td><td>1</td><td></td><td></td><td>1</td></tr><tr><td> Life settlement contracts</td><td></td><td></td><td>$58</td><td>58</td></tr><tr><td> Payable to brokers</td><td>-44</td><td></td><td></td><td>-44</td></tr></table>
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The following graph compares annual total return of our Common Stock, the Standard & Poor’s 500 Composite Stock Index (“S&P 500 Index”) and our Peer Group (“Loews Peer Group”) for the five years ended December 31, 2016. The graph assumes that the value of the investment in our Common Stock, the S&P 500 Index and the Loews Peer Group was $100 on December 31, 2011 and that all dividends were reinvested.
<table><tr><td></td><td>2011</td><td>2012</td><td>2013</td><td>2014</td><td>2015</td><td>2016</td></tr><tr><td>Loews Common Stock</td><td>100.0</td><td>108.91</td><td>129.64</td><td>113.59</td><td>104.47</td><td>128.19</td></tr><tr><td>S&P 500 Index</td><td>100.0</td><td>116.00</td><td>153.57</td><td>174.60</td><td>177.01</td><td>198.18</td></tr><tr><td>Loews Peer Group (a)</td><td>100.0</td><td>113.39</td><td>142.85</td><td>150.44</td><td>142.44</td><td>165.34</td></tr></table>
(a) The Loews Peer Group consists of the following companies that are industry competitors of our principal operating subsidiaries: Chubb Limited (name change from ACE Limited after it acquired The Chubb Corporation on January 15, 2016), W. R. Berkley Corporation, The Chubb Corporation (included through January 15, 2016 when it was acquired by ACE Limited), Energy Transfer Partners L. P. , Ensco plc, The Hartford Financial Services Group, Inc. , Kinder Morgan Energy Partners, L. P. (included through November 26, 2014 when it was acquired by Kinder Morgan Inc. ), Noble Corporation, Spectra Energy Corp, Transocean Ltd. and The Travelers Companies, Inc. Dividend Information We have paid quarterly cash dividends in each year since 1967. Regular dividends of $0.0625 per share of Loews common stock were paid in each calendar quarter of 2016 and 2015. |
0.07229 | what is the percentage increase from 2008 customer satisfaction index to the 2010 customer satisfaction index? | Table of Contents AAG’s Results of Operations In 2014, we realized operating income of $4.2 billion and net income of $2.9 million. Our 2014 net income included net special operating charges of $824 million and total net special charges of $1.3 billion. Excluding the effects of these special charges, we realized operating income of $5.1 billion and net income of $4.2 billion. We completed the Merger on December 9, 2013. Under GAAP, AAG’s results do not include the financial results of US Airways Group prior to the closing of the Merger. Accordingly, our 2014 period GAAP results are not comparable to the GAAP results for the 2013 or 2012 periods as those periods exclude the results of US Airways Group except for the 23 day post-Merger period from December 9, 2013 to December 31, 2013. When compared to the combined separate company results of AAG and US Airways Group for 2013, our 2014 net income excluding net special charges improved by $2.2 billion. In 2013, on a standalone basis,AAG reported a net loss of $1.6 billion and US Airways Group reported net income of $392 million. Excluding the effects of net special charges, AAG and US Airways Group reported 2013 net income of $1.2 billion and $786 million, respectively. When compared to the combined separate company results ofAAG and US Airways Group for 2012, our 2013 combined net income excluding net special charges improved by $1.5 billion. In 2012, on a standalone basis, AAG reported a net loss of $1.9 billion and US Airways Group reported net income of $637 million. Excluding the effects of net special charges, AAG reported a 2012 net loss of $130 million and US Airways Group reported net income of $537 million. The components of net special items in our accompanying consolidated statements of operations are as follows (in millions):
<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td> 2014</td><td>2013</td><td>2012</td></tr><tr><td>Other revenue special item, net -1</td><td>$—</td><td>$-31</td><td>$—</td></tr><tr><td>Mainline operating special items, net -2</td><td>800</td><td>559</td><td>386</td></tr><tr><td>Regional operating special items, net</td><td>24</td><td>8</td><td>1</td></tr><tr><td>Nonoperating special items, net -3</td><td>132</td><td>211</td><td>-280</td></tr><tr><td>Reorganization items, net -4</td><td>—</td><td>2,655</td><td>2,208</td></tr><tr><td>Income tax special items, net -5</td><td>346</td><td>-324</td><td>-569</td></tr><tr><td>Total</td><td>$1,302</td><td>$3,078</td><td>$1,746</td></tr></table>
(1) In 2013, other revenue special item, net included a credit to other revenues related to a change in accounting method resulting from the modification of AAG’s AAdvantage miles agreement with Citibank. (2) In 2014, mainline operating special items, net included $810 million of Merger integration expenses related to information technology, alignment of labor union contracts, professional fees, severance and retention, share-based compensation, divestiture of London Heathrow Slots, fleet restructuring, re-branding of aircraft and airport facilities, relocation and training. In addition, we recorded a net charge of $81 million for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations, $164 million in other special charges, including an $81 million charge to revise prior estimates of certain aircraft residual values, and other spare parts asset impairments, as well as $54 million in charges primarily relating to the buyout of certain aircraft leases. These charges were offset in part by a $309 million gain on the sale of Slots at DCA. In 2013, mainline operating special items, net included $443 million of primarily Merger related expenses due to the alignment of labor union contracts, professional fees, severance, share-based compensation and fees for US Airways to exit the Star Alliance and its codeshare agreement with United Airlines. In addition, we recorded a $107 million charge related to American’s pilot long-term disability obligation, a $43 million See table below for a reconciliation of business combination related items:
<table><tr><td>$ in millions</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Business combination related:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee compensation expense<sup>(a)</sup></td><td>5.8</td><td>7.0</td><td>—</td><td>—</td><td>2.4</td></tr><tr><td>Transaction and integration expense<sup>(b)</sup></td><td>20.6</td><td>1.4</td><td>2.2</td><td>—</td><td>5.2</td></tr><tr><td>Intangible amortization expense<sup>(c)</sup></td><td>17.4</td><td>13.9</td><td>10.6</td><td>12.6</td><td>15.4</td></tr><tr><td>Adjustments to operating income</td><td>43.8</td><td>22.3</td><td>12.8</td><td>12.6</td><td>23.0</td></tr><tr><td>Change in contingent consideration estimates<sup>(d)</sup></td><td>-7.6</td><td>7.4</td><td>-27.1</td><td>—</td><td>—</td></tr><tr><td>Foreign exchange gain related to business acquisitions<sup>(e)</sup></td><td>-12.1</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Other-than-temporary impairment<sup>(f)</sup></td><td>—</td><td>17.8</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Taxation:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Taxation on employee compensation expense<sup>(a)</sup></td><td>-2.1</td><td>-2.7</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Taxation on transaction and integration<sup>(b)</sup></td><td>-5.9</td><td>-0.5</td><td>-0.6</td><td>—</td><td>-2.1</td></tr><tr><td>Taxation on amortization<sup>(c)</sup></td><td>-1.6</td><td>-1.3</td><td>-1.5</td><td>-1.6</td><td>-1.5</td></tr><tr><td>Deferred taxation<sup>(g)</sup></td><td>19.6</td><td>19.3</td><td>20.1</td><td>21.8</td><td>21.3</td></tr><tr><td>Taxation on change in contingent consideration estimates<sup>(d)</sup></td><td>2.9</td><td>-2.8</td><td>10.3</td><td>—</td><td>—</td></tr><tr><td>Taxation on foreign exchange gain related to businessacquisitions<sup>(e)</sup></td><td>2.3</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>(Income)/loss from discontinued operations, net of taxes<sup>(h)</sup></td><td>—</td><td>—</td><td>—</td><td>3.4</td><td>-64.5</td></tr><tr><td>Adjustments to net income attributable to Invesco Ltd.</td><td>39.3</td><td>59.5</td><td>14.0</td><td>36.2</td><td>-23.8</td></tr></table>
a. Employee compensation expenses oincurred in f $5.8 million 2017 are related to our European ETF acquisition, while $7.0 million ed with the acquisition of Jemstep, a market incurred in 2016 are associat -leading provider of advisor- focused digital solutions. Expenses in 2013 are related to employee severance expenses associated with the cessation of activities from a previous acquisition. b. Transaction and integration expenses reflect the legal, regulatory, advisory, valuation, integration-related employee incentive awards, other professional or consulting fees and general and administrative costs, which includes travel costs related to transactions and the costs of temporary staf involved in executing the transaction, and the post f f -closing costs of integrating the acquired business into the company’s existing operations, including incremental costs associated with achieving synergy savings. c. Intangible amortization expense is associated with intangible assets that are identified from acquisition of a business and are amortized on a straight-line basis over useful lives. See Item 8, Financial Statements and Supplementary Data, Note 5 - “Intangible Assets” for detail. d. During 2015, the company acquired investment management contracts from Deutsche Bank and the purchase price was solely comprised of contingent consideration payable in future periods. Adjustment to the fair value of contingent consideration liability is a an increase o$7.4 millio$27.1 decrease of $7.6 million in 2017, f n in 2016 and a decrease of millioItem 8, Financial Statements and Supplementary Data, Note 2 n in 2015. See - “Fair Value of Assets and Liabilities” for detail. e. Other gains and losses for 2017 includes a realized gain of $12.1 million related to revaluation of Euros held in the U. K. in anticipation of payment for the European ETF business acquisition. f. Other-than-temporary impairment includes an impairment charge o$17.8 million hat is related to the f in 2016 t acquisition of Invesco Asset Management (India) Private Limited. g. While finite-lived intangible assets are amortized under U. S. GAAP, there is no amortization charge on goodwill and indefinite-lived intangibles. In certain qualifying situations, these can be amortized for tax purposes, generally over a 15-year period, as is the case in the U. S. These deferred tax liabilities represent tax benefits that are not included in the Consolidated Statements of Income absenan impairment charge or the dispos t al of the related business. The company receives these tax benefits but does not anticipate a sale or ipairment of these assets in the foreseeable future, an Operating/Performance Statistics Railroad performance measures reported to the AAR, as well as other performance measures, are included in the table below:
<table><tr><td></td><td><i>2010</i></td><td><i>2009</i></td><td><i>2008</i></td><td><i>% Change</i> <i>2010 v 2009</i></td><td><i>% Change</i><i>2009 v 2008</i></td></tr><tr><td>Average train speed (miles per hour)</td><td>26.2</td><td>27.3</td><td>23.5</td><td>-4%</td><td>16%</td></tr><tr><td>Average terminal dwell time (hours)</td><td>25.4</td><td>24.8</td><td>24.9</td><td>2%</td><td>-</td></tr><tr><td>Average rail car inventory (thousands)</td><td>274.4</td><td>283.1</td><td>300.7</td><td>-3%</td><td>-6%</td></tr><tr><td>Gross ton-miles (billions)</td><td>932.4</td><td>846.5</td><td>1,020.4</td><td>10%</td><td>-17%</td></tr><tr><td>Revenue ton-miles (billions)</td><td>520.4</td><td>479.2</td><td>562.6</td><td>9%</td><td>-15%</td></tr><tr><td>Operating ratio</td><td>70.6</td><td>76.1</td><td>77.4</td><td>-5.5 pt</td><td>-1.3 pt</td></tr><tr><td>Employees (average)</td><td>42,884</td><td>43,531</td><td>48,242</td><td>-1%</td><td>-10%</td></tr><tr><td>Customer satisfaction index</td><td>89</td><td>88</td><td>83</td><td>1 pt</td><td>5 pt</td></tr></table>
Average Train Speed – Average train speed is calculated by dividing train miles by hours operated on our main lines between terminals. Maintenance activities and weather disruptions, combined with higher volume levels, led to a 4% decrease in average train speed in 2010 compared to a record set in 2009. Overall, we continued operating a fluid and efficient network during the year. Lower volume levels, ongoing network management initiatives, and productivity improvements contributed to a 16% improvement in average train speed in 2009 compared to 2008. Average Terminal Dwell Time – Average terminal dwell time is the average time that a rail car spends at our terminals. Lower average terminal dwell time improves asset utilization and service. Average terminal dwell time increased 2% in 2010 compared to 2009, driven in part by our network plan to increase the length of numerous trains to improve overall efficiency, which resulted in higher terminal dwell time for some cars. Average terminal dwell time improved slightly in 2009 compared to 2008 due to lower volume levels combined with initiatives to expedite delivering rail cars to our interchange partners and customers. Average Rail Car Inventory – Average rail car inventory is the daily average number of rail cars on our lines, including rail cars in storage. Lower average rail car inventory reduces congestion in our yards and sidings, which increases train speed, reduces average terminal dwell time, and improves rail car utilization. Average rail car inventory decreased 3% in 2010 compared to 2009, while we handled 13% increases in carloads during the period compared to 2009. We maintained more freight cars off-line and retired a number of old freight cars, which drove the decreases. Average rail car inventory decreased 6% in 2009 compared to 2008 driven by a 16% decrease in volume. In addition, as carloads decreased, we stored more freight cars off-line. Gross and Revenue Ton-Miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by the number of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of tariff miles. Gross and revenue-ton-miles increased 10% and 9% in 2010 compared to 2009 due to a 13% increase in carloads. Commodity mix changes (notably automotive shipments) drove the variance in year-over-year growth between gross ton-miles, revenue ton-miles and carloads. Gross and revenue ton-miles decreased 17% and 15% in 2009 compared to 2008 due to a 16% decrease in carloads. Commodity mix changes (notably automotive shipments, which were 30% lower in 2009 versus 2008) drove the difference in declines between gross ton-miles and revenue tonmiles. Operating Ratio – Operating ratio is defined as our operating expenses as a percentage of operating revenue. Our operating ratio improved 5.5 points to 70.6% in 2010 and 1.3 points to 76.1% in 2009. Efficiently leveraging volume increases, core pricing gains, and productivity initiatives drove the improvement in 2010 and more than offset the impact of higher fuel prices during the year. Core pricing gains, lower fuel prices, network management initiatives, and improved productivity drove the improvement in 2009 and more than offset the 16% volume decline. Employees – Employee levels were down 1% in 2010 compared to 2009 despite a 13% increase in volume levels. We leveraged the additional volumes through network efficiencies and other productivity initiatives. In addition, we successfully managed the growth of our full-time-equivalent train and engine force levels at a rate less than half of our carload growth in 2010. All other operating functions and |
2,013 | When is Benefit obligation at beginning of year for Con Edison the largest? | <table><tr><td></td><td colspan="3">Year Ended December 31,</td></tr><tr><td></td><td>2011</td><td>2010</td><td>2009</td></tr><tr><td>Risk-free interest rate</td><td>1.2%</td><td>1.4%</td><td>1.7%</td></tr><tr><td>Expected life (in years)</td><td>3.8</td><td>3.4</td><td>3.8</td></tr><tr><td>Dividend yield</td><td>—%</td><td>—%</td><td>—%</td></tr><tr><td>Expected volatility</td><td>38%</td><td>37%</td><td>47%</td></tr></table>
Our computation of expected volatility for 2011 , 2010 and 2009 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award was based on the U. S. Treasury yield curve in effect at the time of grant. The estimation of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating forfeitures, including employee class and historical experience. Recent Accounting Pronouncements See “Note 1 - The Company and Summary of Significant Accounting Policies” to the consolidated financial statements included in this report, regarding the impact of certain recent accounting pronouncements on our consolidated financial statements. Item 7A: Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exposure We have significant operations internationally that are denominated in foreign currencies, primarily the Euro, British pound, Korean won, Australian dollar and Canadian dollar, subjecting us to foreign currency risk which may adversely impact our financial results. We transact business in various foreign currencies and have significant international revenues as well as costs. In addition, we charge our international subsidiaries for their use of intellectual property and technology and for certain corporate services provided by eBay and by PayPal. Our cash flow, results of operations and certain of our intercompany balances that are exposed to foreign exchange rate fluctuations may differ materially from expectations and we may record significant gains or losses due to foreign currency fluctuations and related hedging activities. We have a foreign exchange exposure management program that aims to identify material foreign currency exposures, to manage these exposures, and to minimize the potential effects of currency fluctuations on our reported consolidated cash flows and results of operations through the purchase of foreign currency exchange contracts. These foreign currency exchange contracts are accounted for as derivative instruments. For additional details related to our derivative instruments, please see “Note 9 - Derivative Instruments” to the consolidated financial statements included in this report. Interest Rate Risk The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we maintain our portfolio of cash equivalents and short-term and long-term investments in a variety of available for sale securities, including money market funds and government and corporate securities. As of December 31, 2011 , approximately 56% of our total cash and investment portfolio was held in bank deposits and money market funds. As such, changes in interest rates will impact our interest income. In addition, we regularly issue new commercial paper notes to repay outstanding commercial paper notes as they mature, and those new commercial paper notes bear interest at rates prevailing at the time of issuance. Accordingly, changes in interest rates will impact interest expense or cost of net revenues. As of December 31, 2011 , we held no direct investments in auction rate securities, collateralized debt obligations, structured investment vehicles or mortgage-backed securities. For additional details related to our investment activities, please see "Note 7 - Investments" to the consolidated financial statements included in this report. Investments in both fixed-rate and floating-rate interest-earning instruments carry varying degrees of interest rate risk. The fair market value of our fixed-rate securities may be adversely impacted due to a rise in interest rates. In general, securities with longer maturities are subject to greater interest-rate risk than those with shorter maturities. While floating rate securities generally are subject to less interest-rate risk than fixedrate securities, floating-rate securities may produce less income than expected if interest rates decrease. Due in part to these factors, our investment income may fall short of expectations or we may suffer losses in principal if securities are sold that have declined in market value due to changes in interest rates. As of
<table><tr><td></td><td colspan="3">Con Edison</td><td colspan="3">CECONY</td></tr><tr><td>(Millions of Dollars)</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>CHANGE IN BENEFIT OBLIGATION</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Benefit obligation at beginning of year</td><td>$1,411</td><td>$1,395</td><td>$1,454</td><td>$1,203</td><td>$1,198</td><td>$1,238</td></tr><tr><td>Service cost</td><td>20</td><td>19</td><td>23</td><td>15</td><td>15</td><td>18</td></tr><tr><td>Interest cost on accumulated postretirement benefit obligation</td><td>51</td><td>60</td><td>54</td><td>43</td><td>52</td><td>46</td></tr><tr><td>Amendments</td><td>—</td><td>-12</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net actuarial loss/(gain)</td><td>-103</td><td>47</td><td>-42</td><td>-85</td><td>28</td><td>-20</td></tr><tr><td>Benefits paid and administrative expenses</td><td>-127</td><td>-134</td><td>-136</td><td>-117</td><td>-125</td><td>-126</td></tr><tr><td>Participant contributions</td><td>35</td><td>36</td><td>38</td><td>34</td><td>35</td><td>38</td></tr><tr><td>Medicare prescription subsidy</td><td>—</td><td>—</td><td>4</td><td>—</td><td>—</td><td>4</td></tr><tr><td>BENEFIT OBLIGATION AT END OF YEAR</td><td>$1,287</td><td>$1,411</td><td>$1,395</td><td>$1,093</td><td>$1,203</td><td>$1,198</td></tr><tr><td>CHANGE IN PLAN ASSETS</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$1,084</td><td>$1,113</td><td>$1,047</td><td>$950</td><td>$977</td><td>$922</td></tr><tr><td>Actual return on plan assets</td><td>-6</td><td>59</td><td>153</td><td>-4</td><td>54</td><td>134</td></tr><tr><td>Employer contributions</td><td>6</td><td>7</td><td>9</td><td>6</td><td>7</td><td>9</td></tr><tr><td>EGWP payments</td><td>28</td><td>12</td><td>8</td><td>26</td><td>11</td><td>7</td></tr><tr><td>Participant contributions</td><td>35</td><td>36</td><td>38</td><td>34</td><td>35</td><td>38</td></tr><tr><td>Benefits paid</td><td>-153</td><td>-143</td><td>-142</td><td>-142</td><td>-134</td><td>-133</td></tr><tr><td>FAIR VALUE OF PLAN ASSETS AT END OF YEAR</td><td>$994</td><td>$1,084</td><td>$1,113</td><td>$870</td><td>$950</td><td>$977</td></tr><tr><td>FUNDED STATUS</td><td>$-293</td><td>$-327</td><td>$-282</td><td>$-223</td><td>$-253</td><td>$-221</td></tr><tr><td>Unrecognized net loss</td><td>$28</td><td>$78</td><td>$70</td><td>$4</td><td>$45</td><td>$54</td></tr><tr><td>Unrecognized prior service costs</td><td>-51</td><td>-71</td><td>-78</td><td>-32</td><td>-46</td><td>-61</td></tr></table>
The decrease in the other postretirement benefit plan obligation (due primarily to increased discount rates) was the primary cause of the decreased liability for other postretirement benefits at Con Edison and CECONY of $34 million and $30 million, respectively, compared with December 31, 2014. For Con Edison, this decreased liability corresponds with an increase to regulatory liabilities of $30 million for unrecognized net losses and unrecognized prior service costs associated with the Utilities consistent with the accounting rules for regulated operations, and an immaterial change to OCI (net of taxes) for the unrecognized net losses and a credit to OCI of $1 million (net of taxes) for the unrecognized prior service costs associated with the competitive energy businesses and O&R’s New Jersey subsidiary. For CECONY, the decrease in liability corresponds with an increase to regulatory liabilities of $27 million for unrecognized net losses and unrecognized prior service costs associated with the company consistent with the accounting rules for regulated operations, and an immaterial change to OCI (net of taxes) for the unrecognized net losses and unrecognized prior service costs associated with the competitive energy businesses. A portion of the unrecognized net losses and prior service costs for the other postretirement benefits, equal to $12 million and $(20) million, respectively, will be recognized from accumulated OCI and the regulatory asset into net periodic benefit cost over the next year for Con Edison. Included in these amounts are $10 million and $(14) million, respectively, for CECONY. Assumptions The actuarial assumptions were as follows: FIDELITY NATIONAL INFORMATION SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Future minimum operating lease payments for leases with remaining terms greater than one year for each of the years in the five years ending December 31, 2015, and thereafter in the aggregate, are as follows (in millions):
<table><tr><td>2011</td><td>$65.1</td></tr><tr><td>2012</td><td>47.6</td></tr><tr><td>2013</td><td>35.7</td></tr><tr><td>2014</td><td>27.8</td></tr><tr><td>2015</td><td>24.3</td></tr><tr><td>Thereafter</td><td>78.1</td></tr><tr><td>Total</td><td>$278.6</td></tr></table>
In addition, the Company has operating lease commitments relating to office equipment and computer hardware with annual lease payments of approximately $16.3 million per year which renew on a short-term basis. Rent expense incurred under all operating leases during the years ended December 31, 2010, 2009 and 2008 was $116.1 million, $100.2 million and $117.0 million, respectively. Included in discontinued operations in the Consolidated Statements of Earnings was rent expense of $2.0 million, $1.8 million and $17.0 million for the years ended December 31, 2010, 2009 and 2008, respectively. Data Processing and Maintenance Services Agreements. The Company has agreements with various vendors, which expire between 2011 and 2017, for portions of its computer data processing operations and related functions. The Company’s estimated aggregate contractual obligation remaining under these agreements was approximately $554.3 million as of December 31, 2010. However, this amount could be more or less depending on various factors such as the inflation rate, foreign exchange rates, the introduction of significant new technologies, or changes in the Company’s data processing needs. (16) Employee Benefit Plans Stock Purchase Plan FIS employees participate in an Employee Stock Purchase Plan (ESPP). Eligible employees may voluntarily purchase, at current market prices, shares of FIS’ common stock through payroll deductions. Pursuant to the ESPP, employees may contribute an amount between 3% and 15% of their base salary and certain commissions. Shares purchased are allocated to employees based upon their contributions. The Company contributes varying matching amounts as specified in the ESPP. The Company recorded an expense of $14.3 million, $12.4 million and $14.3 million, respectively, for the years ended December 31, 2010, 2009 and 2008, relating to the participation of FIS employees in the ESPP. Included in discontinued operations in the Consolidated Statements of Earnings was expense of $0.1 million and $3.0 million for the years ended December 31, 2009 and 2008, respectively.401(k) Profit Sharing Plan The Company’s employees are covered by a qualified 401(k) plan. Eligible employees may contribute up to 40% of their pretax annual compensation, up to the amount allowed pursuant to the Internal Revenue Code. The Company generally matches 50% of each dollar of employee contribution up to 6% of the employee’s total eligible compensation. The Company recorded expense of $23.1 million, $16.6 million and $18.5 million, respectively, for the years ended December 31, 2010, 2009 and 2008, relating to the participation of FIS employees in the 401(k) plan. Included in discontinued operations in the Consolidated Statements of Earnings was expense of $0.1 million and $3.9 million for the years ended December 31, 2009 and 2008, respectively The following table presents a reconciliation of net cash provided by operating activities to free cash flow available to News Corporation: |
0.13518 | what is the growth rate in net reserves in 2006? | Development of prior year incurred losses was $135.6 million unfavorable in 2006, $26.4 million favorable in 2005 and $249.4 million unfavorable in 2004. Such losses were the result of the reserve development noted above, as well as inherent uncertainty in establishing loss and LAE reserves. Reserves for Asbestos and Environmental Losses and Loss Adjustment Expenses As of year end 2006, 7.4% of reserves reflect an estimate for the Company’s ultimate liability for A&E claims for which ultimate value cannot be estimated using traditional reserving techniques. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims. See ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asbestos and Environmental Exposures” and Note 3 of Notes to Consolidated Financial Statements. Mt. McKinley’s book of direct A&E exposed insurance is relatively small and homogenous. It also arises from a limited period, effective 1978 to 1984. The book is based principally on excess liability policies, thereby limiting exposure analysis to a limited number of policies and forms. As a result of this focused structure, the Company believes that it is able to comprehensively analyze its exposures, allowing it to identify, analyze and actively monitor those claims which have unusual exposure, including policies in which it may be exposed to pay expenses in addition to policy limits or non-products asbestos claims. The Company endeavors to be actively engaged with every insured account posing significant potential asbestos exposure to Mt. McKinley. Such engagement can take the form of pursuing a final settlement, negotiation, litigation, or the monitoring of claim activity under Settlement in Place (“SIP”) agreements. SIP agreements generally condition an insurer’s payment upon the actual claim experience of the insured and may have annual payment caps or other measures to control the insurer’s payments. The Company’s Mt. McKinley operation is currently managing eight SIP agreements, three of which were executed prior to the acquisition of Mt. McKinley in 2000. The Company’s preference with respect to coverage settlements is to execute settlements that call for a fixed schedule of payments, because such settlements eliminate future uncertainty. The Company has significantly enhanced its classification of insureds by exposure characteristics over time, as well as its analysis by insured for those it considers to be more exposed or active. Those insureds identified as relatively less exposed or active are subject to less rigorous, but still active management, with an emphasis on monitoring those characteristics, which may indicate an increasing exposure or levels of activity. The Company continually focuses on further enhancement of the detailed estimation processes used to evaluate potential exposure of policyholders, including those that may not have reported significant A&E losses. Everest Re’s book of assumed reinsurance is relatively concentrated within a modest number of A&E exposed relationships. It also arises from a limited period, effectively 1977 to 1984. Because the book of business is relatively concentrated and the Company has been managing the A&E exposures for many years, its claim staff is familiar with the ceding companies that have generated most of these liabilities in the past and which are therefore most likely to generate future liabilities. The Company’s claim staff has developed familiarity both with the nature of the business written by its ceding companies and the claims handling and reserving practices of those companies. This level of familiarity enhances the quality of the Company’s analysis of its exposure through those companies. As a result, the Company believes that it can identify those claims on which it has unusual exposure, such as non-products asbestos claims, for concentrated attention. However, in setting reserves for its reinsurance liabilities, the Company relies on claims data supplied, both formally and informally by its ceding companies and brokers. This furnished information is not always timely or accurate and can impact the accuracy and timeliness of the Company’s ultimate loss projections. The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the years ended December 31:
<table><tr><td>(Dollars in millions)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Case reserves reported by ceding companies</td><td>$135.6</td><td>$125.2</td><td>$148.5</td></tr><tr><td>Additional case reserves established by the Company (assumed reinsurance) (1)</td><td>152.1</td><td>157.6</td><td>151.3</td></tr><tr><td>Case reserves established by the Company (direct insurance)</td><td>213.7</td><td>243.5</td><td>272.1</td></tr><tr><td>Incurred but not reported reserves</td><td>148.7</td><td>123.3</td><td>156.4</td></tr><tr><td>Gross reserves</td><td>650.1</td><td>649.6</td><td>728.3</td></tr><tr><td>Reinsurance receivable</td><td>-138.7</td><td>-199.1</td><td>-221.6</td></tr><tr><td>Net reserves</td><td>$511.4</td><td>$450.5</td><td>$506.7</td></tr></table>
(1) Additional reserves are case specific reserves determined by the Company to be needed over and above those reported by the ceding company Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated.
<table><tr><td></td><td colspan="9">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>Current Year</td><td colspan="2">Ratio %/ Pt Change</td><td>Prior Years</td><td colspan="2">Ratio %/ Pt Change</td><td>Total Incurred</td><td colspan="2">Ratio %/ Pt Change</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$899.9</td><td>69.7%</td><td></td><td>$173.6</td><td>13.4%</td><td></td><td>$1,073.5</td><td>83.1%</td><td></td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8%</td><td></td><td>-0.2</td><td>0.0%</td><td></td><td>49.2</td><td>3.8%</td><td></td></tr><tr><td>Total segment</td><td>$949.3</td><td>73.5%</td><td></td><td>$173.4</td><td>13.4%</td><td></td><td>$1,122.7</td><td>86.9%</td><td></td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.1</td><td>12.0%</td><td></td><td>$1,033.2</td><td>81.6%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.2</td><td>12.0%</td><td></td><td>$1,033.3</td><td>81.6%</td><td></td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$786.5</td><td>76.4%</td><td></td><td>$24.9</td><td>2.4%</td><td></td><td>$811.3</td><td>78.8%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$786.5</td><td>76.4%</td><td></td><td>$25.0</td><td>2.4%</td><td></td><td>$811.4</td><td>78.8%</td><td></td></tr><tr><td>Variance 2016/2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$18.7</td><td>0.1</td><td>pts</td><td>$21.5</td><td>1.4</td><td>pts</td><td>$40.3</td><td>1.5</td><td>pts</td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8</td><td>pts</td><td>-0.3</td><td>-</td><td>pts</td><td>$49.1</td><td>3.8</td><td>pts</td></tr><tr><td>Total segment</td><td>$68.1</td><td>3.9</td><td>pts</td><td>$21.2</td><td>1.4</td><td>pts</td><td>$89.4</td><td>5.3</td><td>pts</td></tr><tr><td>Variance 2015/2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td>Catastrophes</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td></tr><tr><td>Total segment</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Incurred losses and LAE increased by 8.7% to $1,122.7 million in 2016 compared to $1,033.3 million in 2015 mainly due to an increase of $49.4 million in current year catastrophe losses, an increase of $21.5 million in prior years’ attritional losses mainly related to run-off construction liability and umbrella program business and an increase of $18.7 million in current year attritional losses primarily related to the impact of the increase in premiums earned. The $49.4 million of current year catastrophe losses in 2016 were due to the 2016 U. S. storms ($30.0 million), Hurricane Matthew ($11.0 million) and the Fort McMurray Canada wildfire ($8.4 million). There were no current year catastrophe losses in 2015. Incurred losses and LAE increased by 27.3% to $1,033.3 million in 2015 compared to $811.4 million in 2014, mainly due to an increase of $127.2 million in prior years’ attritional losses related to run-off umbrella program and construction liability business and an increase of $94.7 million in current year attritional losses related primarily to the impact of the increase in premiums earned. There were no current year catastrophe losses in 2015 and 2014. Segment Expenses. Commission and brokerage increased by 16.5% to $205.3 million in 2016 compared to $176.2 million in 2015. The increase was mainly due to the impact of the increase in premiums earned and changes in the mix of business. Segment other underwriting expenses increased to $176.8 million in 2016 compared to $136.7 million in 2015. The increase was primarily due to increased expenses due to the build out of our insurance platform. Commission and brokerage increased by 17.7% to $176.2 million in 2015 compared to $149.8 million in 2014. The increase was primarily driven by the impact of the increase in premiums earned and the change in the mix of business. Segment other underwriting expenses increased to $136.7 million in 2015 compared to $118.0 million in 2014. The increase was primarily due to the impact of the increase in premiums earned and increased focus on insurance operations resulting in increased operating expenses, including new hires. properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure. Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves and such variation could have a material adverse effect on our financial condition, results of operations and/or cash flows. See also ITEM 8, “Financial Statements and Supplementary Data” - Notes 1 and 3 of Notes to the Consolidated Financial Statements. Reinsurance Receivables. We have purchased reinsurance to reduce our exposure to adverse claim experience, large claims and catastrophic loss occurrences. Our ceded reinsurance provides for recovery from reinsurers of a portion of losses and loss expenses under certain circumstances. Such reinsurance does not relieve us of our obligation to our policyholders. In the event our reinsurers are unable to meet their obligations under these agreements or are able to successfully challenge losses ceded by us under the contracts, we will not be able to realize the full value of the reinsurance receivable balance. To minimize exposure from uncollectible reinsurance receivables, we have a reinsurance security committee that evaluates the financial strength of each reinsurer prior to our entering into a reinsurance arrangement. In some cases, we may hold full or partial collateral for the receivable, including letters of credit, trust assets and cash. Additionally, creditworthy foreign reinsurers of business written in the U. S. , as well as capital markets’ reinsurance mechanisms, are generally required to secure their obligations. We have established reserves for uncollectible balances based on our assessment of the collectability of the outstanding balances. As of December 31, 2016 and 2015, the reserve for uncollectible balances was $15.0 million. Actual uncollectible amounts may vary, perhaps substantially, from such reserves, impacting income (loss) in the period in which the change in reserves is made. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 11 of Notes to the Consolidated Financial Statements and “Financial Condition – Reinsurance Receivables” below. Premiums Written and Earned. Premiums written by us are earned ratably over the coverage periods of the related insurance and reinsurance contracts. We establish unearned premium reserves to cover the unexpired portion of each contract. Such reserves, for assumed reinsurance, are computed using pro rata methods based on statistical data received from ceding companies. Premiums earned, and the related costs, which have not yet been reported to us, are estimated and accrued. Because of the inherent lag in the reporting of written and earned premiums by our ceding companies, we use standard accepted actuarial methodologies to estimate earned but not reported premium at each financial reporting date. These earned but not reported premiums are combined with reported earned premiums to comprise our total premiums earned for determination of our incurred losses and loss and LAE reserves. Commission expense and incurred losses related to the change in earned but not reported premium are included in current period company and segment financial results. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements. The following table displays the estimated components of net earned but not reported premiums by segment for the periods indicated.
<table><tr><td></td><td colspan="3">At December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>U.S. Reinsurance</td><td>$385.5</td><td>$372.5</td><td>$388.3</td></tr><tr><td>International</td><td>235.4</td><td>243.9</td><td>239.8</td></tr><tr><td>Bermuda</td><td>258.4</td><td>253.4</td><td>208.4</td></tr><tr><td>Total</td><td>$879.3</td><td>$869.8</td><td>$836.5</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table> |
0.42996 | What's the growth rate of Net income of the Fourth Quarter in 2016? | The tax rate for fiscal 2019 was below the U. S. statutory tax rate of 21% partially due to lower statutory tax rates applicable to our operations in the foreign jurisdictions from which we earn income and tax incentives such as the foreign derived intangible income deduction and research and development tax credits. These items are partially offset by the global intangible low-tax income (GILTI) tax. The tax rate for f fiscal 2019 includes a $17.2 million tax benefit from a voluntary accounting policy change in the statutory statements of a foreign f subsidiary, an $11.2 million tax benefit from an increase in tax credits upon filing our fiscal 2018 federal income tax return and excess tax benefits from stock-based compensation payments of $28.7 million. Similarly, our tax rate for fiscal 2018 was below our then blended U. S. federal statutory tax rate of 23.4%, primarily due to lower statutory tax rates applicable to our operations in the foreign jurisdictions in which we earn income and $25.6 million of tax benefit related to the release of uncertain tax positions due to laapses in statute of limitations. In addition, our effective tax rate for fiscal f 2018 includes a provisional estimate for f a discrete tax benefit of $637.0 million from remeasuring our U. S. deferred tax assets and liaabilities at the lower 21.0% U. S. federal statutory tax rate and a provisional estimate of $691.0 million for the discrete tax charge from the Tax Legislation’s one-time transition tax associated with our undistributed foreign earnings, which is comprised of a $755.0 million transitional tax less a deferred tax liability of $64.0 million that was recorded in prior years and excess tax benefits from stock-based compensation payments of $26.2 million. Non-U. S. jurisdictions accounted for approximately 75.9% of our total revenues for both fiscal 2019 and fiscal 2018. This revenue generated outside of the U. S. results in a material portion of our pretax income being taxed outside the U. S. In fiscal 2019, this was primarily in Ireland and Singapore, at tax rates ranging from 12.5% to 17% and in fiscal 2018, this was primarily in Bermuda, Ireland and Singapore, at tax rates ranging from 0 to 33.3%. The impact on our provision for income taxes on income earned in fforeign jurisdictions being taxed at rates different than the U. S. federal statutory rate was a benefit of approximately $242.9 million and a fforeign effective tax rate of approximately 21.1% for fiscal 2019 as compared to a benefit of approximately $420.8 million and a fforeign effective tax rate of approximately 5.2% for fiscal 2018. Our foreign effective tax rates for both periods are inclusive of certain non-deductible expenses which can result in tax rates higher than the applicable statutory tax rates. In addition, our effective income tax rate can be impacted each year by amounts for discrete factors or events and acquisition-related accounting adjustments. See Note 12, Income Taxes, of the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K for further discussion. Net Income
<table><tr><td></td><td></td><td></td><td></td><td colspan="4">Change</td><td></td></tr><tr><td></td><td colspan="3">Fiscal Year</td><td></td><td></td><td colspan="2">2019 over 2018</td><td>2018 over 2017</td></tr><tr><td></td><td>2019</td><td>2018 -1</td><td>2017 -1</td><td>$ Change</td><td>% Change</td><td>$ Change</td><td>% Change</td><td></td></tr><tr><td>Net income</td><td>$1,363,011</td><td>$1,506,980</td><td>$805,379</td><td>$-143,969</td><td>-10%</td><td>$701,601</td><td>87%</td><td></td></tr><tr><td>Net income, as a % of revenue</td><td>22.8%</td><td>24.2%</td><td>15.4%</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Diluted EPS</td><td>$3.65</td><td>$4.00</td><td>$2.29</td><td>$-0.35</td><td>-9%</td><td>$1.71</td><td>75%</td><td></td></tr></table>
(1) Balances have been restated to reflect the adoption of ASU 2014-09. See Note 2a, Principles of Consolidation, in the Notes to Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K. The decrease in net income in fiscal 2019 as compared to fiscal 2018 was a result of a $189.0 million decrease in operating income, partially offset by a $25.6 million decrease in provision for income taxes and a $19.4 million decrease in nonoperating expense. The increase in net income in fiscal 2018 as compared to fiscal 2017 was a result of a $736.8 million increase in operating income, partially offset by a $19.0 million increase in provision for income taxes and a $16.3 increase in nonoperating expense. The impact of inflation and foreign currency exchange rate movement on our results of operations during the past three fiscal years has not been significant. Table XII Selected Quarterly Financial Data
<table><tr><td></td><td colspan="4">2016 Quarters</td><td colspan="4">2015 Quarters</td></tr><tr><td>(In millions, except per share information)</td><td>Fourth</td><td>Third</td><td>Second</td><td>First</td><td>Fourth</td><td>Third</td><td>Second</td><td>First</td></tr><tr><td>Income statement</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$10,292</td><td>$10,201</td><td>$10,118</td><td>$10,485</td><td>$9,686</td><td>$9,900</td><td>$9,517</td><td>$9,855</td></tr><tr><td>Noninterest income</td><td>9,698</td><td>11,434</td><td>11,168</td><td>10,305</td><td>9,896</td><td>11,092</td><td>11,523</td><td>11,496</td></tr><tr><td>Total revenue, net of interest expense</td><td>19,990</td><td>21,635</td><td>21,286</td><td>20,790</td><td>19,582</td><td>20,992</td><td>21,040</td><td>21,351</td></tr><tr><td>Provision for credit losses</td><td>774</td><td>850</td><td>976</td><td>997</td><td>810</td><td>806</td><td>780</td><td>765</td></tr><tr><td>Noninterest expense</td><td>13,161</td><td>13,481</td><td>13,493</td><td>14,816</td><td>14,010</td><td>13,939</td><td>13,959</td><td>15,826</td></tr><tr><td>Income before income taxes</td><td>6,055</td><td>7,304</td><td>6,817</td><td>4,977</td><td>4,762</td><td>6,247</td><td>6,301</td><td>4,760</td></tr><tr><td>Income tax expense</td><td>1,359</td><td>2,349</td><td>2,034</td><td>1,505</td><td>1,478</td><td>1,628</td><td>1,736</td><td>1,392</td></tr><tr><td>Net income</td><td>4,696</td><td>4,955</td><td>4,783</td><td>3,472</td><td>3,284</td><td>4,619</td><td>4,565</td><td>3,368</td></tr><tr><td>Net income applicable to common shareholders</td><td>4,335</td><td>4,452</td><td>4,422</td><td>3,015</td><td>2,954</td><td>4,178</td><td>4,235</td><td>2,986</td></tr><tr><td>Average common shares issued and outstanding</td><td>10,170</td><td>10,250</td><td>10,328</td><td>10,370</td><td>10,399</td><td>10,444</td><td>10,488</td><td>10,519</td></tr><tr><td>Average diluted common shares issued and outstanding</td><td>10,959</td><td>11,000</td><td>11,059</td><td>11,100</td><td>11,153</td><td>11,197</td><td>11,238</td><td>11,267</td></tr><tr><td>Performance ratios</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average assets</td><td>0.85%</td><td>0.90%</td><td>0.88%</td><td>0.64%</td><td>0.60%</td><td>0.84%</td><td>0.85%</td><td>0.64%</td></tr><tr><td>Four quarter trailing return on average assets<sup>-1</sup></td><td>0.82</td><td>0.76</td><td>0.74</td><td>0.73</td><td>0.73</td><td>0.74</td><td>0.52</td><td>0.42</td></tr><tr><td>Return on average common shareholders’ equity</td><td>7.04</td><td>7.27</td><td>7.40</td><td>5.11</td><td>4.99</td><td>7.16</td><td>7.43</td><td>5.37</td></tr><tr><td>Return on average tangible common shareholders’ equity<sup>-2</sup></td><td>9.92</td><td>10.28</td><td>10.54</td><td>7.33</td><td>7.19</td><td>10.40</td><td>10.85</td><td>7.91</td></tr><tr><td>Return on average shareholders' equity</td><td>6.91</td><td>7.33</td><td>7.25</td><td>5.36</td><td>5.07</td><td>7.22</td><td>7.29</td><td>5.55</td></tr><tr><td>Return on average tangible shareholders’ equity<sup>-2</sup></td><td>9.38</td><td>9.98</td><td>9.93</td><td>7.40</td><td>7.04</td><td>10.08</td><td>10.24</td><td>7.87</td></tr><tr><td>Total ending equity to total ending assets</td><td>12.20</td><td>12.30</td><td>12.23</td><td>12.03</td><td>11.95</td><td>11.88</td><td>11.70</td><td>11.68</td></tr><tr><td>Total average equity to total average assets</td><td>12.24</td><td>12.28</td><td>12.13</td><td>11.98</td><td>11.79</td><td>11.70</td><td>11.67</td><td>11.50</td></tr><tr><td>Dividend payout</td><td>17.68</td><td>17.32</td><td>11.73</td><td>17.13</td><td>17.57</td><td>12.48</td><td>12.36</td><td>17.62</td></tr><tr><td>Per common share data</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Earnings</td><td>$0.43</td><td>$0.43</td><td>$0.43</td><td>$0.29</td><td>$0.28</td><td>$0.40</td><td>$0.40</td><td>$0.28</td></tr><tr><td>Diluted earnings</td><td>0.40</td><td>0.41</td><td>0.41</td><td>0.28</td><td>0.27</td><td>0.38</td><td>0.38</td><td>0.27</td></tr><tr><td>Dividends paid</td><td>0.075</td><td>0.075</td><td>0.05</td><td>0.05</td><td>0.05</td><td>0.05</td><td>0.05</td><td>0.05</td></tr><tr><td>Book value</td><td>24.04</td><td>24.19</td><td>23.71</td><td>23.14</td><td>22.53</td><td>22.40</td><td>21.89</td><td>21.67</td></tr><tr><td>Tangible book value<sup>-2</sup></td><td>16.95</td><td>17.14</td><td>16.71</td><td>16.19</td><td>15.62</td><td>15.50</td><td>15.00</td><td>14.80</td></tr><tr><td>Market price per share of common stock</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Closing</td><td>$22.10</td><td>$15.65</td><td>$13.27</td><td>$13.52</td><td>$16.83</td><td>$15.58</td><td>$17.02</td><td>$15.39</td></tr><tr><td>High closing</td><td>23.16</td><td>16.19</td><td>15.11</td><td>16.43</td><td>17.95</td><td>18.45</td><td>17.67</td><td>17.90</td></tr><tr><td>Low closing</td><td>15.63</td><td>12.74</td><td>12.18</td><td>11.16</td><td>15.38</td><td>15.26</td><td>15.41</td><td>15.15</td></tr><tr><td>Market capitalization</td><td>$222,163</td><td>$158,438</td><td>$135,577</td><td>$139,427</td><td>$174,700</td><td>$162,457</td><td>$178,231</td><td>$161,909</td></tr></table>
(1) Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters. (2) Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios, see Supplemental Financial Data on page 26, and for corresponding reconciliations to GAAP financial measures, see Statistical Table XVI. (3) For more information on the impact of the PCI loan portfolio on asset quality, see Consumer Portfolio Credit Risk Management on page 55. (4) Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments. (5) Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 63 and corresponding Table 30, and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 69 and corresponding Table 37. (6) Asset quality metrics as of December 31, 2016 include $243 million of non-U. S. credit card allowance for loan and lease losses and $9.2 billion of non-U. S. credit card loans, which are included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016. (7) Primarily includes amounts allocated to the U. S. credit card and unsecured consumer lending portfolios in Consumer Banking, PCI loans and the non-U. S. credit card portfolio in All Other. (8) Net charge-offs exclude $70 million, $83 million, $82 million and $105 million of write-offs in the PCI loan portfolio in the fourth, third, second and first quarters of 2016, respectively, and $82 million, $148 million, $290 million and $288 million in the fourth, third, second and first quarters of 2015, respectively. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management – Purchased Credit-impaired Loan Portfolio on page 61. (9) Risk-based capital ratios are reported under Basel 3 Advanced - Transition beginning in the fourth quarter of 2015. Prior to fourth quarter of 2015, we were required to report risk-based capital ratios under Basel 3 Standardized - Transition only. For additional information, see Capital Management on page 44. FUTURE MINIMUM LEASE OBLIGATIONS
<table><tr><td></td><td colspan="2">As of February 28, 2010</td></tr><tr><td>(In thousands)</td><td>Capital Leases -1</td><td>Operating Lease Commitments-1</td></tr><tr><td>Fiscal 2011</td><td>$3,608</td><td>$82,832</td></tr><tr><td>Fiscal 2012</td><td>3,608</td><td>82,788</td></tr><tr><td>Fiscal 2013</td><td>3,608</td><td>82,688</td></tr><tr><td>Fiscal 2014</td><td>3,643</td><td>83,026</td></tr><tr><td>Fiscal 2015</td><td>3,884</td><td>83,041</td></tr><tr><td>Fiscal 2016 and thereafter</td><td>37,056</td><td>557,452</td></tr><tr><td>Total minimum lease payments</td><td>55,407</td><td>$971,827</td></tr><tr><td>Less amounts representing interest</td><td>-27,319</td><td></td></tr><tr><td>Present value of net minimum capital lease payments</td><td>$28,088</td><td></td></tr></table>
(1) Excludes taxes, insurance and other costs payable directly by us. These costs vary from year to year and are incurred in the ordinary course of business. We did not enter into any sale-leaseback transactions in fiscal 2010 or fiscal 2008. We completed sale-leaseback transactions involving two superstores valued at approximately $31.3 million in fiscal 2009. All sale-leaseback transactions are structured at competitive rates. Gains or losses on sale-leaseback transactions are recorded as deferred rent and amortized over the lease term. Other than occupancy, we do not have continuing involvement under the sale-leaseback transactions. In conjunction with certain sale-leaseback transactions, we must meet financial covenants relating to minimum tangible net worth and minimum coverage of rent expense. We were in compliance with all such covenants as of February 28, 2010.15. SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION (A) Goodwill and Other Intangibles Other assets included goodwill and other intangibles with a carrying value of $10.1 million as of February 28, 2010, and February 28, 2009. No impairment of goodwill or intangible assets resulted from our annual impairment tests in fiscal 2010, fiscal 2009 or fiscal 2008. (B) Restricted Investments Restricted investments, included in other assets, consisted of $30.7 million in money market securities as of February 28, 2010, and $28.5 million in money market securities and $2.2 million in other debt securities as of February 28, 2009. For fiscal 2010, proceeds from the sales of other debt securities totaled $2.2 million. For fiscal 2009, there were no proceeds from the sales of other debt securities. Due to the short-term nature and/or variable rates associated with these financial instruments, the carrying value approximates fair value. (C) Other Accrued Expenses As of February 28, 2010 and 2009, accrued expenses and other current liabilities included accrued compensation and benefits of $62.1 million and $24.3 million, respectively, and loss reserves for general liability and workers’ compensation insurance of $23.9 million and $22.2 million, respectively. (D) Advertising Expense SG&A expenses included advertising expense of $75.1 million in fiscal 2010, $101.5 million in fiscal 2009 and $108.8 million in fiscal 2008. Advertising expenses were 1.0% of net sales and operating revenues for fiscal 2010, 1.5% for fiscal 2009 and 1.3% for fiscal year 2008.16. CONTINGENT LIABILITIES (A) Litigation On April 2, 2008, Mr. John Fowler filed a putative class action lawsuit against CarMax Auto Superstores California, LLC and CarMax Auto Superstores West Coast, Inc. in the Superior Court of California, County of Los Angeles. Subsequently, two other lawsuits, Leena Areso et al. v. CarMax Auto Superstores California, LLC and Justin Weaver v. CarMax Auto Superstores California, LLC, were consolidated as part of the Fowler case. The allegations FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Selected cash flows for the years ended December 31, 2014, 2013, and 2012 are as follows (in millions): |
10,913 | What is the total amount of Net sales of 2012, Commercial paper of 2010 Fair Value, and U.S. government and agency securities of 2011 Fair Value ? | Aeronautics’ operating profit for 2012 increased $69 million, or 4%, compared to 2011. The increase was attributable to higher operating profit of approximately $105 million from C-130 programs due to an increase in risk retirements; about $50 million from F-16 programs due to higher aircraft deliveries partially offset by a decline in risk retirements; approximately $50 million from F-35 production contracts due to increased production volume and risk retirements; and about $50 million from the completion of purchased intangible asset amortization on certain F-16 contracts. Partially offsetting the increases was lower operating profit of about $90 million from the F-35 development contract primarily due to the inception-to-date effect of reducing the profit booking rate in the second quarter of 2012; approximately $50 million from decreased production volume and risk retirements on the F-22 program partially offset by a resolution of a contractual matter in the second quarter of 2012; and approximately $45 million primarily due to a decrease in risk retirements on other sustainment activities partially offset by various other Aeronautics programs due to increased risk retirements and volume. Operating profit for C-5 programs was comparable to 2011. Adjustments not related to volume, including net profit booking rate adjustments and other matters described above, were approximately $30 million lower for 2012 compared to 2011. Backlog Backlog decreased in 2013 compared to 2012 mainly due to lower orders on F-16, C-5, and C-130 programs, partially offset by higher orders on the F-35 program. Backlog decreased in 2012 compared to 2011 mainly due to lower orders on F-35 and C-130 programs, partially offset by higher orders on F-16 programs. Trends We expect Aeronautics’ net sales to increase in 2014 in the mid-single digit percentage range as compared to 2013 primarily due to an increase in net sales from F-35 production contracts. Operating profit is expected to increase slightly from 2013, resulting in a slight decrease in operating margins between the years due to program mix. Information Systems & Global Solutions Our IS&GS business segment provides advanced technology systems and expertise, integrated information technology solutions, and management services across a broad spectrum of applications for civil, defense, intelligence, and other government customers. IS&GS has a portfolio of many smaller contracts as compared to our other business segments. IS&GS has been impacted by the continued downturn in federal information technology budgets. IS&GS’ operating results included the following (in millions):
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Net sales</td><td>$8,367</td><td>$8,846</td><td>$9,381</td></tr><tr><td>Operating profit</td><td>759</td><td>808</td><td>874</td></tr><tr><td>Operating margins</td><td>9.1%</td><td>9.1%</td><td>9.3%</td></tr><tr><td>Backlog at year-end</td><td>8,300</td><td>8,700</td><td>9,300</td></tr></table>
2013 compared to 2012 IS&GS’ net sales decreased $479 million, or 5%, for 2013 compared to 2012. The decrease was attributable to lower net sales of about $495 million due to decreased volume on various programs (command and control programs for classified customers, NGI, and ERAM programs); and approximately $320 million due to the completion of certain programs (such as Total Information Processing Support Services, the Transportation Worker Identification Credential (TWIC), and ODIN). The decrease was partially offset by higher net sales of about $340 million due to the start-up of certain programs (such as the DISA GSM-O and the National Science Foundation Antarctic Support). IS&GS’ operating profit decreased $49 million, or 6%, for 2013 compared to 2012. The decrease was primarily attributable to lower operating profit of about $55 million due to certain programs nearing the end of their lifecycles, partially offset by higher operating profit of approximately $15 million due to the start-up of certain programs. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were comparable for 2013 compared to 2012.2012 compared to 2011 IS&GS’ net sales for 2012 decreased $535 million, or 6%, compared to 2011. The decrease was attributable to lower net sales of approximately $485 million due to the substantial completion of various programs during 2011 (primarily JTRS; ODIN; and U. K. Census); and about $255 million due to lower volume on numerous other programs (primarily Hanford; The table below provides information on the location and pretax gain or loss amounts for derivatives that are: (i) designated in a fair value hedging relationship, (ii) designated in a cash flow hedging relationship, (iii) designated in a foreign currency net investment hedging relationship and (iv) not designated in a hedging relationship
<table><tr><td><i>Years Ended December 31</i></td><td>2011</td><td>2010</td></tr><tr><td><i>Derivatives designated in fair value hedging relationships</i></td><td></td><td></td></tr><tr><td>Interest rate swap contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>on derivatives</td><td>$-196</td><td>$-23</td></tr><tr><td>Amount of loss recognized in<i>Other (income) expense, net</i>on hedged item</td><td>196</td><td>23</td></tr><tr><td><i>Derivatives designated in foreign currency cash flow hedging relationships</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of loss reclassified from<i>AOCI</i>to<i>Sales</i></td><td>85</td><td>7</td></tr><tr><td>Amount of loss (gain) recognized in<i>OCI</i>on derivatives</td><td>143</td><td>-103</td></tr><tr><td><i>Derivatives designated in foreign currency net investment hedging relationships</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>onderivatives<i><sup>(1)</sup></i></td><td>-10</td><td>-1</td></tr><tr><td>Amount of loss recognized in<i>OCI</i>on deriviatives</td><td>122</td><td>24</td></tr><tr><td><i>Derivatives not designated in a hedging relationship</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>onderivatives<i><sup>(2)</sup></i></td><td>-113</td><td>-33</td></tr><tr><td>Amount of gain recognized in<i>Sales</i></td><td>—</td><td>-81</td></tr></table>
(1) There was no ineffectiveness on the hedge. Represents the amount excluded from hedge effectiveness testing. (2) These derivative contracts mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. At December 31, 2011, the Company estimates $18 million of pretax net unrealized losses on derivatives maturing within the next 12 months that hedge foreign currency denominated sales over that same period will be reclassified from AOCI to Sales. The amount ultimately reclassified to Sales may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity. Investments in Debt and Equity Securities Information on available-for-sale investments at December 31 is as follows:
<table><tr><td></td><td colspan="4"> 2011</td><td colspan="4">2010</td></tr><tr><td></td><td></td><td></td><td colspan="2"> Gross Unrealized</td><td></td><td></td><td colspan="2">Gross Unrealized</td></tr><tr><td></td><td> Fair Value</td><td> Amortized Cost</td><td> Gains</td><td> Losses</td><td>Fair Value</td><td>Amortized Cost</td><td>Gains</td><td>Losses</td></tr><tr><td>Corporate notes and bonds</td><td>$2,032</td><td>$2,024</td><td>$16</td><td>$-8</td><td>$1,133</td><td>$1,124</td><td>$12</td><td>$-3</td></tr><tr><td>Commercial paper</td><td>1,029</td><td>1,029</td><td>—</td><td>—</td><td>1,046</td><td>1,046</td><td>—</td><td>—</td></tr><tr><td>U.S. government and agency securities</td><td>1,021</td><td>1,018</td><td>3</td><td>—</td><td>500</td><td>501</td><td>1</td><td>-2</td></tr><tr><td>Municipal securities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>361</td><td>359</td><td>4</td><td>-2</td></tr><tr><td>Asset-backed securities</td><td>292</td><td>292</td><td>1</td><td>-1</td><td>171</td><td>170</td><td>1</td><td>—</td></tr><tr><td>Mortgage-backed securities</td><td>223</td><td>223</td><td>1</td><td>-1</td><td>112</td><td>108</td><td>5</td><td>-1</td></tr><tr><td>Foreign government bonds</td><td>72</td><td>72</td><td>—</td><td>—</td><td>10</td><td>10</td><td>—</td><td>—</td></tr><tr><td>Other debt securities</td><td>3</td><td>1</td><td>2</td><td>—</td><td>3</td><td>1</td><td>2</td><td>—</td></tr><tr><td>Equity securities</td><td>397</td><td>383</td><td>14</td><td>—</td><td>321</td><td>295</td><td>34</td><td>-8</td></tr><tr><td></td><td>$5,069</td><td>$5,042</td><td>$37</td><td>$-10</td><td>$3,657</td><td>$3,614</td><td>$59</td><td>$-16</td></tr></table>
Available-for-sale debt securities included in Short-term investments totaled $1.4 billion at December 31, 2011. Of the remaining debt securities, $2.9 billion mature within five years. At December 31, 2011, there were no debt securities pledged as collateral. The table below provides a summary of the changes in fair value of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
<table><tr><td><i>Years Ended December 31</i></td><td>2011</td><td>2010</td></tr><tr><td>Beginning balance January 1</td><td>$13</td><td>$72</td></tr><tr><td>Sales</td><td>-13</td><td>-67</td></tr><tr><td>Total realized and unrealized gains (losses)Included in:</td><td></td><td></td></tr><tr><td>Earnings<i><sup>-1</sup></i></td><td>—</td><td>18</td></tr><tr><td>Comprehensive income</td><td>—</td><td>-10</td></tr><tr><td>Ending balance December 31</td><td>$—</td><td>$13</td></tr><tr><td>Losses recorded in earnings for Level 3 assets still held atDecember 31</td><td>$—</td><td>$—</td></tr></table>
(1) Amounts are recorded in Other (income) expense, net. Financial Instruments Not Measured at Fair Value Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables. The estimated fair value of loans payable and long-term debt (including current portion) at December 31, 2011 was $19.5 billion compared with a carrying value of $17.5 billion and at December 31, 2010 was $18.7 billion compared with a carrying value of $17.9 billion. Fair value was estimated using quoted dealer prices. Concentrations of Credit Risk On an ongoing basis, the Company monitors concentrations of credit risk associated with corporate and government issuers of securities and financial institutions with which it conducts business. Credit exposure limits are established to limit a concentration with any single issuer or institution. Cash and investments are placed in instruments that meet high credit quality standards, as specified in the Company’s investment policy guidelines. Approximately three-quarters of the Company’s cash and cash equivalents are invested in three highly rated money market funds. The majority of the Company’s accounts receivable arise from product sales in the United States and Europe and are primarily due from drug wholesalers and retailers, hospitals, government agencies, managed health care providers and pharmacy benefit managers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. The Company also continues to monitor economic conditions, including the volatility associated with international sovereign economies, and associated impacts on the financial markets and its business, taking into consideration the global economic downturn and the sovereign debt issues in certain European countries. The Company continues to monitor the credit and economic conditions within Greece, Spain, Italy and Portugal, among other members of the EU. These deteriorating economic conditions, as well as inherent variability of timing of cash receipts, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect accounts receivable outstanding. As such, time value of money discounts have been recorded for those customers for which collection of accounts receivable is expected to be in excess of one year. The Company does not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on its financial position, liquidity or results of operations. As of December 31, 2011, the Company’s accounts receivable in Greece, Italy, Spain and Portugal totaled approximately $1.6 billion. Of this amount, hospital and public sector receivables were approximately $1.1 billion in the aggregate, of which approximately 8%, 36%, 47% and 9% related to Greece, Italy, Spain and Portugal, respectively. As of December 31, 2011, the Company’s total accounts receivable outstanding for more than one year were approximately $400 million, of which approximately 90% related to accounts receivable in Greece, Italy, Spain and Portugal, mostly comprised of hospital and public sector receivables. Other Animal Health Animal Health includes pharmaceutical and vaccine products for the prevention, treatment and control of disease in all major farm and companion animal species. Animal Health sales are affected by intense competition and the frequent introduction of generic products. Global sales of Animal Health products grew 11% in 2011 to $3.3 billion from $2.9 billion in 2010. Foreign exchange favorably affected global sales performance by 3% in 2011. The increase in sales was driven by positive performance among cattle, swine, poultry and companion animal products. Global sales of Animal Health products were $494 million for the post-Merger period in 2009. Consumer Care Consumer Care products include over-the-counter, foot care and sun care products such as Claritin non-drowsy antihistamines; Dr. Scholl’s foot care products; Coppertone sun care products; and MiraLAX, a treatment for occasional constipation. Global sales of Consumer Care products increased 1% in 2011 to $1.8 billion reflecting strong performance of Coppertone, offset by declines in Dr. Scholl’s and Claritin. Consumer Care product sales were $149 million for the post-Merger period in 2009. Consumer Care product sales are affected by competition and consumer spending patterns. Alliances AstraZeneca has an option to buy Merck’s interest in a subsidiary, and through it, Merck’s interest in Nexium and Prilosec, exercisable in 2012, and the Company believes that it is likely that AstraZeneca will exercise that option (see “Selected Joint Venture and Affiliate Information” below). If AstraZeneca exercises its option, the Company will no longer record equity income from AZLP and supply sales to AZLP will decline substantially. |
68.306 | what is the total value of rsus converted to bhge rsus , in millions? | Supplemental Financial Data We view net interest income and related ratios and analyses (i. e. , efficiency ratio and net interest yield) on a FTE basis. Although these are non-GAAP measures, we believe managing the business with net interest income on a FTE basis provides a more accurate picture of the interest margin for comparative purposes. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 35 percent. This measure ensures comparability of net interest income arising from taxable and tax-exempt sources. As mentioned above, certain per formance measures including the efficiency ratio and net interest yield utilize net interest income (and thus total revenue) on a FTE basis. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest yield evaluates how many basis points we are earning over the cost of funds. During our annual planning process, we set efficiency targets for the Corporation and each line of business. We believe the use of these non-GAAP measures provides additional clarity in assessing our results. Targets vary by year and by business and are based on a variety of factors including maturity of the business, competitive environment, market factors and other items including our risk appetite. We also evaluate our business based on the following ratios that utilize tangible equity, a non-GAAP measure. Return on average tangible common shareholders’ equity measures our earnings contribution as a percentage of common shareholders’ equity plus any Common Equivalent Securities (CES) less goodwill and intangible assets, (excluding MSRs), net of related deferred tax liabilities. ROTE measures our earnings contribution as a percentage of average shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. The tangible common equity ratio represents common shareholders’ equity plus any CES less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. The tangible equity ratio represents total shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by total assets less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities. Tangible book value per common share represents ending common shareholders’ equity less goodwill and intangible assets (excluding MSRs), net of related deferred tax liabilities divided by ending common shares outstanding plus the number of common shares issued upon conversion of common equivalent shares. These measures are used to evaluate our use of equity (i. e. , capital). In addition, profitability, relationship and investment models all use ROTE as key measures to support our overall growth goals. The aforementioned supplemental data and per formance measures are presented in Tables 6 and 7 and Statistical Tables XII and XIV. In addition, in Table 7 and Statistical Table XIV, we have excluded the impact of goodwill impairment charges of $12.4 billion recorded in 2010 when presenting earnings and diluted earnings per common share, the efficiency ratio, return on average assets, return on average common shareholders’ equity, return on average tangible common shareholders’ equity and ROTE. Accordingly, these are non-GAAP measures. Statistical Tables XIII and XV provide reconciliations of these non-GAAP measures with financial measures defined by GAAP. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate these measures and ratios differently
<table><tr><td>(Dollars in millions, except per share information)</td><td>2010</td><td>2009</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td> Fully taxable-equivalent basis data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest income</td><td>$52,693</td><td>$48,410</td><td>$46,554</td><td>$36,190</td><td>$35,818</td></tr><tr><td>Total revenue, net of interest expense</td><td>111,390</td><td>120,944</td><td>73,976</td><td>68,582</td><td>74,000</td></tr><tr><td>Net interest yield<sup>-1</sup></td><td>2.78%</td><td>2.65%</td><td>2.98%</td><td>2.60%</td><td>2.82%</td></tr><tr><td>Efficiency ratio</td><td>74.61</td><td>55.16</td><td>56.14</td><td>54.71</td><td>48.37</td></tr><tr><td> Performance ratios, excluding goodwill impairment charges<sup>-2</sup></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Per common share information</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Earnings</td><td>$0.87</td><td></td><td></td><td></td><td></td></tr><tr><td>Diluted earnings</td><td>0.86</td><td></td><td></td><td></td><td></td></tr><tr><td>Efficiency ratio</td><td>63.48%</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average assets</td><td>0.42</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average common shareholders’ equity</td><td>4.14</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average tangible common shareholders’ equity</td><td>7.03</td><td></td><td></td><td></td><td></td></tr><tr><td>Return on average tangible shareholders’ equity</td><td>7.11</td><td></td><td></td><td></td><td></td></tr></table>
(1) Calculation includes fees earned on overnight deposits placed with the Federal Reserve of $368 million and $379 million for 2010 and 2009. The Corporation did not have fees earned on overnight deposits during 2008, 2007 and 2006. (2) Per formance ratios are calculated excluding the impact of goodwill impairment charges of $12.4 billion recorded during 2010. Baker Hughes, a GE company Notes to Consolidated and Combined Financial Statements issuance pursuant to awards granted under the LTI Plan over its term which expires on the date of the annual meeting of the Company in 2027. A total of 53.7 million shares of Class A common stock are available for issuance as of December 31, 2017. As a result of the acquisition of Baker Hughes, on July 3, 2017, each outstanding Baker Hughes stock option was converted into an option to purchase a share of Class A common stock in the Company. Consequently, we issued 6.8 million stock options which are fully vested. Each converted option is subject to the same terms and conditions as applied to the original option, and the per share exercise price of each converted option was reduced by $17.50 to reflect the per share amount of the special dividend pursuant to the agreement associated with the Transactions. Additionally, as a result of the acquisition of Baker Hughes, there were 1.7 million Baker Hughes restricted stock units (RSUs) that were converted to BHGE RSUs at a fair value of $40.18. Stock-based compensation cost is measured at the date of grant based on the calculated fair value of the award and is generally recognized on a straight-line basis over the vesting period of the equity grant. The compensation cost is determined based on awards ultimately expected to vest; therefore, we have reduced the cost for estimated forfeitures based on historical forfeiture rates. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods to reflect actual forfeitures. There were no stock-based compensation costs capitalized as the amounts were not material. During the year ended December 31, 2017, we issued 2.1 million RSUs and 1.6 million stock options under the LTI Plan. These RSUs and stock options generally vest in equal amounts over a three-year vesting period provided that the employee has remained continuously employed by the Company through such vesting date. Stock based compensation expense was $37 million in 2017. Included in this amount is $15 million of expense which relates to the acceleration of equity awards upon termination of employment of Baker Hughes employees with change in control agreements, and are included as part of "Merger and related costs" in the consolidated and combined statements of income (loss). As BHGE LLC is a pass through entity, any tax benefit would be recognized by its partners. Due to its cumulative losses, BHGE is unable to recognize a tax benefit on its share of stock related expenses. Stock Options The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The following table presents the weighted average assumptions used in the option pricing model for options granted under the LTI Plan. The expected life of the options represents the period of time the options are expected to be outstanding. The expected life is based on a simple average of the vesting term and original contractual term of the awards. The expected volatility is based on the historical volatility of our five main competitors over a six year period. The risk-free interest rate is based on the observed U. S. Treasury yield curve in effect at the time the options were granted. The dividend yield is based on a five year history of dividend payouts in Baker Hughes.
<table><tr><td></td><td>2017</td></tr><tr><td>Expected life (years)</td><td>6</td></tr><tr><td>Risk-free interest rate</td><td>2.1%</td></tr><tr><td>Volatility</td><td>36.4%</td></tr><tr><td>Dividend yield</td><td>1.2%</td></tr><tr><td>Weighted average fair value per share at grant date</td><td>$12.32</td></tr></table>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Fiscal years ended May 25, 2008, May 27, 2007, and May 28, 2006 Columnar Amounts in Millions Except Per Share Amounts The following table presents estimated future gross benefit payments and Medicare Part D subsidy receipts for the Company’s plans:
<table><tr><td></td><td></td><td colspan="2">Health Care and Life Insurance</td></tr><tr><td></td><td> Pension Benefits</td><td> Benefit Payments</td><td>Subsidy Receipts</td></tr><tr><td>2009</td><td>$125.1</td><td>$44.2</td><td>$-4.3</td></tr><tr><td>2010</td><td>129.2</td><td>45.1</td><td>-4.5</td></tr><tr><td>2011</td><td>133.7</td><td>45.4</td><td>-4.4</td></tr><tr><td>2012</td><td>137.7</td><td>45.2</td><td>-4.3</td></tr><tr><td>2013</td><td>143.3</td><td>43.7</td><td>-4.1</td></tr><tr><td>Succeeding 5 years</td><td>805.6</td><td>196.2</td><td>-18.2</td></tr></table>
Certain employees of the Company are covered under defined contribution plans. The expense related to these plans was $24.4 million, $22.9 million, and $25.9 million in fiscal 2008, 2007, and 2006, respectively.19. RELATED PARTY TRANSACTIONS Sales to affiliates (equity method investees) of $4.2 million, $3.8 million, and $2.9 million for fiscal 2008, 2007, and 2006, respectively, are included in net sales. The Company received management fees from affiliates of $16.3 million, $14.8 million, and $13.5 million in fiscal 2008, 2007, and 2006, respectively. Accounts receivable from affiliates totaled $3.2 million and $2.5 million at May 25, 2008 and May 27, 2007, respectively, of which $3.0 million and $2.1 million are included in current assets held for sale, respectively. Accounts payable to affiliates totaled $15.6 million and $13.5 million at May 25, 2008 and May 27, 2007, respectively. During the first quarter of fiscal 2007, the Company sold an aircraft for proceeds of approximately $8.1 million to a company on whose board of directors one of the Company’s directors sits. The Company recognized a gain of approximately $3.0 million on the transaction. The Company leases various buildings that are beneficially owned by Opus Corporation or entities related to Opus Corporation (the “Opus Entities”). The Opus Entities are affiliates or part of a large, national real estate development company. A former member of the Company’s Board of Directors, who left the board in the second quarter of fiscal 2008, is a beneficial owner, officer and chairman of Opus Corporation, and a director or officer of the related entities. The agreements relate to the leasing of land, buildings, and equipment for the Company in Omaha, Nebraska. The Company occupies the buildings pursuant to long-term leases with Opus Corporation and other investors, and the leases contain various termination rights and purchase options. The Company made rental payments of $13.5 million, $14.4 million, and $15.8 million in fiscal 2008, 2007, and 2006, respectively, to the Opus Entities. The Company has also contracted with the Opus Entities for construction and property management services. The Company made payments of $1.6 million, $2.8 million, and $3.0 million to the Opus Entities for these services in fiscal 2008, 2007, and 2006, respectively.20. BUSINESS SEGMENTS AND RELATED INFORMATION The Company’s operations are organized into three reporting segments: Consumer Foods, Food and Ingredients, and International Foods. The Consumer Foods reporting segment includes branded, private label, and customized food products which are sold in various retail and foodservice channels. The products include a variety of categories (meals, entrees, condiments, sides, snacks, and desserts) across frozen, refrigerated, and services revenue net of direct expenses reflecting higher financially reportable development revenue; and $65 million of stronger owned, leased, corporate housing and other revenue net of direct expenses. The fee improvement versus the prior year also reflects the recognition in 2005 of $14 million of incentive fees that were calculated based on prior period results, but not earned and due until 2005. The increase in owned, leased, corporate housing and other revenue net of direct expenses is primarily attributable to properties acquired in 2005, including the CTF properties, the strong demand environment in 2005, and our receipt in 2005, of a $10 million termination fee associated with one property that left our system. The favorable items noted above were partially offset by $146 million of increased general and administrative expenses and $46 million of lower synthetic fuel revenue net of synthetic fuel expenses. Increased general and administrative expenses were associated with our Lodging segments as unallocated general and administrative expenses were down slightly compared to the prior year. The increase in general, administrative and other expenses reflects a $94 million pre-tax charge impacting our Full-Service Lodging segment, primarily due to the non-cash write-off of deferred contract acquisition costs associated with the termination of management agreements (discussed more fully later in this report in the “CTF Holdings Ltd. ” discussion under the “Investing Activities Cash Flows” caption in the “Liquidity and Capital Resources” section), and $30 million of pre-tax expenses associated with our bedding incentive program, impacting our Full-Service, Select-Service and Extended-Stay Lodging segments. We implemented the bedding incentive program in 2005 to ensure that guests could enjoy the comfort and luxury of our new bedding by year-end 2005. General and administrative expenses in 2005 also reflect pre-tax performance termination cure payments of $15 million associated with two properties, a $9 million pre-tax charge associated with three guarantees, increased other net overhead costs of $13 million including costs related to the Company’s unit growth, development and systems, and $2 million of increased foreign exchange losses partially offset by $5 million of lower litigation expenses. Additionally, in 2004, general and administrative expenses included a $13 million charge associated with the write-off of deferred contract acquisition costs. Operating income for 2005 includes a synthetic fuel operating loss of $144 million versus $98 million of operating losses in the prior year, reflecting increased costs and the consolidation of our synthetic fuel operations from the start of the 2004 second quarter, which resulted in the recognition of revenue and expenses for all of 2005 versus only three quarters in 2004, as we accounted for the synthetic fuel operations using the equity method of accounting in the 2004 first quarter. For additional information, see our “Synthetic Fuel” segment discussion later in this report.2004 COMPARED TO 2003 Operating income increased $100 million to $477 million in 2004 from $377 million in 2003. The increase is primarily due to higher fees, which are related both to stronger RevPAR, driven by increased occupancy and average daily rate, and to the growth in the number of rooms, and strong timeshare results, which are mainly attributable to strong demand and improved margins, partially offset by higher general and administrative expenses. General, administrative and other expenses increased $84 million in 2004 to $607 million from $523 million in 2003, primarily reflecting higher administrative expenses in our Full-Service, Select-Service, and Extended-Stay segments ($55 million) and Timeshare segment ($24 million), primarily associated with increased overhead costs related to the Company’s unit growth and timeshare development, and a $10 million reduction in foreign exchange gains, offset by $6 million of lower litigation expenses. Higher general and administrative expenses of $84 million also reflect a $13 million writeoff of deferred contract acquisition costs as further discussed in the “2004 Compared to 2003” caption under the “Select-Service Lodging” heading later in this report. Gains and Other Income The following table shows our gains and other income for 2005, 2004, and 2003. |
0.48153 | What is the ratio of Commercial – domestic to the total in 2009? | GWIM provides a wide offering of customized banking, investment and brokerage services tailored to meet the changing wealth management needs of our individual and institutional customer base. Our clients have access to a range of services offered through three primary businesses: MLGWM; U. S. Trust, Bank of America Private Wealth Management (U. S. Trust); and Columbia. The results of the Retirement & Philanthropic Services business, the Corporation’s approximate 34 percent economic ownership interest in BlackRock and other miscellaneous items are included in Other within GWIM. As part of the Merrill Lynch acquisition, we added its financial advisors and an economic ownership interest of approximately 50 percent in BlackRock, a publicly traded investment management company. During 2009, BlackRock completed its purchase of Barclays Global Investors, an asset management business, from Barclays PLC which had the effect of diluting our ownership interest in BlackRock and, for accounting purposes, was treated as a sale of a portion of our ownership interest. As a result, upon the closing of this transaction, the Corporation’s economic ownership interest in BlackRock was reduced to approximately 34 percent and we recorded a pre-tax gain of $1.1 billion. Net income increased $1.1 billion, or 78 percent, to $2.5 billion as higher total revenue was partially offset by increases in noninterest expense and provision for credit losses. Net interest income increased $767 million, or 16 percent, to $5.6 billion primarily due to the acquisition of Merrill Lynch partially offset by a lower net interest income allocation from ALM activities and the impact of the migration of client balances during 2009 to Deposits and Home Loans & Insurance. GWIM’s average loan and deposit growth benefited from the acquisition of Merrill Lynch and the shift of client assets from off-balance sheet (e. g. , money market funds) to on-balance sheet products (e. g. , deposits) partially offset by the net migration of customer relationships. A more detailed discussion regarding migrated customer relationships and related balances is provided in the following MLGWM discussion. Noninterest income increased $9.5 billion to $12.6 billion primarily due to higher investment and brokerage services income driven by the Merrill Lynch acquisition, the $1.1 billion gain on our investment in BlackRock and the lower level of support provided to certain cash funds partially offset by the impact of lower average equity market levels and net outflows primarily in the cash complex. Provision for credit losses increased $397 million, or 60 percent, to $1.1 billion, reflecting the weak economy during 2009 which drove higher net charge-offs in the consumer real estate and commercial portfolios including a single large commercial charge-off. Noninterest expense increased $8.2 billion to $13.1 billion driven by the addition of Merrill Lynch and higher FDIC insurance and special assessment costs partially offset by lower revenue-related expenses. Client Assets The following table presents client assets which consist of AUM, client brokerage assets, assets in custody and client deposits.
<table><tr><td></td><td colspan="2">December 31</td></tr><tr><td>(Dollars in millions)</td><td>2009</td><td>2008</td></tr><tr><td>Assets under management</td><td>$749,852</td><td>$523,159</td></tr><tr><td>Client brokerage assets<sup>-1</sup></td><td>1,270,461</td><td>172,106</td></tr><tr><td>Assets in custody</td><td>274,472</td><td>133,726</td></tr><tr><td>Client deposits</td><td>224,840</td><td>176,186</td></tr><tr><td>Less: Client brokerage assets and assets incustody included in assets under management</td><td>-346,682</td><td>-87,519</td></tr><tr><td> Total net client assets</td><td>$2,172,943</td><td>$917,658</td></tr></table>
(1) Client brokerage assets include non-discretionary brokerage and fee-based assets. The increase in net client assets was driven by the acquisition of Merrill Lynch and higher equity market values at December 31, 2009 compared to 2008 partially offset by outflows that primarily occurred in cash and money market assets due to increasing interest rate pressure. Merrill Lynch Global Wealth Management Effective January 1, 2009, as a result of the Merrill Lynch acquisition, we combined the Merrill Lynch wealth management business and our former Premier Banking & Investments business to form MLGWM. MLGWM provides a high-touch client experience through a network of approximately 15,000 client-facing financial advisors to our affluent customers with a personal wealth profile of at least $250,000 of investable assets. The addition of Merrill Lynch created one of the largest financial advisor networks in the world. Merrill Lynch added $10.3 billion in revenue and $1.6 billion in net income during 2009. Total client balances in MLGWM, which include deposits, AUM, client brokerage assets and other assets in custody, were $1.4 trillion at December 31, 2009. MLGWM includes the impact of migrating customers and their related deposit and loan balances to or from Deposits and Home Loans & Insurance. As of the date of migration, the associated net interest income, noninterest income and noninterest expense are recorded in the segment to which the customers migrated. During 2009, total deposits of $43.4 billion were migrated to Deposits from MLGWM. Conversely, during 2008, total deposits of $20.5 billion were migrated from Deposits to MLGWM. During 2009 and 2008, total loans of $16.6 billion and $1.7 billion were migrated from MLGWM, of which $11.5 billion and $1.6 billion were migrated to Home Loans & Insurance. These changes in 2009 were mainly due to client segmentation threshold changes resulting from the Merrill Lynch acquisition. Table 9 presents total long-term debt and other obligations at December 31, 2009.
<table><tr><td></td><td colspan="5"> December 31, 2009</td></tr><tr><td>(Dollars in millions)</td><td> Due in 1 Year or Less</td><td> Due after 1 Year through 3 Years</td><td> Due after 3 Years through 5 Years</td><td> Due after 5 Years</td><td> Total</td></tr><tr><td>Long-term debt and capital leases</td><td>$99,144</td><td>$124,054</td><td>$72,103</td><td>$143,220</td><td>$438,521</td></tr><tr><td>Operating lease obligations</td><td>3,143</td><td>5,072</td><td>3,355</td><td>8,143</td><td>19,713</td></tr><tr><td>Purchase obligations</td><td>11,957</td><td>3,667</td><td>1,627</td><td>2,119</td><td>19,370</td></tr><tr><td>Other long-term liabilities</td><td>610</td><td>1,097</td><td>848</td><td>1,464</td><td>4,019</td></tr><tr><td> Total long-term debt and other obligations</td><td>$114,854</td><td>$133,890</td><td>$77,933</td><td>$154,946</td><td>$481,623</td></tr></table>
Debt, lease, equity and other obligations are more fully discussed in Note 13 – Long-term Debt and Note 14 – Commitments and Contingencies to the Consolidated Financial Statements. The Plans are more fully discussed in Note 17 – Employee Benefit Plans to the Consolidated Financial Statements. We enter into commitments to extend credit such as loan commitments, standby letters of credit (SBLCs) and commercial letters of credit to meet the financing needs of our customers. For a summary of the total unfunded, or off-balance sheet, credit extension commitment amounts by expiration date, see the table in Note 14 – Commitments and Contingencies to the Consolidated Financial Statements. Regulatory Initiatives On November 12, 2009, the Federal Reserve issued the final rule related to changes to Regulation E and on May 22, 2009, the CARD Act was signed into law. For more information on the impact of these new regulations, see Regulatory Overview on page 29. In December 2009, the Basel Committee on Banking Supervision released consultative documents on both capital and liquidity. In addition, we will begin Basel II parallel implementation during the second quarter of 2010. For more information, see Basel Regulatory Capital Requirements on page 64. On January 21, 2010, the Federal Reserve, Office of the Comptroller of the Currency, FDIC and Office of Thrift Supervision (collectively, joint agencies) issued a final rule regarding risk-based capital and the impact of adoption of new consolidation rules issued by the FASB. The final rule eliminates the exclusion of certain asset-backed commercial paper (ABCP) program assets from risk-weighted assets and provides a reservation of authority to permit the joint agencies to require banks to treat structures that are not consolidated under the accounting standards as if they were consolidated for risk-based capital purposes commensurate with the risk relationship of the bank to the structure. In addition, the final rule allows for an optional delay and phase-in for a maximum of one year for the effect on risk-weighted assets and the regulatory limit on the inclusion of the allowance for loan and lease losses in Tier 2 capital related to the assets that must be consolidated as a result of the accounting change. The transitional relief does not apply to the leverage ratio or to assets in VIEs to which a bank provides implicit support. We have elected to forgo the phase-in period, and accordingly, we consolidated the amounts for regulatory capital purposes as of January 1, 2010. For more information on the impact of this guidance, see Impact of Adopting New Accounting Guidance on Consolidation on page 64. On December 14, 2009, we announced our intention to increase lending to small- and medium-sized businesses to approximately $21 billion in 2010 compared to approximately $16 billion in 2009. This announcement is consistent with the U. S. Treasury’s initiative, announced as part of the Financial Stability Plan on February 2, 2009, to help increase small business owners’ access to credit. As part of the initiative, the U. S. Treasury began making direct purchases of up to $15 billion of certain securities backed by Small Business Administration (SBA) loans to improve liquidity in the credit markets and purchasing new securities to ensure that financial institutions feel confident in extending new loans to small businesses. The program also temporarily raises guarantees to up to 90 percent in the SBA’s loan program and temporarily eliminates certain SBA loan fees. We continue to lend to creditworthy small business customers through small business credit cards, loans and lines of credit products. In response to the economic downturn, the FDIC implemented the Temporary Liquidity Guarantee Program (TLGP) to strengthen confidence and encourage liquidity in the banking system by allowing the FDIC to guarantee senior unsecured debt (e. g. , promissory notes, unsubordinated unsecured notes and commercial paper) up to prescribed limits, issued by participating entities beginning on October 14, 2008, and continuing through October 31, 2009. We participated in this program; however, as announced in September 2009, due to improved market liquidity and our ability to issue debt without the FDIC guarantee, we, with the FDIC’s agreement, exited the program and have stopped issuing FDICguaranteed debt. At December 31, 2009, we still had FDIC-guaranteed debt outstanding issued under the TLGP of $44.3 billion. The TLGP also offered the Transaction Account Guarantee Program (TAGP) that guaranteed noninterest-bearing deposit accounts held at participating FDICinsured institutions on balances in excess of $250,000. We elected to opt out of the six-month extension of the TAGP which extends the program to June 30, 2010. We exited the TAGP effective December 31, 2009. On September 21, 2009, the Corporation reached an agreement to terminate its term sheet with the U. S. government under which the U. S. government agreed in principle to provide protection against the possibility of unusually large losses on a pool of the Corporation’s financial instruments that were acquired from Merrill Lynch. In connection with the termination of the term sheet, the Corporation paid a total of $425 million to the U. S. government to be allocated among the U. S. Treasury, the Federal Reserve and the FDIC. In addition to exiting the TARP as discussed on page 30, terminating the U. S. Government’s asset guarantee term sheet and exiting the TLGP, including the TAGP, we have exited or ceased participation in market disruption liquidity programs created by the U. S. government in response to the economic downturn of 2008. We have exited or repaid borrowings under the Term Auction Facility, U. S. Treasury Temporary Liquidity Guarantee Program for Money Market Funds, ABCP Money Market Fund Liquidity Facility, Commercial Paper Federal Funding Facility, Money Market Investor Funding Facility, Term Securities Lending Facility and Primary Dealer Credit Facility. On November 17, 2009, the FDIC issued a final rule that required insured institutions to prepay on December 30, 2009 their estimated Table 29 presents commercial credit exposure by type for utilized, unfunded and total binding committed credit exposure. Commercial utilized credit exposure includes funded loans, standby letters of credit, financial guarantees, bankers’ acceptances and commercial letters of credit for which the bank is legally bound to advance funds under prescribed conditions, during a specified period. Although funds have not been advanced, these exposure types are considered utilized for credit risk management purposes. Total commercial committed credit exposure decreased by $10.1 billion, or one percent, at December 31, 2009 compared to December 31, 2008. The decrease was largely driven by reductions in loans and leases partially offset by an increase in derivatives due to the acquisition of Merrill Lynch. Total commercial utilized credit exposure decreased to $494.4 billion at December 31, 2009 compared to $498.7 billion at December 31, 2008. Funded loans and leases declined due to limited demand for acquisition financing and capital expenditures in the large corporate and middle-market portfolios and as clients utilized the improved capital markets more extensively for their funding needs. With the economic outlook remaining uncertain, businesses are aggressively managing working capital and production capacity, maintaining low inventories and deferring capital spending. The increase in derivative assets was driven by the acquisition of Merrill Lynch substantially offset during 2009 by maturing transactions, mark-to-market adjustments from changing interest and foreign exchange rates, as well as narrower credit spreads. The loans and leases funded utilization rate was 57 percent at December 31, 2009 compared to 58 percent at December 31, 2008.
<table><tr><td></td><td colspan="6"> December 31</td></tr><tr><td></td><td colspan="2"> Commercial Utilized<sup>-1, 2</sup></td><td colspan="2"> Commercial Unfunded<sup>-1, 3, 4</sup></td><td colspan="2"> Total Commercial Committed<sup>-1</sup></td></tr><tr><td>(Dollars in millions)</td><td> 2009</td><td>2008</td><td> 2009</td><td>2008</td><td> 2009</td><td>2008</td></tr><tr><td>Loans and leases</td><td>$322,564</td><td>$342,767</td><td>$293,519</td><td>$300,856</td><td>$616,083</td><td>$643,623</td></tr><tr><td>Derivative assets<sup>-5</sup></td><td>80,689</td><td>62,252</td><td>–</td><td>–</td><td>80,689</td><td>62,252</td></tr><tr><td>Standby letters of credit and financial guarantees</td><td>70,238</td><td>72,840</td><td>6,008</td><td>4,740</td><td>76,246</td><td>77,580</td></tr><tr><td>Assets held-for-sale<sup>-6</sup></td><td>13,473</td><td>14,206</td><td>781</td><td>183</td><td>14,254</td><td>14,389</td></tr><tr><td>Bankers’ acceptances</td><td>3,658</td><td>3,382</td><td>16</td><td>13</td><td>3,674</td><td>3,395</td></tr><tr><td>Commercial letters of credit</td><td>2,958</td><td>2,974</td><td>569</td><td>791</td><td>3,527</td><td>3,765</td></tr><tr><td>Foreclosed properties and other</td><td>797</td><td>328</td><td>–</td><td>–</td><td>797</td><td>328</td></tr><tr><td> Total commercial credit exposure</td><td>$494,377</td><td>$498,749</td><td>$300,893</td><td>$306,583</td><td>$795,270</td><td>$805,332</td></tr></table>
(1) At December 31, 2009, total commercial utilized, total commercial unfunded and total commercial committed exposure include $88.5 billion, $25.7 billion and $114.2 billion, respectively, related to Merrill Lynch. (2) Total commercial utilized exposure at December 31, 2009 and 2008 includes loans and issued letters of credit accounted for under the fair value option and is comprised of loans outstanding of $4.9 billion and $5.4 billion, and letters of credit with a notional amount of $1.7 billion and $1.4 billion. (3) Total commercial unfunded exposure at December 31, 2009 and 2008 includes loan commitments accounted for under the fair value option with a notional amount of $25.3 billion and $15.5 billion. (4) Excludes unused business card lines which are not legally binding. (5) Derivative assets are carried at fair value, reflect the effects of legally enforceable master netting agreements, and have been reduced by cash collateral of $58.4 billion and $34.8 billion at December 31, 2009 and 2008. Not reflected in utilized and committed exposure is additional derivative collateral held of $16.2 billion and $13.4 billion which consists primarily of other marketable securities at December 31, 2009 and 2008. (6) Total commercial committed assets held-for-sale exposure consists of $9.0 billion and $12.1 billion of commercial LHFS exposure (e. g. , commercial mortgage and leveraged finance) and $5.3 billion and $2.3 billion of assets held-for-sale exposure at December 31, 2009 and 2008. Table 30 presents commercial utilized reservable criticized exposure by product type. Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities. In addition to reservable loans and leases, excluding those accounted for under the fair value option, exposure includes SBLCs, financial guarantees, bankers’ acceptances and commercial letters of credit for which we are legally bound to advance funds under prescribed conditions, during a specified period. Although funds have not been advanced, these exposure types are considered utilized for credit risk management purposes. Total commercial utilized reservable criticized exposure rose by $21.7 billion primarily due to increases in commercial real estate and commercial – domestic. Commercial real estate increased $10.0 billion primarily due to the non-homebuilder portfolio which has been impacted by the weak economy partially offset by a decrease in the homebuilder portfolio. The $9.3 billion increase in commercial – domestic reflects deterioration across various lines of business and industries, primarily in Global Banking. At December 31, 2009, approximately 85 percent of the loans within criticized reservable utilized exposure are secured.
<table><tr><td></td><td colspan="4"> December 31</td></tr><tr><td></td><td colspan="2">2009</td><td colspan="2">2008</td></tr><tr><td>(Dollars in millions)</td><td> Amount</td><td>Percent -1</td><td>Amount</td><td>Percent<sup>-1</sup></td></tr><tr><td>Commercial – domestic<sup>-2</sup></td><td>$28,259</td><td>11.66%</td><td>$18,963</td><td>7.20%</td></tr><tr><td>Commercial real estate</td><td>23,804</td><td>32.13</td><td>13,830</td><td>19.73</td></tr><tr><td>Commercial lease financing</td><td>2,229</td><td>10.04</td><td>1,352</td><td>6.03</td></tr><tr><td>Commercial – foreign</td><td>2,605</td><td>7.12</td><td>1,459</td><td>3.65</td></tr><tr><td></td><td>56,897</td><td>15.17</td><td>35,604</td><td>8.99</td></tr><tr><td>Small business commercial – domestic</td><td>1,789</td><td>10.18</td><td>1,333</td><td>6.94</td></tr><tr><td> Total commercial utilized reservable criticized exposure</td><td>$58,686</td><td>14.94</td><td>$36,937</td><td>8.90</td></tr></table>
(1) Percentages are calculated as commercial utilized reservable criticized exposure divided by total commercial utilized reservable exposure for each exposure category. (2) Excludes small business commercial – domestic exposure. The following table provides a reconciliation of the beginning and ending balances of our foreign pension plan assets measured at fair value that used significant unobservable inputs (Level 3) (in millions):
<table><tr><td></td><td>December 31, 2017</td></tr><tr><td>Beginning Balance</td><td>$78.7</td></tr><tr><td>Gains on assets sold</td><td>0.3</td></tr><tr><td>Change in fair value of assets</td><td>3.8</td></tr><tr><td>Net purchases and sales</td><td>5.2</td></tr><tr><td>Translation gain</td><td>3.0</td></tr><tr><td>Ending Balance</td><td>$91.0</td></tr></table>
We expect that we will have no legally required minimum funding requirements in 2018 for the qualified U. S. and Puerto Rico defined benefit retirement plans, nor do we expect to voluntarily contribute to these plans during 2018. Contributions to foreign defined benefit plans are estimated to be $17.0 million in 2018 . We do not expect the assets in any of our plans to be returned to us in the next year. Defined Contribution Plans We also sponsor defined contribution plans for substantially all of the U. S. and Puerto Rico employees and certain employees in other countries. The benefits offered under these plans are reflective of local customs and practices in the countries concerned. We expensed $47.9 million, $42.5 million and $40.2 million related to these plans for the years ended December 31, 2017, 2016 and 2015, respectively.15. Income Taxes 2017 Tax Act: The President signed U. S. tax reform legislation (“2017 Tax Act”) on December 22, 2017, which is considered the enactment date. The 2017 Tax Act includes a broad range of provisions, many of which significantly differ from those contained in previous U. S. tax law. Changes in tax law are accounted for in the period of enactment. As such, our 2017 consolidated financial statements reflect the immediate tax effect of the 2017 Tax Act. The 2017 Tax Act contains several key provisions including, among other things: ? a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (E&P), referred to as the toll charge; ? a reduction in the corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017; ? the introduction of a new U. S. tax on certain off-shore earnings referred to as global intangible low-taxed income (GILTI) at an effective tax rate of 10.5 percent for tax years beginning after December 31, 2017 (increasing to 13.125 percent for tax years beginning after December 31, 2025), with a partial offset by foreign tax credits; and ? the introduction of a territorial tax system beginning in 2018 by providing a 100 percent dividend received deduction on certain qualified dividends from foreign subsidiaries. During the fourth quarter of 2017, we recorded an income tax benefit of $1,272.4 million, which was comprised of the following: ? income tax benefit of $715.0 million for the one-time deemed repatriation of foreign earnings. This is composed of a $1,181.0 million benefit from the removal of a deferred tax liability we had recorded for the repatriation of foreign earnings prior to the 2017 Tax Act offset by $466.0 million for the toll charge recognized under the 2017 Tax Act. In accordance with the 2017 Tax Act, we expect to elect to pay the toll charge in installments over eight years. As of December 31, 2017, we have recorded current and non-current income tax liabilities related to the toll charge of $82.0 million and $384.0 million, respectively. ? an income tax benefit of $557.4 million, primarily related to the remeasurement of our deferred tax assets and liabilities at the enacted corporate income tax rate of 21 percent. The net benefit recorded was based on currently available information and interpretations made in applying the provisions of the 2017 Tax Act as of the time of filing this Annual Report on Form 10-K. We further refined our estimates related to the impact of the 2017 Tax Act subsequent to the issuance of our earnings release for the fourth quarter of 2017. In accordance with authoritative guidance issued by the SEC, the income tax effect for certain aspects of the 2017 Tax Act represent provisional amounts for which our accounting is incomplete, but with respect to which a reasonable estimate could be determined and recorded during the fourth quarter of 2017. The actual effects of the 2017 Tax Act and final amounts recorded may differ materially from our current estimate of provisional amounts due to, among other things, further interpretive guidance that may be issued by U. S. tax authorities or regulatory bodies, including the SEC and the FASB. We will continue to analyze the 2017 Tax Act and any additional guidance that may be issued so we can finalize the full effects of applying the new legislation on our financial statements in the measurement period, which ends in the fourth quarter of 2018. We continue to evaluate the impacts of the 2017 Tax Act and consider the amounts recorded to be provisional. In addition, we are still evaluating the GILTI provisions of the 2017 Tax Act and their impact, if any, on our consolidated financial statements as of December 31, 2017. The FASB allows companies to adopt an accounting policy to either recognize deferred taxes for GILTI or treat such as a tax cost in the year incurred. We have not yet determined which accounting policy to adopt because determining the impact of the GILTI provisions requires analysis of our existing legal entity structure, the reversal of our U. S. GAAP and U. S. tax basis differences in the assets and liabilities of our foreign subsidiaries, and our ability to offset any tax with foreign tax credits. As such, we did not record a deferred income tax |
0.11233 | what is the profit margin in 2018? | ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our discussion of cautionary statements and significant risks to the company’s business under Item 1A. Risk Factors of the 2018 Form?10-K. OVERVIEW Our sales and revenues for 2018 were $54.722 billion, a 20?percent increase from 2017 sales and revenues of $45.462?billion. The increase was primarily due to higher sales volume, mostly due to improved demand across all regions and across the three primary segments. Profit per share for 2018 was $10.26, compared to profit per share of $1.26 in 2017. Profit was $6.147 billion in 2018, compared with $754 million in 2017. The increase was primarily due to lower tax expense, higher sales volume, decreased restructuring costs and improved price realization. The increase was partially offset by higher manufacturing costs and selling, general and administrative (SG&A) and research and development (R&D) expenses and lower profit from the Financial Products Segment. Fourth-quarter 2018 sales and revenues were $14.342 billion, up $1.446 billion, or 11 percent, from $12.896 billion in the fourth quarter of 2017. Fourth-quarter 2018 profit was $1.78 per share, compared with a loss of $2.18 per share in the fourth quarter of 2017. Fourth-quarter 2018 profit was $1.048 billion, compared with a loss of $1.299 billion in 2017. Highlights for 2018 include: z Sales and revenues in 2018 were $54.722 billion, up 20?percent from 2017. Sales improved in all regions and across the three primary segments. z Operating profit as a percent of sales and revenues was 15.2?percent in 2018, compared with 9.8 percent in 2017. Adjusted operating profit margin was 15.9 percent in 2018, compared with 12.5 percent in 2017. z Profit was $10.26 per share for 2018, and excluding the items in the table below, adjusted profit per share was $11.22. For 2017 profit was $1.26 per share, and excluding the items in the table below, adjusted profit per share was $6.88. z In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items:
<table><tr><td></td><td colspan="2">Full Year 2018</td><td colspan="2">Full Year 2017</td></tr><tr><td>(Millions of dollars)</td><td>Profit Before Taxes</td><td>ProfitPer Share</td><td>Profit Before Taxes</td><td>ProfitPer Share</td></tr><tr><td>Profit</td><td>$7,822</td><td>$10.26</td><td>$4,082</td><td>$1.26</td></tr><tr><td>Restructuring costs</td><td>386</td><td>0.50</td><td>1,256</td><td>1.68</td></tr><tr><td>Mark-to-market losses</td><td>495</td><td>0.64</td><td>301</td><td>0.26</td></tr><tr><td>Deferred tax valuation allowance adjustments</td><td>—</td><td>-0.01</td><td>—</td><td>-0.18</td></tr><tr><td>U.S. tax reform impact</td><td>—</td><td>-0.17</td><td>—</td><td>3.95</td></tr><tr><td>Gain on sale of equity investment</td><td>—</td><td>—</td><td>-85</td><td>-0.09</td></tr><tr><td>Adjusted profit</td><td>$8,703</td><td>$11.22</td><td>$5,554</td><td>$6.88</td></tr></table>
z Machinery, Energy & Transportation (ME&T) operating cash flow for 2018 was about $6.3 billion, more than sufficient to cover capital expenditures and dividends. ME&T operating cash flow for 2017 was about $5.5 billion. Restructuring Costs In recent years, we have incurred substantial restructuring costs to achieve a flexible and competitive cost structure. During 2018, we incurred $386 million of restructuring costs related to restructuring actions across the company. During 2017, we incurred $1.256 billion of restructuring costs with about half related to the closure of the facility in Gosselies, Belgium, and the remainder related to other restructuring actions across the company. Although we expect restructuring to continue as part of ongoing business activities, restructuring costs should be lower in 2019 than 2018. Notes: z Glossary of terms included on pages 33-34; first occurrence of terms shown in bold italics. z Information on non-GAAP financial measures is included on pages 42-43. Recognition of finance revenue and rental revenue is suspended and the account is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due). Recognition is resumed, and previously suspended income is recognized, when the account becomes current and collection of remaining amounts is considered probable. See Note 7 for more information. Revenues are presented net of sales and other related taxes.3. Stock-Based Compensation Our stock-based compensation plans primarily provide for the granting of stock options, stock-settled stock appreciation rights (SARs), restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) to Officers and other key employees, as well as non-employee Directors. Stock options permit a holder to buy Caterpillar stock at the stock’s price when the option was granted. SARs permit a holder the right to receive the value in shares of the appreciation in Caterpillar stock that occurred from the date the right was granted up to the date of exercise. RSUs are agreements to issue shares of Caterpillar stock at the time of vesting. PRSUs are similar to RSUs and include performance conditions in the vesting terms of the award. Our long-standing practices and policies specify that all stockbased compensation awards are approved by the Compensation Committee (the Committee) of the Board of Directors. The award approval process specifies the grant date, value and terms of the award. The same terms and conditions are consistently applied to all employee grants, including Officers. The Committee approves all individual Officer grants. The number of stock-based compensation award units included in an individual’s award is determined based on the methodology approved by the Committee. The exercise price methodology?approved by the Committee is the closing price of the Company stock on the date of the grant. In June of 2014, shareholders approved the Caterpillar Inc. 2014 Long-Term Incentive Plan (the Plan) under which all new stock-based compensation awards are granted. In June of 2017, the Plan was amended and restated. The Plan initially provided that up to 38,800,000 Common Shares would be reserved for future issuance under the Plan, subject to adjustment in certain events. Subsequent to the shareholder approval of the amendment and restatement of the Plan, an additional 36,000,000 Common Shares became available for all awards under the Plan. Common stock issued from Treasury stock under the plans totaled 5,590,641 for 2018, 11,139,748 for 2017 and 4,164,134 for 2016. The total number of shares authorized for equity awards under the amended and restated Caterpillar Inc. 2014 Long-Term Incentive Plan is 74,800,000, of which 44,139,162 shares remained available for issuance as of December?31,?2018. Stock option and RSU awards generally vest according to a threeyear graded vesting schedule. One-third of the award will become vested on the first anniversary of the grant date, one-third of the award will become vested on the second anniversary of the grant date and one-third of the award will become vested on the third anniversary of the grant date. PRSU awards generally have a threeyear performance period and cliff vest at the end of the period based upon achievement of performance targets established at the time of grant. Upon separation from service, if the participant is 55 years of age or older with more than five years of service, the participant meets the criteria for a “Long Service Separation. ” Award terms for awards granted in 2016 allow for immediate vesting upon separation of all outstanding options and RSUs with no requisite service period for employees who meet the criteria for a “Long Service Separation. ” Compensation expense for the 2016 grant was fully recognized immediately on the grant date for these employees. Award terms for the 2018 and 2017 grants allow for continued vesting as of each vesting date specified in the award document for employees who meet the criteria for a “Long Service Separation” and fulfill a requisite service period of six months. Compensation expense for eligible employees for the 2018 and 2017 grants was recognized over the period from the grant date to the end date of the six-month requisite service period. For employees who become eligible for a “Long Service Separation” subsequent to the end date of the six-month requisite service period and prior to the completion of the vesting period, compensation expense is recognized over the period from the grant date to the date eligibility is achieved. At grant, SARs and option awards have a term life of ten years. For awards granted prior to 2016, if the “Long Service Separation” criteria are met, the vested options/SARs have a life that is the lesser of ten years from the original grant date or five years from the separation date. For awards granted in 2018, 2017, and 2016, the vested options have a life equal to ten years from the original grant date. Prior to 2017, all outstanding PRSU awards granted to employees eligible for a “Long Service Separation” may vest at the end of the performance period based upon achievement of the performance target. Compensation expense for the 2016 PRSU grant was fully recognized immediately on the grant date for these employees. For PRSU awards granted in 2018 and 2017, only a prorated number of shares may vest at the end of the performance period based upon achievement of the performance target, with the proration based upon the number of months of continuous employment during the three-year performance period. Employees with a “Long Service Separation” must also fulfill a six-month requisite service period in order to be eligible for the prorated vesting of outstanding PRSU awards granted in 2018 and 2017. Compensation expense for the 2018 and 2017 PRSU grants is being recognized on a straight-line basis over the three-year performance period for all participants. Accounting guidance on share-based payments requires companies to estimate the fair value of options/SARs on the date of grant using an option-pricing model. The fair value of our option/SAR grants was estimated using a lattice-based option-pricing model. The latticebased option-pricing model considers a range of assumptions related to volatility, risk-free interest rate and historical employee behavior. Expected volatility was based on historical Caterpillar stock price movement and current implied volatilities from traded options on Caterpillar stock. The risk-free interest rate was based on U. S. Treasury security yields at the time of grant. The weighted-average dividend yield was based on historical information. The expected life was determined from the lattice-based model. The latticebased model incorporated exercise and post vesting forfeiture assumptions based on analysis of historical data. The following table provides the assumptions used in determining the fair value of the Option/SAR awards for the years ended December?31, 2018, 2017 and 2016, respectively.
<table><tr><td></td><td colspan="3">Grant Year</td></tr><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Weighted-average dividend yield</td><td>2.7%</td><td>3.4%</td><td>3.2%</td></tr><tr><td>Weighted-average volatility</td><td>30.2%</td><td>29.2%</td><td>31.1%</td></tr><tr><td>Range of volatilities</td><td>21.5-33.0%</td><td>22.1-33.0%</td><td>22.5-33.4%</td></tr><tr><td>Range of risk-free interest rates</td><td>2.02-2.87%</td><td>0.81-2.35%</td><td>0.62-1.73%</td></tr><tr><td>Weighted-average expected lives</td><td>8 years</td><td>8 years</td><td>8 years</td></tr></table> |
4 | What is the column number of the section where the BALANCE, JANUARY 1, 2007 is negative? | PRINTING PAPERS net sales for 2006 decreased 3% from both 2005 and 2004 due principally to the sale of the U. S. coated papers business in August 2006. However, operating profits in 2006 were 43% higher than in 2005 and 33% higher than in 2004. Compared with 2005, earnings improved for U. S. uncoated papers, market pulp and European Papers, but this was partially offset by earnings declines in Brazilian papers. Benefits from higher average sales price realizations in the United States, Europe and Brazil ($284 million), improved manufacturing operations ($73 million), reduced lack-of-order downtime ($41 million), higher sales volumes in Europe ($23 million), and other items ($65 million) were partially offset by higher raw material and energy costs ($109 million), higher freight costs ($45 million) and an impairment charge to reduce the carrying value of the fixed assets at the Saillat, France mill ($128 million). Compared with 2004, higher earnings in 2006 in the U. S. uncoated papers, market pulp and coated papers businesses were offset by lower earnings in the European and Brazilian papers businesses. The printing papers segment took 555,000 tons of downtime in 2006, including 150,000 tons of lack-of-order downtime to align production with customer demand. This compared with 970,000 tons of total downtime in 2005, of which 520,000 tons related to lack-of-orders.
<table><tr><td><i>In millions</i></td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Sales</td><td>$6,930</td><td>$7,170</td><td>$7,135</td></tr><tr><td>Operating Profit</td><td>$677</td><td>$473</td><td>$508</td></tr></table>
U. S. UNCOATED PAPERS net sales in 2006 were $3.5 billion, compared with $3.2 billion in 2005 and $3.3 billion in 2004. Sales volumes increased in 2006 over 2005, particularly in cut-size paper and printing papers. Average sales price realizations increased significantly, reflecting benefits from price increases announced in late 2005 and early 2006. Lack-of-order downtime declined from 450,000 tons in 2005 to 40,000 tons in 2006, reflecting firm market demand and the impact of the permanent closure of three uncoated freesheet machines in 2005. Operating earnings in 2006 more than doubled compared with both 2005 and 2004. The benefits of improved average sales price realizations more than offset higher input costs for freight, wood and energy, which were all above 2005 levels. Mill operations were favorable compared with 2005 due to current-year improvements in machine performance, lower labor, chemical and energy consumption costs, as well as approximately $30 million of charges incurred in 2005 for machine shutdowns. U. S. COATED PAPERS net sales were $920 million in 2006, $1.6 billion in 2005 and $1.4 billion in 2004. Operating profits in 2006 were 26% lower than in 2005. A small operating loss was reported for the business in 2004. This business was sold in the third quarter of 2006. During the first two quarters of 2006, sales volumes were up slightly versus 2005. Average sales price realizations for coated freesheet paper and coated groundwood paper were higher than in 2005, reflecting the impact of previously announced price increases. However, input costs for energy, wood and other raw materials increased over 2005 levels. Manufacturing operations were favorable due to higher machine efficiency and mill cost savings. U. S. MARKET PULP sales in 2006 were $509 million, compared with $526 million and $437 million in 2005 and 2004, respectively. Sales volumes in 2006 were down from 2005 levels, primarily for paper and tissue pulp. Average sales price realizations were higher in 2006, reflecting higher average prices for fluff pulp and bleached hardwood and softwood pulp. Operating earnings increased 30% from 2005 and more than 100% from 2004 principally due to the impact of the higher average sales prices. Input costs for wood and energy were higher in 2006 than in 2005. Manufacturing operations were unfavorable, driven primarily by poor operations at our Riegelwood, North Carolina mill. BRAZILIAN PAPER net sales for 2006 of $496 million were higher than the $465 million in 2005 and the $417 million in 2004. The sales increase in 2006 reflects higher sales volumes than in 2005, particularly for uncoated freesheet paper, and a strengthening of the Brazilian currency versus the U. S. dollar. Average sales price realizations improved in 2006, primarily for uncoated freesheet paper and wood chips. Despite higher net sales, operating profits for 2006 of $122 million were down from $134 million in 2005 and $166 million in 2004, due principally to incremental costs associated with an extended mill outage in Mogi Guacu to convert to an elemental-chlorine-free bleaching process, to rebuild the primary recovery boiler, and for other environmental upgrades. EUROPEAN PAPERS net sales in 2006 were $1.5 billion, compared with $1.4 billion in 2005 and $1.5 billion in 2004. Sales volumes in 2006 were higher than in 2005 at our Eastern European mills due to stronger market demand. Average sales price realizations increased in 2006 in both Eastern and Western European markets. Operating earnings in 2006 rose 20% from 2005, but were 15% below 2004 levels. The improvement in 2006 compared with 2005 A reconciliation of the amounts included in the computation of earnings per common share from continuing operations, and diluted earnings per common share from continuing operations is as follows:
<table><tr><td><i>In millions, except per share amounts</i></td><td> 2006</td><td>2005</td><td>2004</td></tr><tr><td>Earnings from continuing operations</td><td>$1,282</td><td>$684</td><td>$238</td></tr><tr><td>Effect of dilutive securities</td><td>13</td><td>27</td><td>–</td></tr><tr><td> Earnings from continuing operations - assuming dilution</td><td>$1,295</td><td>$711</td><td>$238</td></tr><tr><td>Average common shares outstanding</td><td>476.1</td><td>486.0</td><td>485.8</td></tr><tr><td>Effect of dilutive securities</td><td></td><td></td><td></td></tr><tr><td>Restricted performance share plan</td><td>3.0</td><td>0.8</td><td>–</td></tr><tr><td>Stock options</td><td>0.2</td><td>2.9</td><td>2.6</td></tr><tr><td>Contingently convertible debt</td><td>9.4</td><td>20.0</td><td>–</td></tr><tr><td> Average common shares outstanding - assuming dilution</td><td>488.7</td><td>509.7</td><td>488.4</td></tr><tr><td> Earnings per common share from continuing operations</td><td>$2.69</td><td>$1.41</td><td>$0.49</td></tr><tr><td> Diluted earnings per common share from continuing operations</td><td>$2.65</td><td>$1.40</td><td>$0.49</td></tr></table>
Note: If an amount does not appear in the above table, the security was antidilutive for the period presented. NOTE 3 INDUSTRY SEGMENT INFORMATION Financial information by industry segment and geographic area for 2006, 2005 and 2004 is presented on pages 43 and 44. NOTE 4 RECENT ACCOUNTING DEVELOPMENTS EMPLOYERS’ ACCOUNTING FOR DEFINED BENEFIT PENSION AND OTHER POSTRETIREMENT PLANS In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No.158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an Amendment of FASB Statements No.87, 88, 106, and 132(R). ” This statement requires a calendar year-end company with publicly traded equity securities that sponsors a postretirement benefit plan to fully recognize, as an asset or liability, the overfunded or underfunded status of its benefit plan(s) in its 2006 year-end balance sheet. It also requires a company to measure its plan assets and benefit obligations as of its year-end balance sheet date beginning with fiscal years ending after December 15, 2008. The Company adopted the provisions of this standard as of December 31, 2006, recording an additional liability of $492 million and an after-tax charge to Other comprehensive income of $350 million for its defined benefit and postretirement benefit plans. FAIR VALUE MEASUREMENTS In September 2006, the FASB also issued SFAS No.157, “Fair Value Measurements,” which provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. It also emphasizes that fair value is a market-based measurement, not an entityspecific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, and is to be applied prospectively as of the beginning of the year in which it is initially applied. The Company is currently evaluating the provisions of this statement. ACCOUNTING FOR PLANNED MAJOR MAINTENANCE ACTIVITIES In September 2006, the FASB issued FASB Staff Position (FSP) No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities,” which permits the application of three alternative methods of accounting for planned major maintenance activities: the direct expense, built-in-overhaul, and deferral methods. The FSP is effective for the first fiscal year beginning after December 15, 2006. International Paper will adopt the direct expense method of accounting for these costs in 2007 with no impact on its annual consolidated financial statements. ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES In June 2006, the FASB issued FASB Interpretation No.48 (FIN 48), “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No.109. ” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on classification, interest and penalties, accounting in interim periods and transition, and significantly expands income tax disclosure requirements. It applies to all tax positions accounted for in accordance with SFAS No.109 and is effective for fiscal years beginning after December 15, 2006. International Paper will apply the provisions of this interpretation beginning CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
<table><tr><td><i>In millions</i></td><td>Common Stock Issued</td><td>Paid-in Capital</td><td>Retained Earnings</td><td>Accumulated Other Comprehensive Income (Loss)</td><td>Treasury Stock</td><td>Total International Paper Shareholders’ Equity</td><td>Noncontrolling Interest</td><td>Total Equity</td></tr><tr><td> <i>BALANCE, JANUARY 1, 2007</i></td><td>$493</td><td>$6,735</td><td>$3,737</td><td>$-1,564</td><td>$1,438</td><td>$7,963</td><td>$213</td><td>$8,176</td></tr><tr><td>Issuance of stock for various plans, net</td><td>1</td><td>20</td><td>–</td><td>–</td><td>-181</td><td>202</td><td>–</td><td>202</td></tr><tr><td>Repurchase of stock</td><td>–</td><td>–</td><td>–</td><td>–</td><td>1,224</td><td>-1,224</td><td>–</td><td>-1,224</td></tr><tr><td>Cash dividends – Common Stock</td><td>–</td><td>–</td><td>-436</td><td>–</td><td>–</td><td>-436</td><td>–</td><td>-436</td></tr><tr><td>Dividends paid to noncontrolling interests by subsidiary</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>-10</td><td>-10</td></tr><tr><td>Repurchase of noncontrolling interests</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>-28</td><td>-28</td></tr><tr><td>Noncontrolling interests of acquired entities</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>25</td><td>25</td></tr><tr><td>Comprehensive income (loss):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net earnings</td><td>–</td><td>–</td><td>1,168</td><td>–</td><td>–</td><td>1,168</td><td>24</td><td>1,192</td></tr><tr><td>Pension and postretirement divestitures, amortization of prior service costs and net loss:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. plans (less tax of $72)</td><td>–</td><td>–</td><td>–</td><td>98</td><td>–</td><td>98</td><td>–</td><td>98</td></tr><tr><td>Pension and postretirement liability adjustments:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. plans (less tax of $228)</td><td>–</td><td>–</td><td>–</td><td>367</td><td>–</td><td>367</td><td>–</td><td>367</td></tr><tr><td>Non-U.S. plans (less tax of $7)</td><td>–</td><td>–</td><td>–</td><td>26</td><td>–</td><td>26</td><td>–</td><td>26</td></tr><tr><td>Change in cumulative foreign currency translation adjustment</td><td>–</td><td>–</td><td>–</td><td>591</td><td>–</td><td>591</td><td>4</td><td>595</td></tr><tr><td>Net gains on cash flow hedging derivatives:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net gain arising during the period (less tax of $5)</td><td>–</td><td>–</td><td>–</td><td>33</td><td>–</td><td>33</td><td>–</td><td>33</td></tr><tr><td>Less: Reclassification adjustment for gains included in net earnings (less tax of $3)</td><td>–</td><td>–</td><td>–</td><td>-22</td><td>–</td><td>-22</td><td>–</td><td>-22</td></tr><tr><td>Total comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>2,289</td></tr><tr><td>Adoption of FIN 48 (Note 2)</td><td>–</td><td>–</td><td>-94</td><td>–</td><td>–</td><td>-94</td><td>–</td><td>-94</td></tr><tr><td> <i>BALANCE, DECEMBER 31, 2007</i></td><td>494</td><td>6,755</td><td>4,375</td><td>-471</td><td>2,481</td><td>8,672</td><td>228</td><td>8,900</td></tr><tr><td>Issuance of stock for various plans, net</td><td>–</td><td>-34</td><td>–</td><td>–</td><td>-143</td><td>109</td><td>–</td><td>109</td></tr><tr><td>Repurchase of stock</td><td>–</td><td>–</td><td>–</td><td>–</td><td>47</td><td>-47</td><td>–</td><td>-47</td></tr><tr><td>Retirement of treasury stock</td><td>-60</td><td>-876</td><td>-1,231</td><td>–</td><td>-2,167</td><td>–</td><td>–</td><td>–</td></tr><tr><td>Cash dividends – Common Stock</td><td>–</td><td>–</td><td>-432</td><td>–</td><td>–</td><td>-432</td><td>–</td><td>-432</td></tr><tr><td>Dividends paid to noncontrolling interests by subsidiary</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>-10</td><td>-10</td></tr><tr><td>Noncontrolling interests of acquired entities</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>–</td><td>9</td><td>9</td></tr><tr><td>Comprehensive income (loss):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net earnings (loss)</td><td>–</td><td>–</td><td>-1,282</td><td>–</td><td>–</td><td>-1,282</td><td>3</td><td>-1,279</td></tr><tr><td>Amortization of pension and postretirement prior service costs and net loss:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. plans (less tax of $58)</td><td>–</td><td>–</td><td>–</td><td>82</td><td>–</td><td>82</td><td>–</td><td>82</td></tr><tr><td>Pension and postretirement liability adjustments:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. plans (less tax of $1,128)</td><td>–</td><td>–</td><td>–</td><td>-1,857</td><td>–</td><td>-1,857</td><td>–</td><td>-1,857</td></tr><tr><td>Non-U.S. plans (less tax of $1)</td><td>–</td><td>–</td><td>–</td><td>-26</td><td>–</td><td>-26</td><td>–</td><td>-26</td></tr><tr><td>Change in cumulative foreign currency translation adjustment</td><td>–</td><td>–</td><td>–</td><td>-889</td><td>–</td><td>-889</td><td>2</td><td>-887</td></tr><tr><td>Net losses on cash flow hedging derivatives:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net losses arising during the period (less tax of $61)</td><td>–</td><td>–</td><td>–</td><td>-106</td><td>–</td><td>-106</td><td>–</td><td>-106</td></tr><tr><td>Less: Reclassification adjustment for gains included in net earnings (less tax of $16)</td><td>–</td><td>–</td><td>–</td><td>-55</td><td>–</td><td>-55</td><td>–</td><td>-55</td></tr><tr><td>Total comprehensive income</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td>-4,128</td></tr></table>
The accompanying notes are an integral part of these financial statements. |
119,134 | What is the total amount of Average shares outstanding of Year Ended December 31, 2003 2, Net sales of 2012, and TOTAL MARKET VALUE OF COMMON STOCK PER SHARE DATA of Year Ended December 31, 2002 3,4 is ? | ITEM 6. SELECTED FINANCIAL DATA The Coca-Cola Company and Subsidiaries
<table><tr><td> </td><td colspan="2">Compound Growth Rates </td><td colspan="2">Year Ended December 31,</td></tr><tr><td>(In millions except per share data, ratios and growth rates) </td><td>5 Years </td><td>10 Years </td><td>2003 2</td><td>2002 3,4</td></tr><tr><td> SUMMARY OF OPERATIONS</td><td></td><td></td><td></td><td></td></tr><tr><td>Net operating revenues</td><td>5.2 %</td><td>5.3%</td><td>$ 21,044</td><td>$ 19,564</td></tr><tr><td>Cost of goods sold</td><td>6.9 %</td><td>4.2%</td><td>7,762</td><td>7,105</td></tr><tr><td>Gross profit</td><td>4.3 %</td><td>6.1%</td><td>13,282</td><td>12,459</td></tr><tr><td>Selling, general and administrative expenses</td><td>5.6 %</td><td>5.9%</td><td>7,488</td><td>7,001</td></tr><tr><td>Other operating charges</td><td></td><td></td><td>573</td><td>—</td></tr><tr><td>Operating income</td><td>1.0 %</td><td>5.4%</td><td>5,221</td><td>5,458</td></tr><tr><td>Interest income</td><td></td><td></td><td>176</td><td>209</td></tr><tr><td>Interest expense</td><td></td><td></td><td>178</td><td>199</td></tr><tr><td>Equity income (loss)—net</td><td></td><td></td><td>406</td><td>384</td></tr><tr><td>Other income (loss)—net</td><td></td><td></td><td>-138</td><td>-353</td></tr><tr><td>Gains on issuances of stock by equity investees</td><td></td><td></td><td>8</td><td>—</td></tr><tr><td>Income before income taxes and changes in accounting principles</td><td>1.1 %</td><td>5.6%</td><td>5,495</td><td>5,499</td></tr><tr><td>Income taxes</td><td>-7.2%</td><td>1.4%</td><td>1,148</td><td>1,523</td></tr><tr><td>Net income before changes in accounting principles</td><td>4.2 %</td><td>7.1%</td><td>$ 4,347</td><td>$ 3,976</td></tr><tr><td>Net income</td><td>4.2 %</td><td>7.2%</td><td>$ 4,347</td><td>$ 3,050</td></tr><tr><td>Average shares outstanding</td><td></td><td></td><td>2,459</td><td>2,478</td></tr><tr><td>Average shares outstanding assuming dilution</td><td></td><td></td><td>2,462</td><td>2,483</td></tr><tr><td> PER SHARE DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Income before changes in accounting principles—basic</td><td>4.4 %</td><td>7.7%</td><td>$ 1.77</td><td>$ 1.60</td></tr><tr><td>Income before changes in accounting principles—diluted</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.60</td></tr><tr><td>Basic net income</td><td>4.4 %</td><td>7.7%</td><td>1.77</td><td>1.23</td></tr><tr><td>Diluted net income</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.23</td></tr><tr><td>Cash dividends</td><td>8.0 %</td><td>10.0%</td><td>0.88</td><td>0.80</td></tr><tr><td>Market price on December 31,</td><td>-5.4%</td><td>8.6%</td><td>50.75</td><td>43.84</td></tr><tr><td> TOTAL MARKET VALUE OF COMMON STOCK<sup>1</sup></td><td>-5.6%</td><td>7.9%</td><td>$ 123,908</td><td>$ 108,328</td></tr><tr><td> BALANCE SHEET AND OTHER DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Cash, cash equivalents and current marketable securities</td><td></td><td></td><td>$ 3,482</td><td>$ 2,345</td></tr><tr><td>Property, plant and equipment—net</td><td></td><td></td><td>6,097</td><td>5,911</td></tr><tr><td>Depreciation</td><td></td><td></td><td>667</td><td>614</td></tr><tr><td>Capital expenditures</td><td></td><td></td><td>812</td><td>851</td></tr><tr><td>Total assets</td><td></td><td></td><td>27,342</td><td>24,406</td></tr><tr><td>Long-term debt</td><td></td><td></td><td>2,517</td><td>2,701</td></tr><tr><td>Total debt</td><td></td><td></td><td>5,423</td><td>5,356</td></tr><tr><td>Share-owners' equity</td><td></td><td></td><td>14,090</td><td>11,800</td></tr><tr><td>Total capital<sup>1</sup></td><td></td><td></td><td>19,513</td><td>17,156</td></tr><tr><td> OTHER KEY FINANCIAL MEASURES<sup>1</sup></td><td></td><td></td><td></td><td></td></tr><tr><td>Total debt-to-total capital</td><td></td><td></td><td>27.8%</td><td>31.2%</td></tr><tr><td>Net debt-to-net capital</td><td></td><td></td><td>12.1%</td><td>20.3%</td></tr><tr><td>Return on common equity</td><td></td><td></td><td>33.6%</td><td>34.3%</td></tr><tr><td>Return on capital</td><td></td><td></td><td>24.5%</td><td>24.5%</td></tr><tr><td>Dividend payout ratio</td><td></td><td></td><td>49.8%</td><td>65.1%</td></tr><tr><td>Net cash provided by operations</td><td></td><td></td><td>$ 5,456</td><td>$ 4,742</td></tr></table>
1 Refer to Glossary on pages 103 and 104.2 In 2003, we adopted SFAS No.146, ‘‘Accounting for Costs Associated with Exit or Disposal Activities. ’’ 3 In 2002, we adopted SFAS No.142, ‘‘Goodwill and Other Intangible Assets. ’’ 4 In 2002, we adopted the fair value method provisions of SFAS No.123, ‘‘Accounting for Stock-Based Compensation,’’ and we adopted SFAS No.148, ‘‘Accounting for Stock-Based Compensation—Transition and Disclosure. ’’ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Coca-Cola Company and Subsidiaries NOTE 12: NET CHANGE IN OPERATING ASSETS AND LIABILITIES Net cash provided by operating activities attributable to the net change in operating assets and liabilities is composed of the following (in millions):
<table><tr><td></td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td>Decrease (increase) in trade accounts receivable</td><td>$ 80</td><td>$ -83</td><td>$ -73</td></tr><tr><td>Decrease (increase) in inventories</td><td>111</td><td>-49</td><td>-17</td></tr><tr><td>Decrease (increase) in prepaid expenses and other assets</td><td>-276</td><td>74</td><td>-349</td></tr><tr><td>Decrease in accounts payable and accrued expenses</td><td>-164</td><td>-442</td><td>-179</td></tr><tr><td>Increase in accrued taxes</td><td>53</td><td>20</td><td>247</td></tr><tr><td>Increase (decrease) in other liabilities</td><td>28</td><td>73</td><td>-91</td></tr><tr><td></td><td>$ -168</td><td>$ -407</td><td>$ -462</td></tr></table>
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS Prior to 2002, our Company accounted for our stock option plans and restricted stock plans under the recognition and measurement provisions of APB No.25 and related interpretations. Effective January 1, 2002, our Company adopted the preferable fair value recognition provisions of SFAS No.123. Our Company selected the modified prospective method of adoption described in SFAS No.148. Compensation cost recognized in 2002 was the same as that which would have been recognized had the fair value method of SFAS No.123 been applied from its original effective date. Refer to Note 1. In accordance with the provisions of SFAS No.123 and SFAS No.148, $422 million and $365 million, respectively, were recorded for total stock-based compensation expense in 2003 and 2002. Of the $422 million recorded in 2003, $407 million was recorded in selling, general and administrative expenses and $15 million was recorded in other operating charges (refer to Note 17). In accordance with APB No.25, total stock-based compensation expense was $41 million for the year ended December 31, 2001. Stock Option Plans Under our 1991 Stock Option Plan (the ‘‘1991 Option Plan’’), a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options and stock appreciation rights granted under the 1991 Option Plan. The stock appreciation rights permit the holder, upon surrendering all or part of the related stock option, to receive cash, common stock or a combination thereof, in an amount up to 100 percent of the difference between the market price and the option price. Options to purchase common stock under the 1991 Option Plan have been granted to Company employees at fair market value at the date of grant. The 1999 Stock Option Plan (the ‘‘1999 Option Plan’’) was approved by share owners in April of 1999. Following the approval of the 1999 Option Plan, no grants were made from the 1991 Option Plan, and shares available under the 1991 Option Plan were no longer available to be granted. Under the 1999 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 1999 Option Plan. Options to purchase common stock under the 1999 Option Plan have been granted to Company employees at fair market value at the date of grant. The 2002 Stock Option Plan (the ‘‘2002 Option Plan’’) was approved by share owners in April of 2002. Under the 2002 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 2002 Option Plan. 2011 compared to 2010 MST’s net sales for 2011 decreased $311 million, or 4%, compared to 2010. The decrease was attributable to decreased volume of approximately $390 million for certain ship and aviation system programs (primarily Maritime Patrol Aircraft and PTDS) and approximately $75 million for training and logistics solutions programs. Partially offsetting these decreases was higher sales of about $165 million from production on the LCS program. MST’s operating profit for 2011 decreased $68 million, or 10%, compared to 2010. The decrease was attributable to decreased operating profit of approximately $55 million as a result of increased reserves for contract cost matters on various ship and aviation system programs (including the terminated presidential helicopter program) and approximately $40 million due to lower volume and increased reserves on training and logistics solutions. Partially offsetting these decreases was higher operating profit of approximately $30 million in 2011 primarily due to the recognition of reserves on certain undersea systems programs in 2010. Adjustments not related to volume, including net profit rate adjustments described above, were approximately $55 million lower in 2011 compared to 2010. Backlog Backlog increased in 2012 compared to 2011 mainly due to increased orders on ship and aviation system programs (primarily MH-60 and LCS), partially offset decreased orders and higher sales volume on integrated warfare systems and sensors programs (primarily Aegis). Backlog decreased slightly in 2011 compared to 2010 primarily due to higher sales volume on various integrated warfare systems and sensors programs. Trends We expect MST’s net sales to decline in 2013 in the low single digit percentage range as compared to 2012 due to the completion of PTDS deliveries in 2012 and expected lower volume on training services programs. Operating profit and margin are expected to increase slightly from 2012 levels primarily due to anticipated improved contract performance. Space Systems Our Space Systems business segment is engaged in the research and development, design, engineering, and production of satellites, strategic and defensive missile systems, and space transportation systems. Space Systems is also responsible for various classified systems and services in support of vital national security systems. Space Systems’ major programs include the Space-Based Infrared System (SBIRS), Advanced Extremely High Frequency (AEHF) system, Mobile User Objective System (MUOS), Global Positioning Satellite (GPS) III system, Geostationary Operational Environmental Satellite R-Series (GOES-R), Trident II D5 Fleet Ballistic Missile, and Orion. Operating results for our Space Systems business segment include our equity interests in United Launch Alliance (ULA), which provides expendable launch services for the U. S. Government, United Space Alliance (USA), which provided processing activities for the Space Shuttle program and is winding down following the completion of the last Space Shuttle mission in 2011, and a joint venture that manages the U. K. ’s Atomic Weapons Establishment program. Space Systems’ operating results included the following (in millions):
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Net sales</td><td>$8,347</td><td>$8,161</td><td>$8,268</td></tr><tr><td>Operating profit</td><td>1,083</td><td>1,063</td><td>1,030</td></tr><tr><td>Operating margins</td><td>13.0%</td><td>13.0%</td><td>12.5%</td></tr><tr><td>Backlog at year-end</td><td>18,100</td><td>16,000</td><td>17,800</td></tr></table>
2012 compared to 2011 Space Systems’ net sales for 2012 increased $186 million, or 2%, compared to 2011. The increase was attributable to higher net sales of approximately $150 million due to increased commercial satellite deliveries (two commercial satellites delivered in 2012 compared to one during 2011); about $125 million from the Orion program due to higher volume and an increase in risk retirements; and approximately $70 million from increased volume on various strategic and defensive missile programs. Partially offsetting the increases were lower net sales of approximately $105 million from certain government satellite programs (primarily SBIRS and MUOS) as a result of decreased volume and a decline in risk retirements; and about $55 million from the NASA External Tank program, which ended in connection with the completion of the Space Shuttle program in 2011. |
3.8 | what is the mathematical range for average train speed ( mph ) for 2008-2010? | Table of Contents AAG’s Results of Operations In 2014, we realized operating income of $4.2 billion and net income of $2.9 million. Our 2014 net income included net special operating charges of $824 million and total net special charges of $1.3 billion. Excluding the effects of these special charges, we realized operating income of $5.1 billion and net income of $4.2 billion. We completed the Merger on December 9, 2013. Under GAAP, AAG’s results do not include the financial results of US Airways Group prior to the closing of the Merger. Accordingly, our 2014 period GAAP results are not comparable to the GAAP results for the 2013 or 2012 periods as those periods exclude the results of US Airways Group except for the 23 day post-Merger period from December 9, 2013 to December 31, 2013. When compared to the combined separate company results of AAG and US Airways Group for 2013, our 2014 net income excluding net special charges improved by $2.2 billion. In 2013, on a standalone basis,AAG reported a net loss of $1.6 billion and US Airways Group reported net income of $392 million. Excluding the effects of net special charges, AAG and US Airways Group reported 2013 net income of $1.2 billion and $786 million, respectively. When compared to the combined separate company results ofAAG and US Airways Group for 2012, our 2013 combined net income excluding net special charges improved by $1.5 billion. In 2012, on a standalone basis, AAG reported a net loss of $1.9 billion and US Airways Group reported net income of $637 million. Excluding the effects of net special charges, AAG reported a 2012 net loss of $130 million and US Airways Group reported net income of $537 million. The components of net special items in our accompanying consolidated statements of operations are as follows (in millions):
<table><tr><td rowspan="2"></td><td colspan="3">Year Ended December 31,</td></tr><tr><td> 2014</td><td>2013</td><td>2012</td></tr><tr><td>Other revenue special item, net -1</td><td>$—</td><td>$-31</td><td>$—</td></tr><tr><td>Mainline operating special items, net -2</td><td>800</td><td>559</td><td>386</td></tr><tr><td>Regional operating special items, net</td><td>24</td><td>8</td><td>1</td></tr><tr><td>Nonoperating special items, net -3</td><td>132</td><td>211</td><td>-280</td></tr><tr><td>Reorganization items, net -4</td><td>—</td><td>2,655</td><td>2,208</td></tr><tr><td>Income tax special items, net -5</td><td>346</td><td>-324</td><td>-569</td></tr><tr><td>Total</td><td>$1,302</td><td>$3,078</td><td>$1,746</td></tr></table>
(1) In 2013, other revenue special item, net included a credit to other revenues related to a change in accounting method resulting from the modification of AAG’s AAdvantage miles agreement with Citibank. (2) In 2014, mainline operating special items, net included $810 million of Merger integration expenses related to information technology, alignment of labor union contracts, professional fees, severance and retention, share-based compensation, divestiture of London Heathrow Slots, fleet restructuring, re-branding of aircraft and airport facilities, relocation and training. In addition, we recorded a net charge of $81 million for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations, $164 million in other special charges, including an $81 million charge to revise prior estimates of certain aircraft residual values, and other spare parts asset impairments, as well as $54 million in charges primarily relating to the buyout of certain aircraft leases. These charges were offset in part by a $309 million gain on the sale of Slots at DCA. In 2013, mainline operating special items, net included $443 million of primarily Merger related expenses due to the alignment of labor union contracts, professional fees, severance, share-based compensation and fees for US Airways to exit the Star Alliance and its codeshare agreement with United Airlines. In addition, we recorded a $107 million charge related to American’s pilot long-term disability obligation, a $43 million See table below for a reconciliation of business combination related items:
<table><tr><td>$ in millions</td><td>2017</td><td>2016</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>Business combination related:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee compensation expense<sup>(a)</sup></td><td>5.8</td><td>7.0</td><td>—</td><td>—</td><td>2.4</td></tr><tr><td>Transaction and integration expense<sup>(b)</sup></td><td>20.6</td><td>1.4</td><td>2.2</td><td>—</td><td>5.2</td></tr><tr><td>Intangible amortization expense<sup>(c)</sup></td><td>17.4</td><td>13.9</td><td>10.6</td><td>12.6</td><td>15.4</td></tr><tr><td>Adjustments to operating income</td><td>43.8</td><td>22.3</td><td>12.8</td><td>12.6</td><td>23.0</td></tr><tr><td>Change in contingent consideration estimates<sup>(d)</sup></td><td>-7.6</td><td>7.4</td><td>-27.1</td><td>—</td><td>—</td></tr><tr><td>Foreign exchange gain related to business acquisitions<sup>(e)</sup></td><td>-12.1</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Other-than-temporary impairment<sup>(f)</sup></td><td>—</td><td>17.8</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Taxation:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Taxation on employee compensation expense<sup>(a)</sup></td><td>-2.1</td><td>-2.7</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Taxation on transaction and integration<sup>(b)</sup></td><td>-5.9</td><td>-0.5</td><td>-0.6</td><td>—</td><td>-2.1</td></tr><tr><td>Taxation on amortization<sup>(c)</sup></td><td>-1.6</td><td>-1.3</td><td>-1.5</td><td>-1.6</td><td>-1.5</td></tr><tr><td>Deferred taxation<sup>(g)</sup></td><td>19.6</td><td>19.3</td><td>20.1</td><td>21.8</td><td>21.3</td></tr><tr><td>Taxation on change in contingent consideration estimates<sup>(d)</sup></td><td>2.9</td><td>-2.8</td><td>10.3</td><td>—</td><td>—</td></tr><tr><td>Taxation on foreign exchange gain related to businessacquisitions<sup>(e)</sup></td><td>2.3</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>(Income)/loss from discontinued operations, net of taxes<sup>(h)</sup></td><td>—</td><td>—</td><td>—</td><td>3.4</td><td>-64.5</td></tr><tr><td>Adjustments to net income attributable to Invesco Ltd.</td><td>39.3</td><td>59.5</td><td>14.0</td><td>36.2</td><td>-23.8</td></tr></table>
a. Employee compensation expenses oincurred in f $5.8 million 2017 are related to our European ETF acquisition, while $7.0 million ed with the acquisition of Jemstep, a market incurred in 2016 are associat -leading provider of advisor- focused digital solutions. Expenses in 2013 are related to employee severance expenses associated with the cessation of activities from a previous acquisition. b. Transaction and integration expenses reflect the legal, regulatory, advisory, valuation, integration-related employee incentive awards, other professional or consulting fees and general and administrative costs, which includes travel costs related to transactions and the costs of temporary staf involved in executing the transaction, and the post f f -closing costs of integrating the acquired business into the company’s existing operations, including incremental costs associated with achieving synergy savings. c. Intangible amortization expense is associated with intangible assets that are identified from acquisition of a business and are amortized on a straight-line basis over useful lives. See Item 8, Financial Statements and Supplementary Data, Note 5 - “Intangible Assets” for detail. d. During 2015, the company acquired investment management contracts from Deutsche Bank and the purchase price was solely comprised of contingent consideration payable in future periods. Adjustment to the fair value of contingent consideration liability is a an increase o$7.4 millio$27.1 decrease of $7.6 million in 2017, f n in 2016 and a decrease of millioItem 8, Financial Statements and Supplementary Data, Note 2 n in 2015. See - “Fair Value of Assets and Liabilities” for detail. e. Other gains and losses for 2017 includes a realized gain of $12.1 million related to revaluation of Euros held in the U. K. in anticipation of payment for the European ETF business acquisition. f. Other-than-temporary impairment includes an impairment charge o$17.8 million hat is related to the f in 2016 t acquisition of Invesco Asset Management (India) Private Limited. g. While finite-lived intangible assets are amortized under U. S. GAAP, there is no amortization charge on goodwill and indefinite-lived intangibles. In certain qualifying situations, these can be amortized for tax purposes, generally over a 15-year period, as is the case in the U. S. These deferred tax liabilities represent tax benefits that are not included in the Consolidated Statements of Income absenan impairment charge or the dispos t al of the related business. The company receives these tax benefits but does not anticipate a sale or ipairment of these assets in the foreseeable future, an Operating/Performance Statistics Railroad performance measures reported to the AAR, as well as other performance measures, are included in the table below:
<table><tr><td></td><td><i>2010</i></td><td><i>2009</i></td><td><i>2008</i></td><td><i>% Change</i> <i>2010 v 2009</i></td><td><i>% Change</i><i>2009 v 2008</i></td></tr><tr><td>Average train speed (miles per hour)</td><td>26.2</td><td>27.3</td><td>23.5</td><td>-4%</td><td>16%</td></tr><tr><td>Average terminal dwell time (hours)</td><td>25.4</td><td>24.8</td><td>24.9</td><td>2%</td><td>-</td></tr><tr><td>Average rail car inventory (thousands)</td><td>274.4</td><td>283.1</td><td>300.7</td><td>-3%</td><td>-6%</td></tr><tr><td>Gross ton-miles (billions)</td><td>932.4</td><td>846.5</td><td>1,020.4</td><td>10%</td><td>-17%</td></tr><tr><td>Revenue ton-miles (billions)</td><td>520.4</td><td>479.2</td><td>562.6</td><td>9%</td><td>-15%</td></tr><tr><td>Operating ratio</td><td>70.6</td><td>76.1</td><td>77.4</td><td>-5.5 pt</td><td>-1.3 pt</td></tr><tr><td>Employees (average)</td><td>42,884</td><td>43,531</td><td>48,242</td><td>-1%</td><td>-10%</td></tr><tr><td>Customer satisfaction index</td><td>89</td><td>88</td><td>83</td><td>1 pt</td><td>5 pt</td></tr></table>
Average Train Speed – Average train speed is calculated by dividing train miles by hours operated on our main lines between terminals. Maintenance activities and weather disruptions, combined with higher volume levels, led to a 4% decrease in average train speed in 2010 compared to a record set in 2009. Overall, we continued operating a fluid and efficient network during the year. Lower volume levels, ongoing network management initiatives, and productivity improvements contributed to a 16% improvement in average train speed in 2009 compared to 2008. Average Terminal Dwell Time – Average terminal dwell time is the average time that a rail car spends at our terminals. Lower average terminal dwell time improves asset utilization and service. Average terminal dwell time increased 2% in 2010 compared to 2009, driven in part by our network plan to increase the length of numerous trains to improve overall efficiency, which resulted in higher terminal dwell time for some cars. Average terminal dwell time improved slightly in 2009 compared to 2008 due to lower volume levels combined with initiatives to expedite delivering rail cars to our interchange partners and customers. Average Rail Car Inventory – Average rail car inventory is the daily average number of rail cars on our lines, including rail cars in storage. Lower average rail car inventory reduces congestion in our yards and sidings, which increases train speed, reduces average terminal dwell time, and improves rail car utilization. Average rail car inventory decreased 3% in 2010 compared to 2009, while we handled 13% increases in carloads during the period compared to 2009. We maintained more freight cars off-line and retired a number of old freight cars, which drove the decreases. Average rail car inventory decreased 6% in 2009 compared to 2008 driven by a 16% decrease in volume. In addition, as carloads decreased, we stored more freight cars off-line. Gross and Revenue Ton-Miles – Gross ton-miles are calculated by multiplying the weight of loaded and empty freight cars by the number of miles hauled. Revenue ton-miles are calculated by multiplying the weight of freight by the number of tariff miles. Gross and revenue-ton-miles increased 10% and 9% in 2010 compared to 2009 due to a 13% increase in carloads. Commodity mix changes (notably automotive shipments) drove the variance in year-over-year growth between gross ton-miles, revenue ton-miles and carloads. Gross and revenue ton-miles decreased 17% and 15% in 2009 compared to 2008 due to a 16% decrease in carloads. Commodity mix changes (notably automotive shipments, which were 30% lower in 2009 versus 2008) drove the difference in declines between gross ton-miles and revenue tonmiles. Operating Ratio – Operating ratio is defined as our operating expenses as a percentage of operating revenue. Our operating ratio improved 5.5 points to 70.6% in 2010 and 1.3 points to 76.1% in 2009. Efficiently leveraging volume increases, core pricing gains, and productivity initiatives drove the improvement in 2010 and more than offset the impact of higher fuel prices during the year. Core pricing gains, lower fuel prices, network management initiatives, and improved productivity drove the improvement in 2009 and more than offset the 16% volume decline. Employees – Employee levels were down 1% in 2010 compared to 2009 despite a 13% increase in volume levels. We leveraged the additional volumes through network efficiencies and other productivity initiatives. In addition, we successfully managed the growth of our full-time-equivalent train and engine force levels at a rate less than half of our carload growth in 2010. All other operating functions and |
135.8 | What do all elements sum up in 2012 , excluding Gross profit and Operating expenses? (in million) | Supplementary Information on Oil and Gas Producing Activities (Unaudited) CONTINUED Summary of Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
<table><tr><td><i>(In millions)</i></td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Sales and transfers of oil and gas produced, net of production, transportation and administrative costs</td><td>$-5,312</td><td>$-3,754</td><td>$-2,689</td></tr><tr><td>Net changes in prices and production, transportation and administrative costs related to future production</td><td>-1,342</td><td>6,648</td><td>771</td></tr><tr><td>Extensions, discoveries and improved recovery, less related costs</td><td>1,290</td><td>700</td><td>1,349</td></tr><tr><td>Development costs incurred during the period</td><td>1,251</td><td>1,030</td><td>609</td></tr><tr><td>Changes in estimated future development costs</td><td>-527</td><td>-552</td><td>-628</td></tr><tr><td>Revisions of previous quantity estimates</td><td>1,319</td><td>820</td><td>948</td></tr><tr><td>Net changes in purchases and sales of minerals in place</td><td>30</td><td>4,557</td><td>33</td></tr><tr><td>Accretion of discount</td><td>1,882</td><td>1,124</td><td>757</td></tr><tr><td>Net change in income taxes</td><td>-660</td><td>-6,694</td><td>-627</td></tr><tr><td>Timing and other</td><td>-14</td><td>307</td><td>97</td></tr><tr><td>Net change for the year</td><td>-2,083</td><td>4,186</td><td>620</td></tr><tr><td>Beginning of year</td><td>10,601</td><td>6,415</td><td>5,795</td></tr><tr><td>End of year</td><td>$8,518</td><td>$10,601</td><td>$6,415</td></tr><tr><td>Net change for the year from discontinued operations</td><td>$-216</td><td>$162</td><td>$-152</td></tr></table>
Information Available on the Company’s Web Site Additional information regarding Snap-on and its products is available on the company’s web site at www. snapon. com. Snap-on is not including the information contained on its web site as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. Snap-on’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Definitive Proxy Statements on Schedule 14A and Current Reports on Form 8-K, as well as any amendments to those reports, are made available to the public at no charge, other than an investor’s own internet access charges, through the Investor Information section of the company’s web site at www. snapon. com. Snap-on makes such material available on its web site as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). Copies of any materials the company files with the SEC can also be obtained free of charge through the SEC’s web site at www. sec. gov. The SEC’s Public Reference Room can be contacted at 100 F Street, N. E. , Washington, D. C. 20549, or by calling 1-800-732-0330. In addition, Snap-on’s (i) charters for the Audit, Corporate Governance and Nominating, and Organization and Executive Compensation Committees of the company’s Board of Directors; (ii) Corporate Governance Guidelines; and (iii) Code of Business Conduct and Ethics are available on Snap-on’s web site. Snap-on will also post any amendments to these documents, or information about any waivers granted to directors or executive officers with respect to the Code of Business Conduct and Ethics, on the company’s web site at www. snapon. com. Products and Services Tools, Diagnostics and Repair Information, and Equipment Snap-on offers a broad line of products and complementary services that are grouped into three product categories: (i) tools; (ii) diagnostics and repair information; and (iii) equipment. Further product line information is not presented as it is not practicable to do so. The following table shows the consolidated net sales of these product categories for the last three years:
<table><tr><td></td><td colspan="3">Net Sales</td></tr><tr><td><i>(Amounts in millions)</i></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Product Category:</td><td></td><td></td><td></td></tr><tr><td>Tools</td><td>$1,729.4</td><td>$1,667.3</td><td>$1,545.1</td></tr><tr><td>Diagnostics and repair information</td><td>619.8</td><td>613.7</td><td>563.3</td></tr><tr><td>Equipment</td><td>588.7</td><td>573.2</td><td>510.8</td></tr><tr><td></td><td>$2,937.9</td><td>$2,854.2</td><td>$2,619.2</td></tr></table>
The tools product category includes hand tools, power tools and tool storage products. Hand tools include wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments and other similar products. Power tools include cordless (battery), pneumatic (air), hydraulic, and corded (electric) tools, such as impact wrenches, ratchets, chisels, drills, sanders, polishers and similar products. Tool storage includes tool chests, roll cabinets, tool control systems and other similar products. The majority of products are manufactured by Snap-on and, in completing the product offering, other items are purchased from external manufacturers. The diagnostics and repair information product category includes handheld and PC-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, OEM purchasing facilitation services, and warranty management systems and analytics to help OEM dealership service and repair shops manage and track performance. The equipment product category includes solutions for the diagnosis and service of vehicles and industrial equipment. Products include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane systems, collision repair equipment, air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers and hoists. Snap-on supports the sale of its diagnostics and vehicle service shop equipment by offering training programs as well as after sales support for its customers, primarily focusing on the technologies and the application of specific products developed and marketed by Snap-on. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) Segment gross profit of $105.0 million in the fourth quarter of 2012 decreased $1.4 million from 2011 levels. Gross margin of 38.1% in the quarter improved 210 basis points from 36.0% last year primarily due to lower restructuring costs as well as savings from ongoing RCI initiatives, particularly in Europe. No restructuring costs were incurred in the fourth quarter of 2012; gross profit in the fourth quarter of 2011 included $2.5 million of restructuring costs. Segment operating expenses of $73.1 million in the fourth quarter of 2012 decreased $0.3 million from 2011 levels. The operating expense margin of 26.5% in the quarter increased 170 basis points from 24.8% last year primarily as a result of the lower sales. As a result of these factors, segment operating earnings of $31.9 million in the fourth quarter of 2012, including $1.2 million of favorable foreign currency effects, decreased $1.1 million, or 3.3%, from 2011 levels. Operating margin for the Commercial & Industrial Group of 11.6% in the fourth quarter of 2012 improved 40 basis points from 11.2% last year. Snap-on Tools Group
<table><tr><td></td><td colspan="4">Fourth Quarter</td><td colspan="2"></td></tr><tr><td><i>(Amounts in millions)</i></td><td colspan="2">2012</td><td colspan="2">2011</td><td colspan="2">Change</td></tr><tr><td>Segment net sales</td><td>$321.6</td><td>100.0%</td><td>$292.8</td><td>100.0%</td><td>$28.8</td><td>9.8%</td></tr><tr><td>Cost of goods sold</td><td>-185.8</td><td>-57.8%</td><td>-168.9</td><td>-57.7%</td><td>-16.9</td><td>-10.0%</td></tr><tr><td>Gross profit</td><td>135.8</td><td>42.2%</td><td>123.9</td><td>42.3%</td><td>11.9</td><td>9.6%</td></tr><tr><td>Operating expenses</td><td>-90.2</td><td>-28.0%</td><td>-84.3</td><td>-28.8%</td><td>-5.9</td><td>-7.0%</td></tr><tr><td>Segment operating earnings</td><td>$45.6</td><td>14.2%</td><td>$39.6</td><td>13.5%</td><td>$6.0</td><td>15.2%</td></tr></table>
Segment net sales of $321.6 million in the fourth quarter of 2012 increased $28.8 million, or 9.8%, from 2011 levels. Excluding $1.4 million of favorable foreign currency translation, organic sales increased $27.4 million, or 9.3%, reflecting high single-digit sales increases across both the company’s U. S. and international franchise operations. Segment gross profit of $135.8 million in the fourth quarter of 2012 increased $11.9 million from 2011 levels. Gross margin of 42.2% in the quarter compared with 42.3% last year. No restructuring costs were incurred in the fourth quarter of 2012; gross profit in the fourth quarter of 2011 included $0.3 million of restructuring costs. Segment operating expenses of $90.2 million in the fourth quarter of 2012 increased $5.9 million from 2011 levels primarily due to higher volume-related and other expenses. The operating expense margin of 28.0% in the quarter improved 80 basis points from 28.8% last year primarily due to benefits from sales volume leverage. As a result of these factors, segment operating earnings of $45.6 million in the fourth quarter of 2012, including $1.2 million of unfavorable foreign currency effects, increased $6.0 million, or 15.2%, from 2011 levels. Operating margin for the Snap-on Tools Group of 14.2% in the fourth quarter of 2012 increased 70 basis points from 13.5% last year. Repair Systems & Information Group
<table><tr><td></td><td colspan="4">Fourth Quarter</td><td colspan="2"></td></tr><tr><td><i>(Amounts in millions)</i></td><td colspan="2">2012</td><td colspan="2">2011</td><td colspan="2">Change</td></tr><tr><td>External net sales</td><td>$194.8</td><td>80.6%</td><td>$193.0</td><td>81.6%</td><td>$1.8</td><td>0.9%</td></tr><tr><td>Intersegment net sales</td><td>46.8</td><td>19.4%</td><td>43.5</td><td>18.4%</td><td>3.3</td><td>7.6%</td></tr><tr><td>Segment net sales</td><td>241.6</td><td>100.0%</td><td>236.5</td><td>100.0%</td><td>5.1</td><td>2.2%</td></tr><tr><td>Cost of goods sold</td><td>-130.4</td><td>-54.0%</td><td>-131.0</td><td>-55.4%</td><td>0.6</td><td>0.5%</td></tr><tr><td>Gross profit</td><td>111.2</td><td>46.0%</td><td>105.5</td><td>44.6%</td><td>5.7</td><td>5.4%</td></tr><tr><td>Operating expenses</td><td>-55.8</td><td>-23.1%</td><td>-56.3</td><td>-23.8%</td><td>0.5</td><td>0.9%</td></tr><tr><td>Segment operating earnings</td><td>$55.4</td><td>22.9%</td><td>$49.2</td><td>20.8%</td><td>$6.2</td><td>12.6%</td></tr></table>
Segment net sales of $241.6 million in the fourth quarter of 2012 increased $5.1 million, or 2.2%, from 2011 levels. Excluding $1.6 million of unfavorable foreign currency translation, organic sales increased $6.7 million, or 2.9%, including low single-digit gains in both sales of diagnostics and repair information products to repair shop owners and managers and sales to OEM dealerships. |
1,375 | for the terrestar acquisition what will the final cash purchase price be in millions paid upon closing? | DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued F-28 This transaction was accounted for as a business combination using purchase price accounting. The allocation of the purchase consideration is in the table below.
<table><tr><td></td><td>Purchase Price Allocation (In thousands)</td></tr><tr><td>Cash</td><td>$107,061</td></tr><tr><td>Current assets</td><td>153,258</td></tr><tr><td>Property and equipment</td><td>28,663</td></tr><tr><td>Acquisition intangibles</td><td>17,826</td></tr><tr><td>Other noncurrent assets</td><td>12,856</td></tr><tr><td>Current liabilities</td><td>-86,080</td></tr><tr><td>Total purchase price</td><td>$233,584</td></tr></table>
The pro forma revenue and earnings associated with the Blockbuster Acquisition are not included in this filing. Due to the material ongoing modifications of the business, management has determined that insufficient information exists to accurately develop meaningful historical pro forma financial information. Moreover, the historical operations of Blockbuster materially changed during the periods preceding the acquisition as a result of Blockbuster Inc. ’s bankruptcy proceedings, and any historical pro forma information would not prove useful in assessing our post acquisition earnings and cash flows. The cost of goods sold on a unit basis for Blockbuster in the current period was lower-than-historical costs. The carrying values in the current period of the rental library and merchandise inventories (“Blockbuster Inventory”) were reduced to their estimated fair value due to the application of purchase accounting. This impact on cost of goods sold on a unit basis will diminish in the future as we purchase new Blockbuster Inventory.10. Spectrum Investments TerreStar Transaction Gamma Acquisition L. L. C. (“Gamma”), a wholly-owned subsidiary of DISH Network, entered into the TerreStar Transaction on June 14, 2011. On July 7, 2011, the U. S. Bankruptcy Court for the Southern District of New York approved the asset purchase agreement with TerreStar and we subsequently paid $1.345 billion of the cash purchase price. DISH Network is a party to the asset purchase agreement solely with respect to certain guaranty obligations. We have paid all but $30 million of the purchase price for the TerreStar Transaction, which will be paid upon closing of the TerreStar Transaction, or upon certain other conditions being met under the asset purchase agreement. Consummation of the acquisition contemplated in the asset purchase agreement is subject to, among other things, approval by the FCC. On February 7, 2012, the Canadian federal Department of Industry (“Industry Canada”) approved the transfer of the Canadian spectrum licenses held by TerreStar to us. If the remaining required approvals are not obtained, subject to certain exceptions, we have the right to require and direct the sale of some or all of the TerreStar assets to a third party and we would be entitled to the proceeds from such a sale. These proceeds could, however, be substantially less than amounts we have paid in the TerreStar Transaction. Additionally, Gamma is responsible for providing certain working capital and certain administrative expenses of TerreStar and certain of its subsidiaries after December 31, 2011. We expect that the TerreStar Transaction will be accounted for as a business combination using purchase price accounting. We also expect to allocate the purchase price to the various components of the acquisition based upon the fair value of each component using various valuation techniques, including the market approach, income approach and/or cost approach. We expect the purchase price of the TerreStar assets to be allocated to, among other things, spectrum and satellites. DISH NETWORK CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued F-41 During December 2009, we paid a dividend in cash of $2.00 per share on our outstanding Class A and Class B common stock to shareholders of record on November 20, 2009. In light of such dividend, during February 2010, the exercise price of 20.6 million stock options, affecting approximately 700 employees, was reduced by $2.00 per share (the “2009 Stock Option Adjustment”). Except as noted below, all information discussed below reflects the 2009 Stock Option Adjustment. On January 1, 2008, we completed the distribution of our technology and set-top box business and certain infrastructure assets (the “Spin-off”) into a separate publicly-traded company, EchoStar Corporation (“EchoStar”). DISH Network and EchoStar operate as separate publicly-traded companies, and neither entity has any ownership interest in the other. However, a substantial majority of the voting power of the shares of both companies is owned beneficially by Charles W. Ergen, our Chairman, or by certain trusts established by Mr. Ergen for the benefit of his family. In connection with the Spin-off, as permitted by our existing stock incentive plans and consistent with the Spin-off exchange ratio, each DISH Network stock option was converted into two stock options as follows: x an adjusted DISH Network stock option for the same number of shares that were exercisable under the original DISH Network stock option, with an exercise price equal to the exercise price of the original DISH Network stock option multiplied by 0.831219. x a new EchoStar stock option for one-fifth of the number of shares that were exercisable under the original DISH Network stock option, with an exercise price equal to the exercise price of the original DISH Network stock option multiplied by 0.843907. Similarly, each holder of DISH Network restricted stock units retained his or her DISH Network restricted stock units and received one EchoStar restricted stock unit for every five DISH Network restricted stock units that they held. Consequently, the fair value of the DISH Network stock award and the new EchoStar stock award immediately following the Spin-off was equivalent to the fair value of such stock award immediately prior to the Spin-off. As of December 31, 2011, the following stock awards were outstanding:
<table><tr><td> </td><td colspan="4"> As of December 31, 2011</td></tr><tr><td> </td><td colspan="2"> DISH Network Awards</td><td colspan="2"> EchoStar Awards</td></tr><tr><td> Stock Awards Outstanding</td><td> Stock Options</td><td> Restricted Stock Units</td><td> Stock Options</td><td> Restricted Stock Units</td></tr><tr><td>Held by DISH Network employees</td><td>18,630,441</td><td>1,189,709</td><td>762,094</td><td>54,286</td></tr><tr><td>Held by EchoStar employees</td><td>2,705,718</td><td>94,999</td><td>N/A</td><td>N/A</td></tr><tr><td>Total</td><td>21,336,159</td><td>1,284,708</td><td>762,094</td><td>54,286</td></tr></table>
We are responsible for fulfilling all stock awards related to DISH Network common stock and EchoStar is responsible for fulfilling all stock awards related to EchoStar common stock, regardless of whether such stock awards are held by our or EchoStar’s employees. Notwithstanding the foregoing, our stock-based compensation expense, resulting from stock awards outstanding at the Spin-off date, is based on the stock awards held by our employees regardless of whether such stock awards were issued by DISH Network or EchoStar. Accordingly, stock-based compensation that we expense with respect to EchoStar stock awards is included in “Additional paid-in capital” on our Consolidated Balance Sheets. Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 62 62 Earnings before interest, taxes, depreciation and amortization. EBITDA was $2.956 billion during the year ended December 31, 2010, an increase of $644 million or 27.9% compared to the same period in 2009. The following table reconciles EBITDA to the accompanying financial statements.
<table><tr><td> </td><td colspan="2">For the Years Ended December 31,</td></tr><tr><td> </td><td>2010</td><td>2009</td></tr><tr><td> </td><td colspan="2">(In thousands)</td></tr><tr><td>EBITDA</td><td>$2,955,786</td><td>$2,311,398</td></tr><tr><td>Interest expense, net</td><td>-429,619</td><td>-358,391</td></tr><tr><td>Income tax (provision) benefit, net</td><td>-557,473</td><td>-377,429</td></tr><tr><td>Depreciation and amortization</td><td>-983,965</td><td>-940,033</td></tr><tr><td>Net income (loss) attributable to DISH Network</td><td>$984,729</td><td>$635,545</td></tr></table>
EBITDA is not a measure determined in accordance with GAAP, and should not be considered a substitute for operating income, net income or any other measure determined in accordance with GAAP. EBITDA is used as a measurement of operating efficiency and overall financial performance and we believe it to be a helpful measure for those evaluating companies in the pay-TV industry. Conceptually, EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures. EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Income tax (provision) benefit, net. Our income tax provision was $557 million during the year ended December 31, 2010, an increase of $180 million compared to the same period in 2009. The increase in the provision was primarily related to the increase in “Income (loss) before income taxes. ” Net income (loss) attributable to DISH Network. “Net income (loss) attributable to DISH Network” was $985 million during the year ended December 31, 2010, an increase of $349 million compared to $636 million for the same period in 2009. The increase was primarily attributable to the changes in revenue and expenses discussed above. LIQUIDITY AND CAPITAL RESOURCES Cash, Cash Equivalents and Current Marketable Investment Securities We consider all liquid investments purchased within 90 days of their maturity to be cash equivalents. See “Item 7A. – Quantitative and Qualitative Disclosures About Market Risk” for further discussion regarding our marketable investment securities. As of December 31, 2011, our cash, cash equivalents and current marketable investment securities totaled $2.041 billion compared to $2.940 billion as of December 31, 2010, a decrease of $899 million. This decrease in cash, cash equivalents and current marketable investment securities was primarily related to our investment in DBSD North America of $1.139 billion, the TerreStar Transaction of $1.345 billion, repurchases and redemptions of our 6 3/8% Senior Notes due 2011 totaling $1.0 billion, the $893 million dividend paid in cash on our Class A and Class B common stock, capital expenditures of $779 million, the Blockbuster Acquisition of $127 million, net of $107 million cash received, and the Sprint Settlement Agreement net payment of approximately $114 million, which were partially offset by cash generated from operations of $2.574 billion and the net proceeds of $1.973 billion related to the issuance of our 6 3/4% Senior Notes due 2021. We have investments in various debt and equity instruments including corporate bonds, corporate equity securities, government bonds and variable rate demand notes (“VRDNs”). VRDNs are long-term floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. Our VRDN portfolio is comprised of investments in many municipalities, which are backed by financial institutions or other highly rated companies that serve as the pledged liquidity source. While they are classified as marketable investment securities, the put option allows VRDNs to be liquidated generally on a same day or on a five business day settlement basis. As of December 31, 2011 and 2010, we held VRDNs, within our current marketable investment securities portfolio, with fair values of $161 million and $1.334 billion, respectively. Obligations and Future Capital Requirements Contractual Obligations and Off-Balance Sheet Arrangements As of December 31, 2015, future maturities of our long-term debt, capital lease and contractual obligations are summarized as follows:
<table><tr><td></td><td colspan="7">Payments due by period</td></tr><tr><td></td><td>Total</td><td>2016</td><td>2017</td><td>2018</td><td>2019</td><td>2020</td><td>Thereafter</td></tr><tr><td></td><td colspan="7">(In thousands)</td></tr><tr><td>Long-term debt obligations</td><td>$13,630,996</td><td>$1,503,151</td><td>$903,170</td><td>$1,203,235</td><td>$1,403,305</td><td>$1,103,379</td><td>$7,514,756</td></tr><tr><td>Capital lease obligations</td><td>166,492</td><td>30,849</td><td>32,994</td><td>36,175</td><td>19,503</td><td>19,137</td><td>27,834</td></tr><tr><td>Interest expense on long-term debt and capital lease obligations</td><td>4,206,125</td><td>772,289</td><td>716,328</td><td>646,445</td><td>618,716</td><td>479,170</td><td>973,177</td></tr><tr><td>Satellite-related obligations</td><td>1,960,083</td><td>411,734</td><td>336,526</td><td>327,197</td><td>301,102</td><td>241,371</td><td>342,153</td></tr><tr><td>Operating lease obligations</td><td>178,918</td><td>52,305</td><td>32,960</td><td>22,563</td><td>15,623</td><td>10,040</td><td>45,427</td></tr><tr><td>Purchase obligations</td><td>2,325,567</td><td>1,768,934</td><td>248,443</td><td>165,584</td><td>115,814</td><td>11,892</td><td>14,900</td></tr><tr><td>Total</td><td>$22,468,181</td><td>$4,539,262</td><td>$2,270,421</td><td>$2,401,199</td><td>$2,474,063</td><td>$1,864,989</td><td>$8,918,247</td></tr></table>
In certain circumstances the dates on which we are obligated to make these payments could be delayed. These amounts will increase to the extent that we procure launch and/or in-orbit insurance on our satellites or contract for the construction, launch or lease of additional satellites. The table above does not include $336 million of liabilities associated with unrecognized tax benefits that were accrued, as discussed in Note 11 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K, and are included on our Consolidated Balance Sheets as of December 31, 2015. We do not expect any portion of this amount to be paid or settled within the next twelve months. Other than the “Guarantees” disclosed in Note 15 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K, we generally do not engage in off-balance sheet financing activities. Satellite Insurance We generally do not carry commercial launch or in-orbit insurance on any of the satellites that we use, other than certain satellites leased from third parties. We generally do not use commercial insurance to mitigate the potential financial impact of launch or in-orbit failures because we believe that the cost of insurance premiums is uneconomical relative to the risk of such failures. In light of current favorable market conditions, during January 2016, we procured commercial launch and in-orbit insurance (for a period of one year following launch) for the EchoStar XVIII satellite, which is expected to launch during the second quarter 2016. We lease substantially all of our satellite capacity from third parties, including the vast majority of our transponder capacity from EchoStar, and we do not carry commercial insurance on any of the satellites that we lease from them. While we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup capacity to recover the transmission of certain critical programming, our backup capacity is limited. In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Purchase Obligations Our 2016 purchase obligations primarily consist of binding purchase orders for receiver systems and related equipment, broadband equipment, digital broadcast operations, transmission costs, engineering services, and other products and services related to the operation of our Pay-TV services and broadband service. Our purchase obligations also include certain fixed contractual commitments to purchase programming content. Our purchase obligations can fluctuate significantly from period to period due to, among other things, management’s timing of payments and inventory purchases, and can materially impact our future operating asset and liability balances, and our future working capital requirements. |
0 | What's the increasing rate of Goodwill in 2016? (in million) | ANALOG DEVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The total intrinsic value of options exercised (i. e. the difference between the market price at exercise and the price paid by the employee to exercise the options) during fiscal 2011, 2010 and 2009 was $96.5 million, $29.6 million and $4.7 million, respectively. The total amount of proceeds received by the Company from exercise of these options during fiscal 2011, 2010 and 2009 was $217.4 million, $240.4 million and $15.1 million, respectively. Proceeds from stock option exercises pursuant to employee stock plans in the Company’s statement of cash flows of $217.2 million, $216.1 million and $12.4 million for fiscal 2011, 2010 and 2009, respectively, are net of the value of shares surrendered by employees in certain limited circumstances to satisfy the exercise price of options, and to satisfy employee tax obligations upon vesting of restricted stock or restricted stock units and in connection with the exercise of stock options granted to the Company’s employees under the Company’s equity compensation plans. The withholding amount is based on the Company’s minimum statutory withholding requirement. A summary of the Company’s restricted stock unit award activity as of October 29, 2011 and changes during the year then ended is presented below:
<table><tr><td></td><td>Restricted Stock Units Outstanding</td><td>Weighted- Average Grant- Date Fair Value Per Share</td></tr><tr><td>Restricted stock units outstanding at October 30, 2010</td><td>1,265</td><td>$28.21</td></tr><tr><td>Units granted</td><td>898</td><td>$34.93</td></tr><tr><td>Restrictions lapsed</td><td>-33</td><td>$24.28</td></tr><tr><td>Units forfeited</td><td>-42</td><td>$31.39</td></tr><tr><td>Restricted stock units outstanding at October 29, 2011</td><td>2,088</td><td>$31.10</td></tr></table>
As of October 29, 2011, there was $88.6 million of total unrecognized compensation cost related to unvested share-based awards comprised of stock options and restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.3 years. The total grant-date fair value of shares that vested during fiscal 2011, 2010 and 2009 was approximately $49.6 million, $67.7 million and $74.4 million, respectively. Common Stock Repurchase Program The Company’s common stock repurchase program has been in place since August 2004. In the aggregate, the Board of Directors has authorized the Company to repurchase $5 billion of the Company’s common stock under the program. Under the program, the Company may repurchase outstanding shares of its common stock from time to time in the open market and through privately negotiated transactions. Unless terminated earlier by resolution of the Company’s Board of Directors, the repurchase program will expire when the Company has repurchased all shares authorized under the program. As of October 29, 2011, the Company had repurchased a total of approximately 125.0 million shares of its common stock for approximately $4,278.5 million under this program. An additional $721.5 million remains available for repurchase of shares under the current authorized program. The repurchased shares are held as authorized but unissued shares of common stock. Any future common stock repurchases will be dependent upon several factors, including the amount of cash available to the Company in the United States and the Company’s financial performance, outlook and liquidity. The Company also from time to time repurchases shares in settlement of employee tax withholding obligations due upon the vesting of restricted stock units, or in certain limited circumstances to satisfy the exercise price of options granted to the Company’s employees under the Company’s equity compensation plans. CITIZENS FINANCIAL GROUP, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS
<table><tr><td></td><td colspan="8">As of</td></tr><tr><td>(dollars in millions)</td><td>December 31,2016</td><td>September 30,2016</td><td>June 30,2016</td><td>March 31,2016</td><td>December 31,2015</td><td>September 30,2015</td><td>June 30,2015</td><td>March 31,2015</td></tr><tr><td>Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$149,520</td><td>$147,015</td><td>$145,183</td><td>$140,077</td><td>$138,208</td><td>$135,447</td><td>$137,251</td><td>$136,535</td></tr><tr><td>Loans and leases<sup>-18</sup></td><td>107,669</td><td>105,467</td><td>103,551</td><td>100,991</td><td>99,042</td><td>97,431</td><td>96,538</td><td>94,494</td></tr><tr><td>Allowance for loan and lease losses</td><td>1,236</td><td>1,240</td><td>1,246</td><td>1,224</td><td>1,216</td><td>1,201</td><td>1,201</td><td>1,202</td></tr><tr><td>Total securities</td><td>25,610</td><td>25,704</td><td>24,398</td><td>24,057</td><td>24,075</td><td>24,354</td><td>25,134</td><td>25,121</td></tr><tr><td>Goodwill</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td><td>6,876</td></tr><tr><td>Total liabilities</td><td>129,773</td><td>126,834</td><td>124,957</td><td>120,112</td><td>118,562</td><td>115,847</td><td>117,665</td><td>116,971</td></tr><tr><td>Deposits</td><td>109,804</td><td>108,327</td><td>106,257</td><td>102,606</td><td>102,539</td><td>101,866</td><td>100,615</td><td>98,990</td></tr><tr><td>Federal funds purchased and securities sold under agreements to repurchase</td><td>1,148</td><td>900</td><td>717</td><td>714</td><td>802</td><td>1,293</td><td>3,784</td><td>4,421</td></tr><tr><td>Other short-term borrowed funds</td><td>3,211</td><td>2,512</td><td>2,770</td><td>3,300</td><td>2,630</td><td>5,861</td><td>6,762</td><td>7,004</td></tr><tr><td>Long-term borrowed funds</td><td>12,790</td><td>11,902</td><td>11,810</td><td>10,035</td><td>9,886</td><td>4,153</td><td>3,890</td><td>3,904</td></tr><tr><td>Total stockholders’ equity</td><td>19,747</td><td>20,181</td><td>20,226</td><td>19,965</td><td>19,646</td><td>19,600</td><td>19,586</td><td>19,564</td></tr><tr><td>Other Balance Sheet Data:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Asset Quality Ratios:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Allowance for loan and lease losses as a percentage of total loans and leases</td><td>1.15%</td><td>1.18%</td><td>1.20%</td><td>1.21%</td><td>1.23%</td><td>1.23%</td><td>1.24%</td><td>1.27%</td></tr><tr><td>Allowance for loan and lease losses as a percentage of nonperforming loans and leases</td><td>118</td><td>112</td><td>119</td><td>113</td><td>115</td><td>116</td><td>114</td><td>106</td></tr><tr><td>Nonperforming loans and leases as a percentage of total loans and leases</td><td>0.97</td><td>1.05</td><td>1.01</td><td>1.07</td><td>1.07</td><td>1.06</td><td>1.09</td><td>1.20</td></tr><tr><td>Capital ratios:<sup>-19</sup></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>CET1 capital ratio<sup>-20</sup></td><td>11.2</td><td>11.3</td><td>11.5</td><td>11.6</td><td>11.7</td><td>11.8</td><td>11.8</td><td>12.2</td></tr><tr><td>Tier 1 capital ratio<sup>-21</sup></td><td>11.4</td><td>11.5</td><td>11.7</td><td>11.9</td><td>12.0</td><td>12.0</td><td>12.1</td><td>12.2</td></tr><tr><td>Total capital ratio<sup>-22</sup></td><td>14.0</td><td>14.2</td><td>14.9</td><td>15.1</td><td>15.3</td><td>15.4</td><td>15.3</td><td>15.5</td></tr><tr><td>Tier 1 leverage ratio<sup>-23</sup></td><td>9.9</td><td>10.1</td><td>10.3</td><td>10.4</td><td>10.5</td><td>10.4</td><td>10.4</td><td>10.5</td></tr></table>
(1) Third quarter 2016 noninterest income included $67 million of pre-tax notable items consisting of a $72 million gain on mortgage/home equity TDR transaction, partially offset by $5 million related to asset finance repositioning. (2) Third quarter 2016 noninterest expense included $36 million of pre-tax notable items consisting of $17 million of TOP III efficiency initiatives, $11 million related to asset finance repositioning and $8 million of home equity operational items. (3) Third quarter 2016 net income included $19 million of after-tax notable items consisting of a $45 million gain on mortgage/home equity TDR transaction, partially offset by $11 million of TOP III efficiency initiatives, $10 million related to asset finance repositioning and $5 million of home equity operational items. (4) Third quarter 2016 net income per average common share, basic and diluted, included $0.04 related to notable items consisting of $0.09 attributable to the gain on mortgage/home equity TDR transaction, partially offset by a $0.02 impact from TOP III efficiency initiatives, $0.02 impact related to asset finance repositioning and a $0.01 impact from home equity operational items. (5) Second quarter 2015 noninterest expense included $40 million of pre-tax restructuring charges and special items consisting of $25 million of restructuring charges, $1 million of CCAR and regulatory expenses and $14 million related to separation and rebranding. (6) Second quarter 2015 net income included $25 million of after-tax restructuring charges and special items consisting of $15 million of restructuring charges, $1 million of CCAR and regulatory expenses and $9 million related to separation and rebranding. (7) Second quarter 2015 net income per average common share, basic and diluted, included $0.05 attributed to restructuring and special items. (8) First quarter 2015 noninterest expense included $10 million of pre-tax restructuring charges and special items consisting of $1 million of restructuring charges, $1 million of CCAR and regulatory expenses and $8 million related to separation and rebranding. (9) First quarter 2015 net income included $6 million of after-tax restructuring charges and special items consisting of $1 million of restructuring charges and $5 million related to separation and rebranding. (10) First quarter 2015 net income per average common share, basic and diluted, included $0.01 attributed to restructuring and special items. (11) “Return on average common equity” is defined as net income available to common stockholders divided by average common equity. Average common equity represents average total stockholders’ equity less average preferred stock. (12) “Return on average tangible common equity” is defined as net income (loss) available to common stockholders divided by average common equity excluding average goodwill (net of related deferred tax liability) and average other intangibles. Average common equity represents average total stockholders’ equity less average preferred stock. (13) “Return on average total assets” is defined as net income (loss) divided by average total assets. (14) “Return on average total tangible assets” is defined as net income (loss) divided by average total assets excluding average goodwill (net of related deferred tax liability) and average other intangibles. (15) “Efficiency ratio is defined as the ratio of our total noninterest expense to the sum of net interest income and total noninterest income. (16) “Net interest margin” is defined as net interest income divided by average total interest-earning assets. (17) Ratios for the periods above are presented on an annualized basis. (18) Excludes loans held for sale of $625 million, $526 million, $850 million, $751 million, $365 million, $420 million, $697 million, and $376 million as of December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. (19) Basel III transitional rules for institutions applying the Standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III Standardized transitional approach. (20) “Common equity tier 1 capital ratio” represents CET1 capital divided by total risk-weighted assets as defined under Basel III Standardized approach. (21) “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under Basel III Standardized approach. (22) “Total capital ratio” is total capital divided by total risk-weighted assets as defined under Basel III Standardized approach. (23) “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under Basel III Standardized approach. In Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, “we,” “us” and “our” refer to Freeport-McMoRan Copper & Gold Inc. (FCX) and its consolidated subsidiaries. The results of operations reported and summarized below are not necessarily indicative of future operating results (refer to “Cautionary Statement” for further discussion). In particular, the financial results for the year ended 2013 include the results of FCX Oil & Gas Inc. (FM O&G) only since June 1, 2013. References to “Notes” are Notes included in our Notes to Consolidated Financial Statements. Throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, all references to earnings or losses per share are on a diluted basis, unless otherwise noted. OVERVIEW In 2013, we completed the acquisitions of Plains Exploration & Production Company (PXP) and McMoRan Exploration Co. (MMR). Refer to Note 2 for further discussion of these acquisitions, including a summary of the preliminary purchase price allocations. With these acquisitions, we are a premier United States-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and natural gas resources, and a growing production profile. We are the world’s largest publicly traded copper producer. Our portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits, significant mining operations in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa and significant oil and natural gas assets in North America, including reserves in the Deepwater Gulf of Mexico (GOM), onshore and offshore California, in the Eagle Ford shale play in Texas, in the Haynesville shale play in Louisiana, in the Madden area in central Wyoming, and an industry-leading position in the emerging shallow-water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana (previously referred to as the ultra-deep gas trend). We have significant mineral reserves, resources and future development opportunities within our portfolio of mining assets. At December 31, 2013, our estimated consolidated recoverable proven and probable mineral reserves totaled 111.2 billion pounds of copper, 31.3 million ounces of gold and 3.26 billion pounds of molybdenum, which were determined using long-term average prices of $2.00 per pound for copper, $1,000 per ounce for gold and $10 per pound for molybdenum. Refer to “Critical Accounting Estimates — Mineral Reserves” for further discussion. A summary of the sources of our consolidated copper, gold and molybdenum production for the year 2013 by geographic location follows:
<table><tr><td></td><td>Copper</td><td>Gold</td><td>Molybdenum</td><td></td></tr><tr><td>North America</td><td>35%</td><td>1%</td><td>86%</td><td><sup>a</sup></td></tr><tr><td>South America</td><td>32%</td><td>8%</td><td>14%</td><td></td></tr><tr><td>Indonesia</td><td>22%</td><td>91%</td><td>—</td><td></td></tr><tr><td>Africa</td><td>11%</td><td>—</td><td>—</td><td></td></tr><tr><td></td><td>100%</td><td>100%</td><td>100%</td><td></td></tr></table>
a. For 2013, 60 percent of our consolidated molybdenum production in North America was from the Henderson and Climax primary molybdenum mines. Copper production from the Grasberg, Morenci and Cerro Verde mines totaled 49 percent of our consolidated copper production in 2013. During 2013, we completed our second phase expansion project at Tenke. We also advanced construction on the Morenci mill expansion, with startup expected in the first half of 2014, and commenced construction on the Cerro Verde mill expansion, with completion expected in 2016. These projects are expected to significantly increase our minerals production in future periods. Refer to “Operations” for further discussion of our mining operations. Our oil and gas business has significant proved, probable and possible reserves with financially attractive organic growth opportunities. Our estimated proved oil and natural gas reserves at December 31, 2013, totaled 464 million barrels of oil equivalents (MMBOE), with 80 percent comprised of oil (including natural gas liquids, or NGLs). Our portfolio includes a broad range of development opportunities and high-potential exploration prospects. For the seven-month period following the acquisition date, our oil and gas sales volumes totaled 38.1 MMBOE, including 26.6 million barrels (MMBbls) of crude oil, 54.2 billion cubic feet (Bcf) of natural gas and 2.4 MMBbls of NGLs. Refer to “Operations” for further discussion of our oil and gas operations and to “Critical Accounting Estimates — Oil and Natural Gas Reserves” for further discussion of our reserves. Our results for 2013, compared with 2012, primarily benefited from higher copper and gold sales volumes, partly offset by lower metals price realizations, and include the results of FM O&G beginning June 1, 2013. Refer to “Consolidated Results” for discussion of items impacting our consolidated results for the three years ended December 31, 2013. At December 31, 2013, we had $2.0 billion in consolidated cash and cash equivalents and $20.7 billion in total debt, including $10.5 billion of acquisition-related debt and $6.7 billion of debt assumed in connection with the oil and gas acquisitions. Refer to Note 8 and “Capital Resources and Liquidity” for further discussion. At current copper and crude oil prices, we expect to produce significant operating cash flows, and to use our cash to invest in our development projects, reduce debt and return cash to shareholders through dividends on our common stock. |
2,567.6 | What's the average of the Attritional for Current Year in the years where International is positive? (in million) | Development of prior year incurred losses was $135.6 million unfavorable in 2006, $26.4 million favorable in 2005 and $249.4 million unfavorable in 2004. Such losses were the result of the reserve development noted above, as well as inherent uncertainty in establishing loss and LAE reserves. Reserves for Asbestos and Environmental Losses and Loss Adjustment Expenses As of year end 2006, 7.4% of reserves reflect an estimate for the Company’s ultimate liability for A&E claims for which ultimate value cannot be estimated using traditional reserving techniques. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims. See ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asbestos and Environmental Exposures” and Note 3 of Notes to Consolidated Financial Statements. Mt. McKinley’s book of direct A&E exposed insurance is relatively small and homogenous. It also arises from a limited period, effective 1978 to 1984. The book is based principally on excess liability policies, thereby limiting exposure analysis to a limited number of policies and forms. As a result of this focused structure, the Company believes that it is able to comprehensively analyze its exposures, allowing it to identify, analyze and actively monitor those claims which have unusual exposure, including policies in which it may be exposed to pay expenses in addition to policy limits or non-products asbestos claims. The Company endeavors to be actively engaged with every insured account posing significant potential asbestos exposure to Mt. McKinley. Such engagement can take the form of pursuing a final settlement, negotiation, litigation, or the monitoring of claim activity under Settlement in Place (“SIP”) agreements. SIP agreements generally condition an insurer’s payment upon the actual claim experience of the insured and may have annual payment caps or other measures to control the insurer’s payments. The Company’s Mt. McKinley operation is currently managing eight SIP agreements, three of which were executed prior to the acquisition of Mt. McKinley in 2000. The Company’s preference with respect to coverage settlements is to execute settlements that call for a fixed schedule of payments, because such settlements eliminate future uncertainty. The Company has significantly enhanced its classification of insureds by exposure characteristics over time, as well as its analysis by insured for those it considers to be more exposed or active. Those insureds identified as relatively less exposed or active are subject to less rigorous, but still active management, with an emphasis on monitoring those characteristics, which may indicate an increasing exposure or levels of activity. The Company continually focuses on further enhancement of the detailed estimation processes used to evaluate potential exposure of policyholders, including those that may not have reported significant A&E losses. Everest Re’s book of assumed reinsurance is relatively concentrated within a modest number of A&E exposed relationships. It also arises from a limited period, effectively 1977 to 1984. Because the book of business is relatively concentrated and the Company has been managing the A&E exposures for many years, its claim staff is familiar with the ceding companies that have generated most of these liabilities in the past and which are therefore most likely to generate future liabilities. The Company’s claim staff has developed familiarity both with the nature of the business written by its ceding companies and the claims handling and reserving practices of those companies. This level of familiarity enhances the quality of the Company’s analysis of its exposure through those companies. As a result, the Company believes that it can identify those claims on which it has unusual exposure, such as non-products asbestos claims, for concentrated attention. However, in setting reserves for its reinsurance liabilities, the Company relies on claims data supplied, both formally and informally by its ceding companies and brokers. This furnished information is not always timely or accurate and can impact the accuracy and timeliness of the Company’s ultimate loss projections. The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the years ended December 31:
<table><tr><td>(Dollars in millions)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Case reserves reported by ceding companies</td><td>$135.6</td><td>$125.2</td><td>$148.5</td></tr><tr><td>Additional case reserves established by the Company (assumed reinsurance) (1)</td><td>152.1</td><td>157.6</td><td>151.3</td></tr><tr><td>Case reserves established by the Company (direct insurance)</td><td>213.7</td><td>243.5</td><td>272.1</td></tr><tr><td>Incurred but not reported reserves</td><td>148.7</td><td>123.3</td><td>156.4</td></tr><tr><td>Gross reserves</td><td>650.1</td><td>649.6</td><td>728.3</td></tr><tr><td>Reinsurance receivable</td><td>-138.7</td><td>-199.1</td><td>-221.6</td></tr><tr><td>Net reserves</td><td>$511.4</td><td>$450.5</td><td>$506.7</td></tr></table>
(1) Additional reserves are case specific reserves determined by the Company to be needed over and above those reported by the ceding company Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated.
<table><tr><td></td><td colspan="9">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>Current Year</td><td colspan="2">Ratio %/ Pt Change</td><td>Prior Years</td><td colspan="2">Ratio %/ Pt Change</td><td>Total Incurred</td><td colspan="2">Ratio %/ Pt Change</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$899.9</td><td>69.7%</td><td></td><td>$173.6</td><td>13.4%</td><td></td><td>$1,073.5</td><td>83.1%</td><td></td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8%</td><td></td><td>-0.2</td><td>0.0%</td><td></td><td>49.2</td><td>3.8%</td><td></td></tr><tr><td>Total segment</td><td>$949.3</td><td>73.5%</td><td></td><td>$173.4</td><td>13.4%</td><td></td><td>$1,122.7</td><td>86.9%</td><td></td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.1</td><td>12.0%</td><td></td><td>$1,033.2</td><td>81.6%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.2</td><td>12.0%</td><td></td><td>$1,033.3</td><td>81.6%</td><td></td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$786.5</td><td>76.4%</td><td></td><td>$24.9</td><td>2.4%</td><td></td><td>$811.3</td><td>78.8%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$786.5</td><td>76.4%</td><td></td><td>$25.0</td><td>2.4%</td><td></td><td>$811.4</td><td>78.8%</td><td></td></tr><tr><td>Variance 2016/2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$18.7</td><td>0.1</td><td>pts</td><td>$21.5</td><td>1.4</td><td>pts</td><td>$40.3</td><td>1.5</td><td>pts</td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8</td><td>pts</td><td>-0.3</td><td>-</td><td>pts</td><td>$49.1</td><td>3.8</td><td>pts</td></tr><tr><td>Total segment</td><td>$68.1</td><td>3.9</td><td>pts</td><td>$21.2</td><td>1.4</td><td>pts</td><td>$89.4</td><td>5.3</td><td>pts</td></tr><tr><td>Variance 2015/2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td>Catastrophes</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td></tr><tr><td>Total segment</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Incurred losses and LAE increased by 8.7% to $1,122.7 million in 2016 compared to $1,033.3 million in 2015 mainly due to an increase of $49.4 million in current year catastrophe losses, an increase of $21.5 million in prior years’ attritional losses mainly related to run-off construction liability and umbrella program business and an increase of $18.7 million in current year attritional losses primarily related to the impact of the increase in premiums earned. The $49.4 million of current year catastrophe losses in 2016 were due to the 2016 U. S. storms ($30.0 million), Hurricane Matthew ($11.0 million) and the Fort McMurray Canada wildfire ($8.4 million). There were no current year catastrophe losses in 2015. Incurred losses and LAE increased by 27.3% to $1,033.3 million in 2015 compared to $811.4 million in 2014, mainly due to an increase of $127.2 million in prior years’ attritional losses related to run-off umbrella program and construction liability business and an increase of $94.7 million in current year attritional losses related primarily to the impact of the increase in premiums earned. There were no current year catastrophe losses in 2015 and 2014. Segment Expenses. Commission and brokerage increased by 16.5% to $205.3 million in 2016 compared to $176.2 million in 2015. The increase was mainly due to the impact of the increase in premiums earned and changes in the mix of business. Segment other underwriting expenses increased to $176.8 million in 2016 compared to $136.7 million in 2015. The increase was primarily due to increased expenses due to the build out of our insurance platform. Commission and brokerage increased by 17.7% to $176.2 million in 2015 compared to $149.8 million in 2014. The increase was primarily driven by the impact of the increase in premiums earned and the change in the mix of business. Segment other underwriting expenses increased to $136.7 million in 2015 compared to $118.0 million in 2014. The increase was primarily due to the impact of the increase in premiums earned and increased focus on insurance operations resulting in increased operating expenses, including new hires. properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure. Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves and such variation could have a material adverse effect on our financial condition, results of operations and/or cash flows. See also ITEM 8, “Financial Statements and Supplementary Data” - Notes 1 and 3 of Notes to the Consolidated Financial Statements. Reinsurance Receivables. We have purchased reinsurance to reduce our exposure to adverse claim experience, large claims and catastrophic loss occurrences. Our ceded reinsurance provides for recovery from reinsurers of a portion of losses and loss expenses under certain circumstances. Such reinsurance does not relieve us of our obligation to our policyholders. In the event our reinsurers are unable to meet their obligations under these agreements or are able to successfully challenge losses ceded by us under the contracts, we will not be able to realize the full value of the reinsurance receivable balance. To minimize exposure from uncollectible reinsurance receivables, we have a reinsurance security committee that evaluates the financial strength of each reinsurer prior to our entering into a reinsurance arrangement. In some cases, we may hold full or partial collateral for the receivable, including letters of credit, trust assets and cash. Additionally, creditworthy foreign reinsurers of business written in the U. S. , as well as capital markets’ reinsurance mechanisms, are generally required to secure their obligations. We have established reserves for uncollectible balances based on our assessment of the collectability of the outstanding balances. As of December 31, 2016 and 2015, the reserve for uncollectible balances was $15.0 million. Actual uncollectible amounts may vary, perhaps substantially, from such reserves, impacting income (loss) in the period in which the change in reserves is made. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 11 of Notes to the Consolidated Financial Statements and “Financial Condition – Reinsurance Receivables” below. Premiums Written and Earned. Premiums written by us are earned ratably over the coverage periods of the related insurance and reinsurance contracts. We establish unearned premium reserves to cover the unexpired portion of each contract. Such reserves, for assumed reinsurance, are computed using pro rata methods based on statistical data received from ceding companies. Premiums earned, and the related costs, which have not yet been reported to us, are estimated and accrued. Because of the inherent lag in the reporting of written and earned premiums by our ceding companies, we use standard accepted actuarial methodologies to estimate earned but not reported premium at each financial reporting date. These earned but not reported premiums are combined with reported earned premiums to comprise our total premiums earned for determination of our incurred losses and loss and LAE reserves. Commission expense and incurred losses related to the change in earned but not reported premium are included in current period company and segment financial results. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements. The following table displays the estimated components of net earned but not reported premiums by segment for the periods indicated.
<table><tr><td></td><td colspan="3">At December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>U.S. Reinsurance</td><td>$385.5</td><td>$372.5</td><td>$388.3</td></tr><tr><td>International</td><td>235.4</td><td>243.9</td><td>239.8</td></tr><tr><td>Bermuda</td><td>258.4</td><td>253.4</td><td>208.4</td></tr><tr><td>Total</td><td>$879.3</td><td>$869.8</td><td>$836.5</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table> |
0.27857 | What is the growing rate of Earnings (loss) before taxes in Total in the years with the least Federal/foreign in Total? | Company determined that its usage pattern for certain assets had changed significantly and revised the useful lives of certain equipment starting in 2009. This adjustment was considered to be a change in an accounting estimate. The impact to the Company in 2010 and 2009 were as follows (unaudited):
<table><tr><td></td><td colspan="5"> 2010</td></tr><tr><td>(millions of dollars)</td><td> Q1</td><td> Q2</td><td> Q3</td><td> Q4</td><td> Full Year</td></tr><tr><td>Operating income increase</td><td>$4.8</td><td>$4.7</td><td>$4.6</td><td>$4.7</td><td>$18.8</td></tr><tr><td>Net earnings increase attributable to BorgWarner Inc.</td><td>3.7</td><td>3.6</td><td>3.6</td><td>3.6</td><td>14.5</td></tr><tr><td>Earnings per share increase — Basic</td><td>$0.03</td><td>$0.03</td><td>$0.03</td><td>$0.03</td><td>$0.13</td></tr><tr><td>Earnings per share increase — Diluted</td><td>$0.03</td><td>$0.03</td><td>$0.03</td><td>$0.03</td><td>$0.11</td></tr></table>
Revenue Recognition The Company recognizes revenue when title and risk of loss pass to the customer, which is usually upon shipment of product. Although the Company may enter into long-term supply agreements with its major customers, each shipment of goods is treated as a separate sale and the prices are not fixed over the life of the agreements. Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company periodically reviews the carrying value of its long-lived assets, whether held for use or disposal, including other intangible assets, when events and circumstances warrant such a review. Such events and circumstances include, but are not limited to, a significant decrease in market volumes, or project life, or a loss of a major customer application (i. e. , a “triggering event”). The Company’s impairment review is performed at each manufacturing, assembly, and technical site using data that is the basis for the Company’s annual budget (or forecast on an interim basis) and long-range plan (“LRP”). The annual budget and LRP include a five year projection of future cash flows based on actual new products and customer commitments. If a triggering event has occurred, the assets are identified by the operating location and management as potentially impaired and a recoverability review is performed by management. The review will determine if a current or future alternative use exists for additional customer applications or if redeployment of the assets to any of the Company’s other operating sites around the world is justified. The recoverability test compares projected undiscounted future cash flows to the carrying value of a product line or a specific customer application or asset grouping, as applicable. If the undiscounted cash flow test for recoverability identifies a possible impairment, management will perform a fair value analysis. Management determines fair value under ASC Topic 820 using the appropriate valuation technique of market, income or cost approach. Management believes that the estimates and assumptions are reasonable however, changes in assumptions with respect to future volumes, program project life or future asset use, in addition to future cash flows underlying these estimates could affect the Company’s fair value evaluations. Due to the sudden decline in the global automotive markets in 2008 and 2009, the Company reviewed the carrying value of its long-lived assets. As a result of these reviews, the Company recognized $36.3 million and $72.9 million in impairment of long-lived assets (i. e. , plant and equipment) as part of restructuring NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) NOTE 4 INCOME TAXES Earnings before income taxes and the provision for income taxes are presented in the following table.
<table><tr><td>(millions of dollars)</td><td colspan="3">2010</td><td colspan="3">2009</td><td colspan="3">2008</td></tr><tr><td>Year Ended December 31,</td><td>U.S.</td><td>Non-U.S.</td><td>Total</td><td>U.S.</td><td>Non-U.S.</td><td>Total</td><td>U.S.</td><td>Non-U.S.</td><td>Total</td></tr><tr><td>Earnings (loss) before taxes</td><td>$-26.7</td><td>$504.6</td><td>$477.9</td><td>$-138.5</td><td>$156.4</td><td>$17.9</td><td>$-123.8</td><td>$137.8</td><td>$14.0</td></tr><tr><td>Provision for income taxes:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Current:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Federal/foreign</td><td>14.0</td><td>117.7</td><td>131.7</td><td>-2.7</td><td>42.7</td><td>40.0</td><td>7.7</td><td>99.5</td><td>107.2</td></tr><tr><td>State</td><td>2.2</td><td>—</td><td>2.2</td><td>1.5</td><td>—</td><td>1.5</td><td>1.0</td><td>—</td><td>1.0</td></tr><tr><td>Total current</td><td>16.2</td><td>117.7</td><td>133.9</td><td>-1.2</td><td>42.7</td><td>41.5</td><td>8.7</td><td>99.5</td><td>108.2</td></tr><tr><td>Deferred</td><td>-48.9</td><td>-3.3</td><td>-52.2</td><td>-51.6</td><td>-8.4</td><td>-60.0</td><td>-44.7</td><td>-30.2</td><td>-74.9</td></tr><tr><td>Total provision for income taxes</td><td>$-32.7</td><td>$114.4</td><td>$81.7</td><td>$-52.8</td><td>$34.3</td><td>$-18.5</td><td>$-36.0</td><td>$69.3</td><td>$33.3</td></tr><tr><td>Effective tax rate</td><td>-122.5%</td><td>22.7%</td><td>17.1%</td><td>-38.1%</td><td>21.9%</td><td>-103.4%</td><td>-29.1%</td><td>50.3%</td><td>237.9%</td></tr></table>
The provision for income taxes resulted in an effective tax rate for 2010 of 17.1% compared with rates of (103.4)% in 2009 and 237.9% in 2008. In the first quarter of 2010, the Patient Protection and Affordable Care Act (PPACA) was signed into law. In addition, the Health Care and Education Reconciliation Act of 2010 (“the Reconciliation Act”) was also passed, amending certain portions of the PPACA. The PPACA contains a provision eliminating tax deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors who provide retiree prescription drug benefits equivalent to Medicare Part D coverage. However, based upon the changes made in the Reconciliation Act, the tax benefit related to the Medicare Part D subsidies will be extended until December 31, 2012. For all tax years ending after December 31, 2012 there will no longer be a tax benefit for the Medicare Part D subsidies. Therefore, the impact to the Company for the loss of this future tax benefit (after December 31, 2012) was an additional tax expense of approximately $2.9 million in 2010. The provision for income taxes for the year ended December 31, 2010 included a favorable impact of $21.2 million from the reversal of the Company’s valuation allowance on U. S. based foreign tax credit carryforwards. The improving financial performance of the Company’s U. S. operations has resulted in greater certainty that the Company will be able to fully utilize existing foreign tax credit carryforwards. The Company’s annual effective tax rate for 2010 is 17.1% which includes the impact of the reversal of the Company’s valuation allowance on U. S. based foreign tax credit carryforwards, the change in tax legislation related to Medicare Part D subsidies, the additional tax expense associated with the BERU-Eichenauer equity investment gain and the tax benefit associated with the Company’s environmental litigation settlement. This rate differs from the U. S. statutory rate primarily due to foreign rates, which differ from those in the U. S. , the realization of certain business tax credits including foreign tax credits and favorable permanent differences between book and tax treatment for items, including equity in affiliates’ earnings. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) the Company’s December 31, 2010 Consolidated Balance Sheet. See Note 1 in the Consolidated Financial Statements for more information regarding the Company’s first quarter 2010 adoption of ASC Topic 860. (b) In 2006, the Company entered into several interest rate swaps that had the effect of converting $325.0 million of fixed rate notes to variable rates. In the first quarter of 2009, $100 million in interest rate swaps related to the Company’s 2009 fixed rate debt matured, and the Company terminated $150 million in interest rate swap agreements related to the Company’s 2016 fixed rate debt and $75 million of interest rate swap agreements related to the Company’s 2019 fixed rate debt. As a result of the first quarter 2009 swap terminations, a $34.5 million gain remained in debt and is being amortized over the remaining lives of the respective 2016 and 2019 debt. As of December 31, 2010 and 2009, the unamortized portion was $27.8 million and $31.4 million, respectively. Annual principal payments required as of December 31, 2010 are as follows (in millions of dollars)
<table><tr><td>2011</td><td>$128.5</td></tr><tr><td>2012</td><td>384.1</td></tr><tr><td>2013</td><td>5.0</td></tr><tr><td>2014</td><td>0.2</td></tr><tr><td>2015</td><td>10.0</td></tr><tr><td>After 2015</td><td>682.4</td></tr><tr><td>Total Payments</td><td>$1,210.2</td></tr><tr><td>Less: Convertible Note Accretion</td><td>-25.3</td></tr><tr><td>Less: Unamortized Discounts</td><td>-4.5</td></tr><tr><td>Total</td><td>$1,180.4</td></tr></table>
The Company’s long-term debt includes various financial covenants, none of which are expected to restrict future operations. On March 31, 2010, the Company replaced its $250 million multi-currency revolving credit facility with a new $550 million multi-currency revolving credit facility, which includes a feature that allows the Company to increase its borrowings to $600 million. The new facility provides for borrowings through March 31, 2013, and is guaranteed by the Company’s domestic subsidiaries. The Company has three key financial covenants as part of the credit agreement. These covenants are a net worth test, a debt compared to EBITDA (“Earnings Before Interest, Taxes, Depreciation and Amortization”) test, and an interest coverage test. The Company was in compliance with all covenants at December 31, 2010 and expects to remain compliant in future periods. At December 31, 2010 and December 31, 2009 there were no outstanding borrowings under these facilities. On September 16, 2010, the Company issued $250 million in 4.625% senior notes due 2020. Interest is payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2011. The senior notes were issued under the Company’s $750 million universal shelf registration filed with the Securities and Exchange Commission, leaving approximately $126 million available as of December 31, 2010. On April 9, 2009, the Company issued $373.8 million in convertible senior notes due April 15, 2012. Under ASC Topic 470, “Accounting for Convertible Debt Instruments That May be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”, the Company must account for the convertible senior notes by bifurcating the instruments between their liability and equity components. The value of the debt component is based on the fair value of issuing a similar nonconvertible debt security. The equity component of the convertible debt security is calculated by deducting the value of the liability from the proceeds received at issuance. The Company’s December 31, 2010 Consolidated Balance Sheet includes debt of $348.5 million and capital in excess of par of $36.5 million. Additionally, ASC Topic 470 requires the Company to accrete the addition, we are exposed to gains and losses resulting from fluctuations in foreign currency exchange rates on transactions generated by our international subsidiaries in currencies other than their local currencies. These gains and losses are primarily driven by inter-company transactions. These exposures are included in other income (expense), net on the consolidated statements of income. Since 2007, we have used foreign currency forward contracts to reduce the risk from exchange rate fluctuations on inter-company transactions and projected inventory purchases for our Canadian subsidiary. Beginning in December 2008, we began using foreign currency forward contracts in order to reduce the risk associated with foreign currency exchange rate fluctuations on inter-company transactions for our European subsidiary. We do not enter into derivative financial instruments for speculative or trading purposes. Based on the foreign currency forward contracts outstanding as of December 31, 2009, we receive US Dollars in exchange for Canadian Dollars at a weighted average contractual forward foreign currency exchange rate of 1.04 CAD per $1.00 and US Dollars in exchange for Euros at a weighted average contractual foreign currency exchange rate of 0.70 EUR per $1.00. As of December 31, 2009, the notional value of our outstanding foreign currency forward contracts for our Canadian subsidiary was $15.4 million with contract maturities of 1 month, and the notional value of our outstanding foreign currency forward contracts for our European subsidiary was $56.0 million with contract maturities of 1 month. The foreign currency forward contracts are not designated as cash flow hedges, and accordingly, changes in their fair value are recorded in other income (expense), net on the consolidated statements of income. The fair value of our foreign currency forward contracts was $0.3 million and $1.2 million as of December 31, 2009 and 2008, respectively. These amounts are included in prepaid expenses and other current assets on the consolidated balance sheet. Refer to Note 9 for a discussion of the fair value measurements. Other income (expense), net included the following amounts related to changes in foreign currency exchange rates and derivative foreign currency forward contracts: |
-0.55825 | What is the growing rate of Active and other in the years with the least Company stock/ESOP? | Note 21. Expenses During the fourth quarter of 2008, we elected to provide support to certain investment accounts managed by SSgA through the purchase of asset- and mortgage-backed securities and a cash infusion, which resulted in a charge of $450 million. SSgA manages certain investment accounts, offered to retirement plans, that allow participants to purchase and redeem units at a constant net asset value regardless of volatility in the underlying value of the assets held by the account. The accounts enter into contractual arrangements with independent third-party financial institutions that agree to make up any shortfall in the account if all the units are redeemed at the constant net asset value. The financial institutions have the right, under certain circumstances, to terminate this guarantee with respect to future investments in the account. During 2008, the liquidity and pricing issues in the fixed-income markets adversely affected the market value of the securities in these accounts to the point that the third-party guarantors considered terminating their financial guarantees with the accounts. Although we were not statutorily or contractually obligated to do so, we elected to purchase approximately $2.49 billion of asset- and mortgage-backed securities from these accounts that had been identified as presenting increased risk in the current market environment and to contribute an aggregate of $450 million to the accounts to improve the ratio of the market value of the accounts’ portfolio holdings to the book value of the accounts. We have no ongoing commitment or intent to provide support to these accounts. The securities are carried in investment securities available for sale in our consolidated statement of condition. The components of other expenses were as follows for the years ended December 31:
<table><tr><td>(In millions)</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td>Customer indemnification obligation</td><td>$200</td><td></td><td></td></tr><tr><td>Securities processing</td><td>187</td><td>$79</td><td>$37</td></tr><tr><td>Other</td><td>505</td><td>399</td><td>281</td></tr><tr><td>Total other expenses</td><td>$892</td><td>$478</td><td>$318</td></tr></table>
In September and October 2008, Lehman Brothers Holdings Inc. , or Lehman Brothers, and certain of its affiliates filed for bankruptcy or other insolvency proceedings. While we had no unsecured financial exposure to Lehman Brothers or its affiliates, we indemnified certain customers in connection with these and other collateralized repurchase agreements with Lehman Brothers entities. In the then current market environment, the market value of the underlying collateral had declined. During the third quarter of 2008, to the extent these declines resulted in collateral value falling below the indemnification obligation, we recorded a reserve to provide for our estimated net exposure. The reserve, which totaled $200 million, was based on the cost of satisfying the indemnification obligation net of the fair value of the collateral, which we purchased during the fourth quarter of 2008. The collateral, composed of commercial real estate loans which are discussed in note 5, is recorded in loans and leases in our consolidated statement of condition. Management Fees We provide a broad range of investment management strategies, specialized investment management advisory services and other financial services for corporations, public funds, and other sophisticated investors. These services are offered through SSgA. Based upon assets under management, SSgA is the largest manager of institutional assets worldwide, the largest manager of assets for tax-exempt organizations (primarily pension plans) in the United States, and the third largest investment manager overall in the world. SSgA offers a broad array of investment management strategies, including passive and active, such as enhanced indexing and hedge fund strategies, using quantitative and fundamental methods for both U. S. and global equities and fixed income securities. SSgA also offers exchange traded funds, or ETFs, such as the SPDR? Dividend ETFs. The 10% decrease in management fees from 2007 primarily resulted from declines in average month-end equity market valuations and lower performance fees. Average month-end equity market valuations, individually presented in the above “INDEX” table, were down an average of 18% compared to 2007. The decrease in performance fees from $72 million in 2007 to $21 million in 2008 was generally the result of reduced levels of assets under management subject to performance fees, and somewhat lower relative performance measured against specified benchmarks during 2008. Management fees generated from customers outside the United States were approximately 40% of total management fees for 2008, down slightly from 41% for 2007. At year-end 2008, assets under management were $1.44 trillion, compared to $1.98 trillion at year-end 2007. While certain management fees are directly determined by the value of assets under management and the investment strategy employed, management fees reflect other factors as well, including our relationship pricing for customers who use multiple services, and the benchmarks specified in the respective management agreements related to performance fees. Accordingly, no direct correlation necessarily exists between the value of assets under management, market indices and management fee revenue. The overall decrease in assets under management at December 31, 2008 compared to December 31, 2007 resulted from declines in market valuations and from a net loss of business, with declines in market valuations representing the substantial majority of the decrease. During 2008, we experienced an aggregate net loss of business of approximately $55 billion, compared to net new business of approximately $116 billion during 2007. Our levels of assets under management were affected by a number of factors, including investor issues related to SSgA’s active fixed-income strategies and the relative under-performance of certain of our passive equity products. The net loss of business of $55 billion for 2008 did not reflect new business awarded to us during 2008 that had not been installed prior to December 31, 2008. This new business will be reflected in assets under management in future periods after installation. Assets under management consisted of the following at December 31: ASSETS UNDER MANAGEMENT
<table><tr><td> As of December 31,</td><td> 2008</td><td> 2007</td><td> 2006</td><td> 2005</td><td> 2004</td><td>2007-2008 Annual Growth Rate</td><td>2004-2008 Compound Annual Growth Rate</td></tr><tr><td> (Dollars in billions)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Equities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Passive</td><td>$576</td><td>$803</td><td>$691</td><td>$625</td><td>$600</td><td>-28%</td><td>-1%</td></tr><tr><td>Active and other</td><td>91</td><td>206</td><td>181</td><td>147</td><td>122</td><td>-56</td><td>-7</td></tr><tr><td>Company stock/ESOP</td><td>39</td><td>79</td><td>85</td><td>76</td><td>77</td><td>-51</td><td>-16</td></tr><tr><td>Total equities</td><td>706</td><td>1,088</td><td>957</td><td>848</td><td>799</td><td>-35</td><td>-3</td></tr><tr><td>Fixed-income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Passive</td><td>238</td><td>218</td><td>180</td><td>128</td><td>106</td><td>9</td><td>22</td></tr><tr><td>Active</td><td>32</td><td>41</td><td>34</td><td>28</td><td>35</td><td>-22</td><td>-2</td></tr><tr><td>Cash and money market</td><td>468</td><td>632</td><td>578</td><td>437</td><td>414</td><td>-26</td><td>3</td></tr><tr><td>Total fixed-income and cash/money market</td><td>738</td><td>891</td><td>792</td><td>593</td><td>555</td><td>-17</td><td>7</td></tr><tr><td>Total</td><td>$1,444</td><td>$1,979</td><td>$1,749</td><td>$1,441</td><td>$1,354</td><td>-27</td><td>2</td></tr></table>
To measure, monitor, and report on our interest-rate risk position, we use (1) NIR simulation, or NIR-at-risk, which measures the impact on NIR over the next twelve months to immediate, or “rate shock,” and gradual, or “rate ramp,” changes in market interest rates; and (2) economic value of equity, or EVE, which measures the impact on the present value of all NIR-related principal and interest cash flows of an immediate change in interest rates. NIR-at-risk is designed to measure the potential impact of changes in market interest rates on NIR in the short term. EVE, on the other hand, is a long-term view of interest-rate risk, but with a view toward liquidation of State Street. Both of these measures are subject to ALCO-established guidelines, and are monitored regularly, along with other relevant simulations, scenario analyses and stress tests by both Global Treasury and ALCO. In calculating our NIR-at-risk, we start with a base amount of NIR that is projected over the next twelve months, assuming that the then-current yield curve remains unchanged over the period. Our existing balance sheet assets and liabilities are adjusted by the amount and timing of transactions that are forecasted to occur over the next twelve months. That yield curve is then “shocked,” or moved immediately, ±100 basis points in a parallel fashion, or at all points along the yield curve. Two new twelve-month NIR projections are then developed using the same balance sheet and forecasted transactions, but with the new yield curves, and compared to the base scenario. We also perform the calculations using interest rate ramps, which are ±100 basis point changes in interest rates that are assumed to occur gradually over the next twelve-month period, rather than immediately as we do with interest-rate shocks. EVE is based on the change in the present value of all NIR-related principal and interest cash flows for changes in market rates of interest. The present value of existing cash flows with a then-current yield curve serves as the base case. We then apply an immediate parallel shock to that yield curve of ±200 basis points and recalculate the cash flows and related present values. A large shock is used to better capture the embedded option risk in our mortgage-backed securities that results from the borrower’s prepayment opportunity. Key assumptions used in the models described above include the timing of cash flows; the maturity and repricing of balance sheet assets and liabilities, especially option-embedded financial instruments like mortgage-backed securities; changes in market conditions; and interest-rate sensitivities of our customer liabilities with respect to the interest rates paid and the level of balances. These assumptions are inherently uncertain and, as a result, the models cannot precisely predict future NIR or predict the impact of changes in interest rates on NIR and economic value. Actual results could differ from simulated results due to the timing, magnitude and frequency of changes in interest rates and market conditions, changes in spreads and management strategies, among other factors. Projections of potential future streams of NIR are assessed as part of our forecasting process. The following table presents the estimated exposure of NIR for the next twelve months, calculated as of December 31, 2008 and 2007, due to an immediate ± 100 basis point shift in then-current interest rates. Estimated incremental exposures presented below are dependent on management’s assumptions about asset and liability sensitivities under various interest-rate scenarios, such as those previously discussed, and do not reflect any actions management may undertake in order to mitigate some of the adverse effects of interest-rate changes on State Street’s financial performance. NIR-AT-RISK
<table><tr><td></td><td colspan="2">Estimated Exposure to Net Interest Revenue</td></tr><tr><td> (In millions)</td><td>2008</td><td>2007</td></tr><tr><td>Rate change:</td><td></td><td></td></tr><tr><td>+100 bps shock</td><td>$7</td><td>$-98</td></tr><tr><td>-100 bps shock</td><td>-439</td><td>7</td></tr><tr><td>+100 bps ramp</td><td>-29</td><td>-44</td></tr><tr><td>-100 bps ramp</td><td>-166</td><td>20</td></tr></table>
The NIR-at-risk exposure to an immediate 100 bp increase in market interest rates changed from negative at December 31, 2007 to slightly positive at December 31, 2008, while the NIR-at-risk exposure to a 100 bp downward shock in rates changed from slightly positive to significantly negative. These changes were the result of two factors. First, the level of on-balance sheet liquid assets was increased during 2008 in response to the |
3,392.3 | What is the sum of Gross written premiums, Net written premiums and Premiums earned in 2013? (in million) | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8—Commitments and Contingencies (Continued) The following table reconciles changes in the Company’s accrued warranties and related costs (in millions):
<table><tr><td></td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Beginning accrued warranty and related costs</td><td>$284</td><td>$188</td><td>$105</td></tr><tr><td>Cost of warranty claims</td><td>-281</td><td>-267</td><td>-188</td></tr><tr><td>Accruals for product warranties</td><td>227</td><td>363</td><td>271</td></tr><tr><td>Ending accrued warranty and related costs</td><td>$230</td><td>$284</td><td>$188</td></tr></table>
The Company generally does not indemnify end-users of its operating system and application software against legal claims that the software infringes third-party intellectual property rights. Other agreements entered into by the Company sometimes include indemnification provisions under which the Company could be subject to costs and/or damages in the event of an infringement claim against the Company or an indemnified third-party. However, the Company has not been required to make any significant payments resulting from such an infringement claim asserted against itself or an indemnified third-party and, in the opinion of management, does not have a potential liability related to unresolved infringement claims subject to indemnification that would have a material adverse effect on its financial condition or operating results. Therefore, the Company did not record a liability for infringement costs as of either September 29, 2007 or September 30, 2006. Concentrations in the Available Sources of Supply of Materials and Product Certain key components including, but not limited to, microprocessors, enclosures, certain LCDs, certain optical drives, and application-specific integrated circuits (‘‘ASICs’’) are currently obtained by the Company from single or limited sources which subjects the Company to supply and pricing risks. Many of these and other key components that are available from multiple sources including, but not limited to, NAND flash memory, DRAM memory, and certain LCDs, are at times subject to industry-wide shortages and significant commodity pricing fluctuations. In addition, the Company has entered into certain agreements for the supply of critical components at favorable pricing, and there is no guarantee that the Company will be able to extend or renew these agreements when they expire. Therefore, the Company remains subject to significant risks of supply shortages and/or price increases that can adversely affect gross margins and operating margins. In addition, the Company uses some components that are not common to the rest of the global personal computer, consumer electronics and mobile communication industries, and new products introduced by the Company often utilize custom components obtained from only one source until the Company has evaluated whether there is a need for and subsequently qualifies additional suppliers. If the supply of a key single-sourced component to the Company were to be delayed or curtailed, or in the event a key manufacturing vendor delays shipments of completed products to the Company, the Company’s ability to ship related products in desired quantities and in a timely manner could be adversely affected. The Company’s business and financial performance could also be adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source. Continued availability of these components may be affected if producers were to decide to concentrate on the production of common components instead of components customized to meet the Company’s requirements. Finally, significant portions of the Company’s CPUs, iPods, iPhones, logic boards, and other assembled products are now manufactured by outsourcing partners, primarily in various parts of Asia. A significant concentration of this outsourced manufacturing is currently performed by only a few of the Company’s outsourcing partners, often in single locations. Certain of these outsourcing partners are the sole-sourced supplier of components and manufacturing outsourcing for many of the Company’s key products, including but not limited to, assembly substances, including asbestos (i. e. A&E). The Company’s asbestos claims typically involve potential liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos. The Company’s environmental claims typically involve potential liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damages caused by the release of hazardous substances into the land, air or water. As of December 31, 2006, roughly 7% of the Company’s gross reserves are an estimate of the Company’s ultimate liability for A&E claims. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. This estimate is made based on assessments of the underlying exposures as the result of (1) long and variable reporting delays, both from insureds to insurance companies and from ceding companies to reinsurers; (2) historical data, which is more limited and variable on A&E losses than historical information on other types of casualty claims; and (3) unique aspects of A&E exposures for which ultimate value cannot be estimated using traditional reserving techniques. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims. Among the uncertainties are: (a) potential passing of many years between exposure and manifestation of any bodily injury or property damage; (b) difficulty in identifying sources of asbestos or environmental contamination; (c) difficulty in properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure. With respect to asbestos claims in particular, several additional factors have emerged in recent years that further compound the difficulty in estimating the Company’s liability. These developments include: (a) the significant growth over a short period of time in the number of claims filed, in part reflecting a much more aggressive plaintiff bar and including claims against defendants who may only have a “peripheral” connection to asbestos; (b) a disproportionate percentage of claims filed by individuals with no physical injury, which should have little to no financial value but which have increasingly been considered in jury verdicts and settlements; (c) the growth in the number and significance of bankruptcy filings by companies as a result of asbestos claims (including, more recently, bankruptcy filings in which companies attempt to resolve their asbestos liabilities in a manner that is prejudicial to insurers and forecloses insurers from participating in the negotiation of asbestos related bankruptcy reorganization plans); (d) the concentration of claims in a small number of states that favor plaintiffs; (e) the growth in the number of claims that might impact the general liability portion of insurance policies rather than the product liability portion; (f) measures adopted by specific courts to ameliorate the worst procedural abuses; (g) an increase in settlement values being paid to asbestos claimants, especially those with cancer or functional impairment; (h) legislation in some states to address asbestos litigation issues; and (i) the potential that other states or the U. S. Congress may adopt legislation on asbestos litigation. Anecdotal evidence suggest that new claims filing rates have decreased, that new filings of asbestosdriven bankruptcies have decreased and legislative reforms are beginning to diminish the potential ultimate liability for asbestos losses. Management believes that these uncertainties and factors continue to render reserves for A&E and particularly asbestos losses significantly less subject to traditional actuarial analysis than reserves for other types of losses. Given these uncertainties, management believes that no meaningful range for such ultimate losses can be established, particularly for asbestos. Further, A&E reserves may be subject to more variability than non-A&E reserves and such variation could have a material adverse effect on the Company’s financial condition, results of operation and/or cash flow. The Company establishes reserves to the extent that, in the judgment of management, the facts and prevailing law reflect an exposure for the Company or its ceding companies. The following table summarizes incurred losses with respect to A&E on both a gross and net of retrocessional basis for the years indicated:
<table><tr><td>(Dollars in thousands)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Gross basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$649,460</td><td>$728,325</td><td>$765,257</td></tr><tr><td>Incurred losses</td><td>113,400</td><td>77,050</td><td>171,729</td></tr><tr><td>Paid losses</td><td>-112,726</td><td>-155,915</td><td>-208,661</td></tr><tr><td>End of period reserves</td><td>$650,134</td><td>$649,460</td><td>$728,325</td></tr><tr><td>Net basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$450,350</td><td>$506,675</td><td>$534,369</td></tr><tr><td>Incurred losses</td><td>106,595</td><td>81,351</td><td>159,422</td></tr><tr><td>Paid losses</td><td>-45,533</td><td>-137,676</td><td>-187,116</td></tr><tr><td>End of period reserves</td><td>$511,412</td><td>$450,350</td><td>$506,675</td></tr></table>
The Company endeavors to actively engage with every insured account posing significant potential asbestos exposure to Mt. McKinley. Such engagement can take the form of pursuing a final settlement, negotiation, litigation, or the monitoring of claim activity under Settlement in Place (“SIP”) agreements. SIP agreements generally condition an insurer’s payment upon the actual claim experience of the insured and may have annual payment caps or other measures to control the insurer’s payments. The Company’s Mt. McKinley operation is currently managing seven SIP agreements, three of which were executed prior to the acquisition of Mt. McKinley in 2000. The Company’s preference with respect to coverage settlements is to execute settlements that call for a fixed schedule of payments, because such settlements eliminate future uncertainty. The Company has significantly enhanced its classification of insureds by exposure characteristics over time, as well as its analysis by insured for those it considers to be more exposed or active. Those insureds identified as relatively less exposed or active are subject to less rigorous, but still active management, with an emphasis on monitoring those characteristics, which may indicate an increasing exposure or levels of activity. The Company continually focuses on further enhancement of the detailed estimation processes used to evaluate potential exposure of policyholders, including those that may not have reported significant A&E losses. Everest Re’s book of assumed A&E reinsurance is relatively concentrated within a limited number of contracts and for a limited period, from 1977 to 1984. Because the book of business is relatively concentrated and the Company has been managing the A&E exposures for many years, its claim staff is familiar with the ceding companies that have generated most of these liabilities in the past and which are therefore most likely to generate future liabilities. The Company’s claim staff has developed familiarity both with the nature of the business written by its ceding companies and the claims handling and reserving practices of those companies. This level of familiarity enhances the quality of the Company’s analysis of its exposure through those companies. As a result, the Company believes that it can identify those claims on which it has unusual exposure, such as non-products asbestos claims, for concentrated attention. However, in setting reserves for its reinsurance liabilities, the Company relies on claims data supplied, both formally and informally by its ceding companies and brokers. This furnished information is not always timely or accurate and can impact the accuracy and timeliness of the Company’s ultimate loss projections. The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the periods indicated:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Case reserves reported by ceding companies</td><td>$135.4</td><td>$141.5</td><td>$161.0</td></tr><tr><td>Additional case reserves established by the Company (assumed reinsurance)(1)</td><td>116.1</td><td>150.2</td><td>139.7</td></tr><tr><td>Case reserves established by the Company (direct insurance)</td><td>38.9</td><td>63.0</td><td>133.8</td></tr><tr><td>Incurred but not reported reserves</td><td>264.4</td><td>283.9</td><td>352.3</td></tr><tr><td>Gross reserves</td><td>554.8</td><td>638.7</td><td>786.8</td></tr><tr><td>Reinsurance receivable</td><td>-21.9</td><td>-25.6</td><td>-37.7</td></tr><tr><td>Net reserves</td><td>$532.9</td><td>$613.1</td><td>$749.1</td></tr><tr><td>______________</td><td></td><td></td><td></td></tr></table>
(1) Additional reserves are case specific reserves established by the Company in excess of those reported by the ceding company, based on the Company’s assessment of the covered loss. (Some amounts may not reconcile due to rounding. ) Additional losses, including those relating to latent injuries and other exposures, which are as yet unrecognized, the type or magnitude of which cannot be foreseen by either the Company or the industry, may emerge in the future. Such future emergence could have material adverse effects on the Company’s future financial condition, results of operations and cash flows. Commission and brokerage increased by 5.9% to $184.4 million in 2012 compared to $174.0 million in 2011 reflecting higher contingent commissions in 2012. Segment other underwriting expenses increased to $30.6 million in 2012 compared to $26.3 million for the same period in 2011. The increases are primarily attributable to higher personnel benefit costs. Insurance. The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.
<table><tr><td></td><td colspan="3">Years Ended December 31,</td><td colspan="2">2013/2012</td><td colspan="2">2012/2011</td></tr><tr><td>(Dollars in millions)</td><td>2013</td><td>2012</td><td>2011</td><td>Variance</td><td>% Change</td><td>Variance</td><td>% Change</td></tr><tr><td>Gross written premiums</td><td>$1,268.7</td><td>$1,073.1</td><td>$975.6</td><td>$195.6</td><td>18.2%</td><td>$97.5</td><td>10.0%</td></tr><tr><td>Net written premiums</td><td>1,086.2</td><td>852.1</td><td>820.5</td><td>234.1</td><td>27.5%</td><td>31.6</td><td>3.9%</td></tr><tr><td>Premiums earned</td><td>$1,037.4</td><td>$852.4</td><td>$821.2</td><td>$185.0</td><td>21.7%</td><td>$31.3</td><td>3.8%</td></tr><tr><td>Incurred losses and LAE</td><td>931.5</td><td>700.3</td><td>705.9</td><td>231.2</td><td>33.0%</td><td>-5.6</td><td>-0.8%</td></tr><tr><td>Commission and brokerage</td><td>133.7</td><td>117.6</td><td>137.7</td><td>16.1</td><td>13.7%</td><td>-20.1</td><td>-14.6%</td></tr><tr><td>Other underwriting expenses</td><td>119.3</td><td>103.0</td><td>89.5</td><td>16.3</td><td>15.8%</td><td>13.5</td><td>15.1%</td></tr><tr><td>Underwriting gain (loss)</td><td>$-147.0</td><td>$-68.5</td><td>$-111.9</td><td>$-78.6</td><td>114.8%</td><td>$43.5</td><td>-38.8%</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>Point Chg</td><td></td><td>Point Chg</td></tr><tr><td>Loss ratio</td><td>89.8%</td><td>82.2%</td><td>86.0%</td><td></td><td>7.6</td><td></td><td>-3.8</td></tr><tr><td>Commission and brokerage ratio</td><td>12.9%</td><td>13.8%</td><td>16.8%</td><td></td><td>-0.9</td><td></td><td>-3.0</td></tr><tr><td>Other underwriting expense ratio</td><td>11.5%</td><td>12.0%</td><td>10.8%</td><td></td><td>-0.5</td><td></td><td>1.2</td></tr><tr><td>Combined ratio</td><td>114.2%</td><td>108.0%</td><td>113.6%</td><td></td><td>6.2</td><td></td><td>-5.6</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Premiums. Gross written premiums increased by 18.2% to $1,268.7 million in 2013 compared to $1,073.1 million in 2012. This increase was primarily driven by California workers’ compensation, crop and nonstandard auto business. Net written premiums increased by 27.5% to $1,086.2 million in 2013 compared to $852.1 million in 2012. The larger increase in net written premiums compared to gross written premiums is mainly due to less use of reinsurance, particularly on the crop business. Premiums earned increased 21.7% to $1,037.4 million in 2013 compared to $852.4 million in 2012. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period. Gross written premiums increased by 10.0% to $1,073.1 million in 2012 compared to $975.6 million in 2011. This increase was primarily driven by crop and primary A&H medical stop loss business, partially offset by the termination and runoff of several large casualty programs. Net written premiums increased by 3.9% to $852.1 million in 2012 compared to $820.5 million in 2011. The lower increase in net written premiums in comparison to gross written premiums is primarily attributable to a higher level of reinsurance employed for the crop business. Premiums earned increased 3.8% to $852.4 million in 2012 compared to $821.2 million in 2011. The change in premiums earned is relatively consistent with the increase in net written premiums. |
273 | What's the total amount of U.S. large cap stocks , U.S. small cap stocks, Non-U.S. large cap stocks and Non-U.S. small cap stocks in 2013? (in million) | targets. At December 31, 2013, there were no significant holdings of any single issuer and the exposure to derivative instruments was not significant. The following tables present the Company’s pension plan assets measured at fair value on a recurring basis:
<table><tr><td></td><td colspan="4">December 31, 2013</td></tr><tr><td>Asset Category</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>Total</td></tr><tr><td></td><td colspan="4">(in millions)</td></tr><tr><td>Equity securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. large cap stocks</td><td>$97</td><td>$43</td><td>$—</td><td>$140</td></tr><tr><td>U.S. small cap stocks</td><td>55</td><td>1</td><td>—</td><td>56</td></tr><tr><td>Non-U.S. large cap stocks</td><td>21</td><td>35</td><td>—</td><td>56</td></tr><tr><td>Non-U.S. small cap stocks</td><td>21</td><td>—</td><td>—</td><td>21</td></tr><tr><td>Emerging markets</td><td>14</td><td>23</td><td>—</td><td>37</td></tr><tr><td>Debt securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. investment grade bonds</td><td>17</td><td>14</td><td>—</td><td>31</td></tr><tr><td>U.S. high yield bonds</td><td>—</td><td>21</td><td>—</td><td>21</td></tr><tr><td>Non-U.S. investment grade bonds</td><td>—</td><td>14</td><td>—</td><td>14</td></tr><tr><td>Real estate investment trusts</td><td>—</td><td>—</td><td>2</td><td>2</td></tr><tr><td>Hedge funds</td><td>—</td><td>—</td><td>20</td><td>20</td></tr><tr><td>Pooled pension funds</td><td>—</td><td>126</td><td>—</td><td>126</td></tr><tr><td>Cash equivalents</td><td>20</td><td>—</td><td>—</td><td>20</td></tr><tr><td>Total</td><td>$245</td><td>$277</td><td>$22</td><td>$544</td></tr></table>
<table><tr><td></td><td colspan="4">December 31, 2012</td></tr><tr><td>Asset Category</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>Total</td></tr><tr><td></td><td colspan="4">(in millions)</td></tr><tr><td>Equity securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. large cap stocks</td><td>$89</td><td>$14</td><td>$—</td><td>$103</td></tr><tr><td>U.S. small cap stocks</td><td>43</td><td>1</td><td>—</td><td>44</td></tr><tr><td>Non-U.S. large cap stocks</td><td>17</td><td>30</td><td>—</td><td>47</td></tr><tr><td>Emerging markets</td><td>13</td><td>20</td><td>—</td><td>33</td></tr><tr><td>Debt securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. investment grade bonds</td><td>20</td><td>12</td><td>—</td><td>32</td></tr><tr><td>U.S. high yield bonds</td><td>—</td><td>20</td><td>—</td><td>20</td></tr><tr><td>Non-U.S. investment grade bonds</td><td>—</td><td>15</td><td>—</td><td>15</td></tr><tr><td>Real estate investment trusts</td><td>—</td><td>—</td><td>12</td><td>12</td></tr><tr><td>Hedge funds</td><td>—</td><td>—</td><td>18</td><td>18</td></tr><tr><td>Pooled pension funds</td><td>—</td><td>104</td><td>—</td><td>104</td></tr><tr><td>Cash equivalents</td><td>9</td><td>—</td><td>—</td><td>9</td></tr><tr><td>Total</td><td>$191</td><td>$216</td><td>$30</td><td>$437</td></tr></table>
Equity securities are managed to track the performance of common market indices for both U. S. and non-U. S. securities, primarily across large cap, small cap and emerging market asset classes. Debt securities are managed to track the performance of common market indices for both U. S. and non-U. S. investment grade bonds as well as a pool of U. S. high yield bonds. Real estate investment trusts are managed to track the performance of a broad population of investment grade non-agricultural income producing properties. The Company’s investments in hedge funds include investments in a multi-strategy fund and an off-shore fund managed to track the performance of broad fund of fund indices. Pooled pension funds are managed to return 1.5% in excess of a common index of similar pooled pension funds on a rolling three year basis. Cash equivalents consist of holdings in a money market fund that seeks to equal the return of the three month U. S. Treasury bill. The fair value of real estate investment trusts is based primarily on the underlying cash flows of the properties within the trusts which are significant unobservable inputs and classified as Level 3. The fair value of the hedge funds is based on the proportionate share of the underlying net assets of the funds, which are significant unobservable inputs and classified as Level 3. The fair value of pooled pension funds and equity securities held in collective trust funds is based on the fund’s NAV and classified as Level 2 as they trade in principal-to-principal markets. Equity securities and mutual funds traded in active markets are classified as Level 1. For debt securities and cash equivalents, the valuation techniques and classifications are consistent with those used for the Company’s own investments as described in Note 14. Entergy New Orleans, Inc. Management's Financial Discussion and Analysis 339 Net Revenue 2008 Compared to 2007 Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges. Following is an analysis of the change in net revenue comparing 2008 to 2007.
<table><tr><td></td><td>Amount (In Millions)</td></tr><tr><td>2007 net revenue</td><td>$231.0</td></tr><tr><td>Volume/weather</td><td>15.5</td></tr><tr><td>Net gas revenue</td><td>6.6</td></tr><tr><td>Rider revenue</td><td>3.9</td></tr><tr><td>Base revenue</td><td>-11.3</td></tr><tr><td>Other</td><td>7.0</td></tr><tr><td>2008 net revenue</td><td>$252.7</td></tr></table>
The volume/weather variance is due to an increase in electricity usage in the service territory in 2008 compared to the same period in 2007. Entergy New Orleans estimates that approximately 141,000 electric customers and 93,000 gas customers have returned since Hurricane Katrina and are taking service as of December 31, 2008, compared to approximately 132,000 electric customers and 86,000 gas customers as of December 31, 2007. Billed retail electricity usage increased a total of 184 GWh compared to the same period in 2007, an increase of 4%. The net gas revenue variance is primarily due to an increase in base rates in March and November 2007. Refer to Note 2 to the financial statements for a discussion of the base rate increase. The rider revenue variance is due primarily to higher total revenue and a storm reserve rider effective March 2007 as a result of the City Council's approval of a settlement agreement in October 2006. The approved storm reserve has been set to collect $75 million over a ten-year period through the rider and the funds will be held in a restricted escrow account. The settlement agreement is discussed in Note 2 to the financial statements. The base revenue variance is primarily due to a base rate recovery credit, effective January 2008. The base rate credit is discussed in Note 2 to the financial statements. Gross operating revenues and fuel and purchased power expenses Gross operating revenues increased primarily due to: x an increase of $58.9 million in gross wholesale revenue due to increased sales to affiliated customers and an increase in the average price of energy available for resale sales; x an increase of $47.7 million in electric fuel cost recovery revenues due to higher fuel rates and increased electricity usage; and x an increase of $22 million in gross gas revenues due to higher fuel recovery revenues and increases in gas base rates in March 2007 and November 2007. Fuel and purchased power increased primarily due to increases in the average market prices of natural gas and purchased power in addition to an increase in demand. Table of Contents Seasonality Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment in the Caribbean, Asia and Australia during that period. Passengers and Capacity Selected statistical information is shown in the following table (see Financial Presentation- Description of Certain Line Items and Selected Operational and Financial Metrics under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, for definitions): |
735 | What's the total amount of theU.S. dollars sold for Pounds sterling in the years where U.S. dollars sold for Pounds sterling is greater than 1? | AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) of certain of its assets and liabilities under its interest rate swap agreements held as of December 31, 2006 and entered into during the first half of 2007. In addition, the Company paid $8.0 million related to a treasury rate lock agreement entered into and settled during the year ended December 31, 2008. The cost of the treasury rate lock is being recognized as additional interest expense over the 10-year term of the 7.00% Notes. During the year ended December 31, 2007, the Company also received $3.1 million in cash upon settlement of the assets and liabilities under ten forward starting interest rate swap agreements with an aggregate notional amount of $1.4 billion, which were designated as cash flow hedges to manage exposure to variability in cash flows relating to forecasted interest payments in connection with the Certificates issued in the Securitization in May 2007. The settlement is being recognized as a reduction in interest expense over the five-year period for which the interest rate swaps were designated as hedges. The Company also received $17.0 million in cash upon settlement of the assets and liabilities under thirteen additional interest rate swap agreements with an aggregate notional amount of $850.0 million that managed exposure to variability of interest rates under the credit facilities but were not considered cash flow hedges for accounting purposes. This gain is included in other income in the accompanying consolidated statement of operations for the year ended December 31, 2007. As of December 31, 2008 and 2007, other comprehensive (loss) income included the following items related to derivative financial instruments (in thousands):
<table><tr><td></td><td>2008</td><td>2007</td></tr><tr><td>Deferred loss on the settlement of the treasury rate lock, net of tax</td><td>$-4,332</td><td>$-4,901</td></tr><tr><td>Deferred gain on the settlement of interest rate swap agreements entered into in connection with the Securitization, net oftax</td><td>1,238</td><td>1,636</td></tr><tr><td>Unrealized losses related to interest rate swap agreements, net of tax</td><td>-16,349</td><td>-486</td></tr></table>
During the years ended December 31, 2008 and 2007, the Company recorded an aggregate net unrealized loss of approximately $15.8 million and $3.2 million, respectively (net of a tax provision of approximately $10.2 million and $2.0 million, respectively) in other comprehensive loss for the change in fair value of interest rate swaps designated as cash flow hedges and reclassified an aggregate of $0.1 million and $6.2 million, respectively (net of an income tax provision of $2.0 million and an income tax benefit of $3.3 million, respectively) into results of operations.9. FAIR VALUE MEASUREMENTS The Company determines the fair market values of its financial instruments based on the fair value hierarchy established in SFAS No.157, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The Company’s Level 1 assets consist of available-for-sale securities traded on active markets as well as certain Brazilian Treasury securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. TELEFLEX INCORPORATED NOTES?TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company issued 82,865, 93,367 and 105,239 of non-vested restricted stock units in 2017, 2016 and 2015, respectively, the majority of which provide for vesting as to all underlying shares on the third anniversary of the grant date. The weighted average grant-date fair value for non-vested restricted stock units granted during 2017, 2016 and 2015 was $187.85, $142.71 and $118.00, respectively. The Company recorded $11.2 million of expense related to restricted stock units during 2017, which is included in cost of goods sold or selling, general and administrative expenses. The unamortized share-based compensation cost related to non-vested restricted stock units, net of expected forfeitures, was $13.2 million, which is expected to be recognized over a weighted-average period of 1.8 years. The Company uses treasury stock to provide shares of common stock in connection with vesting of the restricted stock units. TELEFLEX INCORPORATED NOTES?TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) F-37 Note 13?— Income taxes The following table summarizes the components of the provision for income taxes from continuing operations:
<table><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td></td><td colspan="3">(Dollars in thousands)</td></tr><tr><td>Current:</td><td></td><td></td><td></td></tr><tr><td>Federal</td><td>$133,621</td><td>$2,344</td><td>$-4,700</td></tr><tr><td>State</td><td>5,213</td><td>5,230</td><td>2,377</td></tr><tr><td>Foreign</td><td>35,444</td><td>28,842</td><td>53,151</td></tr><tr><td>Deferred:</td><td></td><td></td><td></td></tr><tr><td>Federal</td><td>-258,247</td><td>-25,141</td><td>-35,750</td></tr><tr><td>State</td><td>1,459</td><td>-1,837</td><td>-5,012</td></tr><tr><td>Foreign</td><td>212,158</td><td>-1,364</td><td>-2,228</td></tr><tr><td></td><td>$129,648</td><td>$8,074</td><td>$7,838</td></tr></table>
The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. The legislation significantly changes U. S. tax law by, among other things, permanently reducing corporate income tax rates from a maximum of 35% to 21%, effective January 1, 2018; implementing a territorial tax system, by generally providing for, among other things, a dividends received deduction on the foreign source portion of dividends received from a foreign corporation if specified conditions are met; and imposing a one-time repatriation tax on undistributed post-1986 foreign subsidiary earnings and profits, which are deemed repatriated for purposes of the tax. As a result of the TCJA, the Company reassessed and revalued its ending net deferred tax liabilities at December 31, 2017 and recognized a?$46.1 million?provisional tax benefit in the Company’s consolidated statement of income for the year ended December 31, 2017. As a result of the deemed repatriation tax under the TCJA, the Company recognized a $154.0 million provisional tax expense in the Company’s consolidated statement of income for the year ended December 31, 2017, and the Company expects to pay this tax over an eight-year period. While the TCJA provides for a territorial tax system, beginning in 2018, it includes?two?new U. S. tax base erosion provisions, the global intangible low-taxed income (“GILTI”) provisions and the base-erosion and anti-abuse tax (“BEAT”) provisions. The GILTI provisions require the Company to include in its U. S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company expects that it will be subject to incremental U. S. tax on GILTI income beginning in 2018. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the TCJA and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, "Income Taxes. " Under U. S. GAAP, the Company may make an accounting policy election to either (1) treat future taxes with respect to the inclusion in U. S. taxable income of amounts related to GILTI as current period expense when incurred (the “period cost method”) or (2) take such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on an analysis of the Company’s global income to determine whether the Company expects to have future U. S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. The determination of whether the Company expects to have future U. S. inclusions ? Miller Insurance Services LLP, which is a Pounds sterling functional entity, earns significant non-functional currency revenues, in which case the Company limits its exposure to exchange rate changes by the use of forward contracts matched to a percentage of forecast cash inflows in specific currencies and periods. However, where the foreign exchange risk relates to any Pounds sterling pension benefits assets or liability for pension benefits, we do not hedge the risk. Consequently, if our London market operations have a significant pension asset or liability, we may be exposed to accounting gains and losses, recognized in other comprehensive income or loss, if the U. S. dollar and Pounds sterling exchange rates change. We do, however, hedge the Pounds sterling contributions into the pension plan. Translation risk Outside our U. S. and London market operations, we predominantly earn revenues and incur expenses in the local currency. When we translate the results and net assets of these operations into U. S. dollars for reporting purposes, movements in exchange rates will affect reported results and net assets. For example, if the U. S. dollar strengthens against the Euro, the reported results of our Eurozone operations in U. S. dollar terms will be lower. With the exception of foreign currency hedges for certain intercompany loans that are not designated as hedging instruments, we do not hedge translation risk. The table below provides information about our foreign currency forward exchange contracts, which are sensitive to exchange rate risk. The table summarizes the U. S. dollar equivalent amounts of each currency bought and sold forward and the weighted average contractual exchange rates. All forward exchange contracts mature within three years.
<table><tr><td></td><td colspan="6">Settlement date before December 31,</td></tr><tr><td></td><td colspan="2">2017</td><td colspan="2">2018</td><td colspan="2">2019</td></tr><tr><td>December 31, 2016</td><td>Contract amount</td><td>Average contractual exchange rate</td><td>Contract amount</td><td>Average contractual exchange rate</td><td>Contract amount</td><td>Average contractual exchange rate</td></tr><tr><td></td><td>(millions)</td><td></td><td>(millions)</td><td></td><td>(millions)</td><td></td></tr><tr><td>Foreign currency sold</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>U.S. dollars sold for Pounds sterling</td><td>$390</td><td>$1.51 = £1</td><td>$268</td><td>$1.46 = £1</td><td>$77</td><td>$1.39 = £1</td></tr><tr><td>Euro sold for U.S. dollars</td><td>74</td><td>€1 = $1.20</td><td>48</td><td>€1 = $1.19</td><td>14</td><td>€1 = $1.17</td></tr><tr><td>Japanese yen sold for U.S. dollars</td><td>21</td><td>¥110.85 = $1</td><td>13</td><td>¥110.90 - $1</td><td>5</td><td>¥98.63 = $1</td></tr><tr><td>Euro sold for Pounds sterling</td><td>22</td><td>€1 = £1.21</td><td>9</td><td>1 = £1.33</td><td>4</td><td>€1 = £1.24</td></tr><tr><td>Total</td><td>$507</td><td></td><td>$338</td><td></td><td>$100</td><td></td></tr><tr><td>Fair value<sup>(i)</sup></td><td>$-65</td><td></td><td>$-40</td><td></td><td>$-5</td><td></td></tr></table>
(i) Represents the difference between the contract amount and the cash flow in U. S. dollars which would have been receivable had the foreign currency forward exchange contracts been entered into on December 31, 2016 at the forward exchange rates prevailing at that date. |
105,588 | What is the average amount of Paid losses of At December 31, 2016, and Vested of Years Ended December 31, 2016 Shares ? | Part II Item 5—Market for Registrant’s Common Equity and Related Stockholder Matters Market Information. The common stock of the Company is currently traded on the New York Stock Exchange (NYSE) under the symbol ‘‘AES. ’’ The following tables set forth the high and low sale prices for the common stock as reported by the NYSE for the periods indicated.
<table><tr><td>2002</td><td>High</td><td>Low</td><td>2001</td><td>High</td><td>Low</td></tr><tr><td>First Quarter</td><td>$17.84</td><td>$4.11</td><td>First Quarter</td><td>$60.15</td><td>$41.30</td></tr><tr><td>Second Quarter</td><td>9.17</td><td>3.55</td><td>Second Quarter</td><td>52.25</td><td>39.95</td></tr><tr><td>Third Quarter</td><td>4.61</td><td>1.56</td><td>Third Quarter</td><td>44.50</td><td>12.00</td></tr><tr><td>Fourth Quarter</td><td>3.57</td><td>0.95</td><td>Fourth Quarter</td><td>17.80</td><td>11.60</td></tr></table>
Holders. As of March 3, 2003, there were 9,663 record holders of the Company’s Common Stock, par value $0.01 per share. Dividends. Under the terms of the Company’s senior secured credit facilities entered into with a commercial bank syndicate, the Company is not allowed to pay cash dividends. In addition, the Company is precluded from paying cash dividends on its Common Stock under the terms of a guaranty to the utility customer in connection with the AES Thames project in the event certain net worth and liquidity tests of the Company are not met. The ability of the Company’s project subsidiaries to declare and pay cash dividends to the Company is subject to certain limitations in the project loans, governmental provisions and other agreements entered into by such project subsidiaries. Securities Authorized for Issuance under Equity Compensation Plans. See the information contained under the caption ‘‘Securities Authorized for Issuance under Equity Compensation Plans’’ of the Proxy Statement for the Annual Meeting of Stockholders of the Registrant to be held on May 1, 2003, which information is incorporated herein by reference. Key actuarial assumptions contain no explicit provisions for reserve uncertainty nor does the Company supplement the actuarially determined reserves for uncertainty. Carried reserves at each reporting date are the Company’s best estimate of ultimate unpaid losses and LAE at that date. The Company completes detailed reserve studies for each exposure group annually for both reinsurance and insurance operations. The completed annual reserve studies are “rolled-forward” for each accounting period until the subsequent reserve study is completed. Analyzing the roll-forward process involves comparing actual reported losses to expected losses based on the most recent reserve study. The Company analyzes significant variances between actual and expected losses and post adjustments to its reserves as warranted. The Company continues to receive claims under expired insurance and reinsurance contracts asserting injuries and/or damages relating to or resulting from environmental pollution and hazardous substances, including asbestos. Environmental claims typically assert liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damage caused by the release of hazardous substances into the land, air or water. Asbestos claims typically assert liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos. The Company’s reserves include an estimate of the Company’s ultimate liability for A&E claims. The Company’s A&E liabilities emanate from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. All of the contracts of insurance and reinsurance, under which the Company has received claims during the past three years, expired more than 20 years ago. There are significant uncertainties surrounding the Company’s reserves for its A&E losses. A&E exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The following table summarizes incurred losses with respect to A&E reserves on both a gross and net of reinsurance basis for the periods indicated:
<table><tr><td></td><td colspan="3">At December 31,</td></tr><tr><td>(Dollars in thousands)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Gross basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$441,111</td><td>$433,117</td><td>$476,205</td></tr><tr><td>Incurred losses</td><td>90,009</td><td>73,336</td><td>40,000</td></tr><tr><td>Paid losses</td><td>-82,126</td><td>-65,342</td><td>-83,088</td></tr><tr><td>End of period reserves</td><td>$448,994</td><td>$441,111</td><td>$433,117</td></tr><tr><td>Net basis:</td><td></td><td></td><td></td></tr><tr><td>Beginning of period reserves</td><td>$319,072</td><td>$319,620</td><td>$458,211</td></tr><tr><td>Incurred losses</td><td>37,137</td><td>53,909</td><td>38,440</td></tr><tr><td>Paid losses</td><td>-38,128</td><td>-54,457</td><td>-177,031</td></tr><tr><td>End of period reserves</td><td>$318,081</td><td>$319,072</td><td>$319,620</td></tr></table>
On July 13, 2015, the Company sold Mt. McKinley, a Delaware domiciled insurance company and whollyowned subsidiary of the Company to Clearwater Insurance Company, a Delaware domiciled insurance company. Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater Insurance Company. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which related entirely to A&E business and had been reinsured by Bermuda Re. As consideration for entering into the retrocession treaty, Everest Re Bermuda transferred cash of $140,279 thousand, an amount equal to the net loss reserves as of the closing date. The maximum liability retroceded under the retrocession treaty will be $440,279 thousand, equal to the retrocession payment plus $300,000 thousand. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty. The following table summarizes information about share options outstanding for the period indicated:
<table><tr><td></td><td colspan="5">At December 31, 2017</td></tr><tr><td></td><td colspan="3">Options Outstanding</td><td colspan="2">Options Exercisable</td></tr><tr><td></td><td></td><td>Weighted-</td><td></td><td></td><td></td></tr><tr><td></td><td></td><td>Average</td><td>Weighted-</td><td></td><td>Weighted-</td></tr><tr><td></td><td>Number</td><td>Remaining</td><td>Average</td><td>Number</td><td>Average</td></tr><tr><td>Range of</td><td>Outstanding</td><td>Contractual</td><td>Exercise</td><td>Exercisable</td><td>Exercise</td></tr><tr><td>Exercise Prices</td><td>at 12/31/17</td><td>Life</td><td>Price</td><td>at 12/31/17</td><td>Price</td></tr><tr><td>$71.7150 - $78.1700</td><td>79,760</td><td>1.1</td><td>$71.72</td><td>79,760</td><td>$71.72</td></tr><tr><td>$78.1800 - $85.6300</td><td>61,900</td><td>2.1</td><td>84.63</td><td>61,900</td><td>84.63</td></tr><tr><td>$85.6400 - $87.4700</td><td>88,590</td><td>3.1</td><td>86.62</td><td>88,590</td><td>86.62</td></tr><tr><td>$87.4800 - $89.4100</td><td>110,060</td><td>4.1</td><td>88.32</td><td>110,060</td><td>88.32</td></tr><tr><td>$89.4200 - $110.1300</td><td>20,054</td><td>1.1</td><td>97.41</td><td>20,054</td><td>97.41</td></tr><tr><td></td><td>360,364</td><td>2.7</td><td>84.10</td><td>360,364</td><td>84.10</td></tr></table>
The following table summarizes the status of the Company’s non-vested shares and changes for the periods indicated:
<table><tr><td></td><td colspan="6">Years Ended December 31,</td></tr><tr><td></td><td colspan="2">2017</td><td colspan="2">2016</td><td colspan="2">2015</td></tr><tr><td></td><td></td><td>Weighted-</td><td></td><td>Weighted-</td><td></td><td>Weighted-</td></tr><tr><td></td><td></td><td>Average</td><td></td><td>Average</td><td></td><td>Average</td></tr><tr><td></td><td></td><td>Grant Date</td><td></td><td>Grant Date</td><td></td><td>Grant Date</td></tr><tr><td>Restricted (non-vested) Shares</td><td>Shares</td><td>Fair Value</td><td>Shares</td><td>Fair Value</td><td>Shares</td><td>Fair Value</td></tr><tr><td>Outstanding at January 1,</td><td>435,338</td><td>$164.21</td><td>435,336</td><td>$143.02</td><td>467,745</td><td>$120.84</td></tr><tr><td>Granted</td><td>160,185</td><td>234.01</td><td>173,546</td><td>186.37</td><td>156,262</td><td>178.80</td></tr><tr><td>Vested</td><td>152,397</td><td>151.80</td><td>145,834</td><td>130.54</td><td>154,387</td><td>113.12</td></tr><tr><td>Forfeited</td><td>21,865</td><td>187.82</td><td>27,710</td><td>147.32</td><td>34,284</td><td>138.19</td></tr><tr><td>Outstanding at December 31,</td><td>421,261</td><td>194.01</td><td>435,338</td><td>164.21</td><td>435,336</td><td>143.02</td></tr></table>
As of December 31, 2017, there was $56,981 thousand of total unrecognized compensation cost related to non-vested share-based compensation expense. That cost is expected to be recognized over a weightedaverage period of 3.1 years. The total fair value of shares vested during the years ended December 31, 2017, 2016 and 2015, was $23,134 thousand, $19,037 thousand and $17,464 thousand, respectively. The tax benefit realized from the shares vested for the year ended December 31, 2017 was $10,130 thousand. In addition to the 2010 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, Group issued 404 common shares in 2017, 547 common shares in 2016 and 426 common shares in 2015 to the Company’s non-employee directors as compensation for their service as directors. These issuances had aggregate values of approximately $94 thousand, $103 thousand and $75 thousand, respectively. Since its 1995 initial public offering, the Company has issued to certain key employees of the Company 2,141,557 restricted common shares, of which 280,452 restricted shares have been cancelled. The Company has issued to non-employee directors of the Company 145,817 restricted common shares, of which no restricted shares have been cancelled. The Company acquired 60,453, 70,010 and 82,277 common shares at a cost of $14,240 thousand, $12,111 thousand and $14,666 thousand in 2017, 2016 and 2015, respectively, from employees and non-employee directors who chose to pay required withholding taxes and/or the exercise cost on option exercises or restricted share vestings by withholding shares. The Company’s loss reserving methodologies continuously monitor the emergence of loss and loss development trends, seeking, on a timely basis, to both adjust reserves for the impact of trend shifts and to factor the impact of such shifts into the Company’s underwriting and pricing on a prospective basis. Reserves for Asbestos and Environmental Losses and LAE. At December 31, 2017, the Company’s gross reserves for A&E claims represented 3.8% of its total reserves. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. Liabilities related to Mt. McKinley’s direct business, which had been ceded to Bermuda Re previously, were retroceded to an affiliate of Clearwater Insurance Company in July 2015, concurrent with the sale of Mt. McKinley to Clearwater Insurance Company. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims and ultimate values cannot be estimated using traditional reserving techniques. See ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asbestos and Environmental Exposures” and Item 8, “Financial Statements and Supplementary Data” - Note 3 of Notes to Consolidated Financial Statements. The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the periods indicated:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Gross reserves</td><td>$449.0</td><td>$441.1</td><td>$433.1</td></tr><tr><td>Reinsurance receivable</td><td>-130.9</td><td>-122.0</td><td>-113.5</td></tr><tr><td>Net reserves</td><td>$318.1</td><td>$319.1</td><td>$319.6</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table>
On July 13, 2015, the Company sold Mt. McKinley to Clearwater Insurance Company. Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which had been reinsured by Bermuda Re. As consideration for entering into the retrocession treaty, Bermuda Re transferred cash of $140.3 million, an amount equal to the net loss reserves as of the closing date. Of the $140.3 million of net loss reserves retroceded, $100.5 million were related to A&E business. The maximum liability retroceded under the retrocession treaty will be $440.3 million, equal to the retrocession payment plus $300.0 million. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty. In 2017, during its normal exposure analysis, the Company increased its net A&E reserves by $37.1 million, all of which related to its assumed reinsurance business. Additional losses, including those relating to latent injuries and other exposures, which are as yet unrecognized, the type or magnitude of which cannot be foreseen by either the Company or the industry, may emerge in the future. Such future emergence could have material adverse effects on the Company’s future financial condition, results of operations and cash flows. Future Policy Benefit Reserves. The Company wrote a limited amount of life and annuity reinsurance in its Bermuda segment. Future policy benefit liabilities for annuities are reported at the accumulated fund balance of these contracts. Reserves for those liabilities include mortality provisions with respect to life and annuity claims, both reported and unreported. Actual experience in a particular period may be worse than assumed experience and, consequently, may adversely affect the Company’s operating results for that period. See ITEM 8, “Financial Statements and Supplementary Data” - Note 1F of Notes to Consolidated Financial Statements. |
3,428.2 | The total amount of which section ranks first for Derivative liabilities -2? (in million) | FHLB Advances and Other Borrowings FHLB Advances—The Company had $0.7 billion in floating-rate and $0.2 billion in fixed-rate FHLB advances at both December 31, 2013 and 2012. The floating-rate advances adjust quarterly based on the LIBOR. During the year ended December 31, 2012, $650.0 million of fixed-rate FHLB advances were converted to floating-rate for a total cost of approximately $128 million which was capitalized and will be amortized over the remaining maturities using the effective interest method. In addition, during the year ended December 31, 2012, the Company paid down in advance of maturity $1.0 billion of its FHLB advances and recorded $69.1 million in losses on the early extinguishment. This loss was recorded in the gains (losses) on early extinguishment of debt line item in the consolidated statement of income (loss). The Company did not have any similar transactions for the years ended December 31, 2013 and 2011. As a condition of its membership in the FHLB Atlanta, the Company is required to maintain a FHLB stock investment currently equal to the lesser of: a percentage of 0.12% of total Bank assets; or a dollar cap amount of $20 million. Additionally, the Bank must maintain an Activity Based Stock investment which is currently equal to 4.5% of the Bank’s outstanding advances at the time of borrowing. The Company had an investment in FHLB stock of $61.4 million and $67.4 million at December 31, 2013 and 2012, respectively. The Company must also maintain qualified collateral as a percent of its advances, which varies based on the collateral type, and is further adjusted by the outcome of the most recent annual collateral audit and by FHLB’s internal ranking of the Bank’s creditworthiness. These advances are secured by a pool of mortgage loans and mortgage-backed securities. At December 31, 2013 and 2012, the Company pledged loans with a lendable value of $3.9 billion and $4.8 billion, respectively, of the one- to four-family and home equity loans as collateral in support of both its advances and unused borrowing lines. Other Borrowings—Prior to 2008, ETBH raised capital through the formation of trusts, which sold trust preferred securities in the capital markets. The capital securities must be redeemed in whole at the due date, which is generally 30 years after issuance. Each trust issued Floating Rate Cumulative Preferred Securities (“trust preferred securities”), at par with a liquidation amount of $1,000 per capital security. The trusts used the proceeds from the sale of issuances to purchase Floating Rate Junior Subordinated Debentures (“subordinated debentures”) issued by ETBH, which guarantees the trust obligations and contributed proceeds from the sale of its subordinated debentures to E*TRADE Bank in the form of a capital contribution. The most recent issuance of trust preferred securities occurred in 2007. The face values of outstanding trusts at December 31, 2013 are shown below (dollars in thousands):
<table><tr><td>Trusts</td><td>Face Value</td><td>Maturity Date</td><td>Annual Interest Rate</td></tr><tr><td>ETBH Capital Trust II</td><td>$5,000</td><td>2031</td><td>10.25%</td></tr><tr><td>ETBH Capital Trust I</td><td>20,000</td><td>2031</td><td>3.75% above 6-month LIBOR</td></tr><tr><td>ETBH Capital Trust V, VI, VIII</td><td>51,000</td><td>2032</td><td>3.25%-3.65% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust VII, IX—XII</td><td>65,000</td><td>2033</td><td>3.00%-3.30% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XIII—XVIII, XX</td><td>77,000</td><td>2034</td><td>2.45%-2.90% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XIX, XXI, XXII</td><td>60,000</td><td>2035</td><td>2.20%-2.40% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XXIII—XXIV</td><td>45,000</td><td>2036</td><td>2.10% above 3-month LIBOR</td></tr><tr><td>ETBH Capital Trust XXV—XXX</td><td>110,000</td><td>2037</td><td>1.90%-2.00% above 3-month LIBOR</td></tr><tr><td>Total</td><td>$433,000</td><td></td><td></td></tr></table>
Principal Financial Group, Inc. Notes to Consolidated Financial Statements — (continued) 6. Derivative Financial Instruments — (continued) The fair value of our derivative instruments classified as assets and liabilities was as follows:
<table><tr><td> </td><td colspan="2"> Derivative assets -1</td><td colspan="2"> Derivative liabilities -2</td></tr><tr><td> </td><td> December 31, 2009</td><td> December 31, 2008</td><td> December 31, 2009</td><td> December 31, 2008</td></tr><tr><td> </td><td colspan="4"><i>(in millions)</i> </td></tr><tr><td> Derivatives designated as hedging instruments</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate contracts</td><td>$81.5</td><td>$250.8</td><td>$309.1</td><td>$819.2</td></tr><tr><td>Foreign exchange contracts</td><td>444.4</td><td>410.8</td><td>240.6</td><td>300.4</td></tr><tr><td>Total derivatives designated as hedging instruments</td><td>$525.9</td><td>$661.6</td><td>$549.7</td><td>$1,119.6</td></tr><tr><td> Derivatives not designated as hedging instruments</td><td></td><td></td><td></td><td></td></tr><tr><td>Interest rate contracts</td><td>$433.5</td><td>$802.1</td><td>$336.8</td><td>$621.5</td></tr><tr><td>Foreign exchange contracts</td><td>107.5</td><td>121.3</td><td>75.0</td><td>155.1</td></tr><tr><td>Equity contracts</td><td>149.8</td><td>222.1</td><td>—</td><td>—</td></tr><tr><td>Credit contracts</td><td>15.5</td><td>70.7</td><td>84.0</td><td>227.2</td></tr><tr><td>Other contracts</td><td>—</td><td>—</td><td>128.1</td><td>185.2</td></tr><tr><td>Total derivatives not designated as hedging instruments</td><td>$706.3</td><td>$1,216.2</td><td>$623.9</td><td>$1,189.0</td></tr><tr><td>Total derivative instruments</td><td>$1,232.2</td><td>$1,877.8</td><td>$1,173.6</td><td>$2,308.6</td></tr></table>
(1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivative liabilities with a fair value of $23.6 million and $60.2 million as of December 31, 2009, and December 31, 2008, respectively, are reported with contractholder funds on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. The majority of our credit derivative contracts sold reference a single name or reference security (referred to as ‘‘single name credit default swaps’’). The remainder of our credit derivatives reference either a basket or index of securities. These instruments are either referenced in an over-the-counter credit derivative transaction, or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also have purchased credit protection with identical underlyings to certain of our sold protection transactions. The effect of this purchased protection would reduce our total maximum future payments by $47.0 million and $60.8 million as of December 31, 2009, and December 31, 2008, respectively. These credit derivative transactions had a net fair value of $2.4 million and $21.2 million as of December 31, 2009, and December 31, 2008, respectively. Our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. We purchased certain investment structures with embedded credit features that are fully consolidated into our financial statements. This consolidation results in recognition of the underlying credit derivatives and collateral within the structure, typically high quality fixed maturity securities that are owned by a special purpose vehicle. These credit derivatives reference a single name or several names in a basket structure. In the event of default, the collateral within the structure would typically be liquidated to pay the claims of the credit derivative counterparty. Qorvo, Inc. and Subsidiaries Annual Report on Form 10-K 2019 Notes to Consolidated Financial Statements income to substantially offset the losses earned in prior years. The balance of the cumulative pre-tax book loss was expected to be offset by income in the first half of fiscal 2018 as production at the assembly and test facility continued to increase as the Company reduced its dependence on outside assembly and test subcontractors. After evaluating the positive and negative evidence, management determined that it was more likely than not that the deferred tax assets of this China manufacturing subsidiary would be realized and a valuation allowance would not be provided as of the end of fiscal 2017. As of March 30, 2019, the Company had federal loss carryovers of approximately $39.6 million that expire in fiscal years 2020 to 2030 if unused and state losses of approximately $105.2 million that expire in fiscal years 2020 to 2039 if unused. Federal research credits of $127.6 million, and state credits of $64.9 million may expire in fiscal years 2020 to 2039 and 2020 to 2037, respectively. Foreign losses in the Netherlands of approximately $5.1 million expire in fiscal years 2020 to 2027. Included in the amounts above may be certain net operating losses and other tax attribute assets acquired in conjunction with acquisitions in the current and prior years. The utilization of acquired domestic assets is subject to certain annual limitations as required under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and similar state income tax provisions. The Company has continued to expand its operations and increase its investments in numerous international jurisdictions. These activities expose the Company to taxation in multiple foreign jurisdictions. It is management’s opinion that current and future undistributed foreign earnings will be permanently reinvested, except for the earnings of Qorvo International Pte. Ltd. , our operating subsidiary in Singapore. No provision for U. S. federal income, state income or foreign local withholding taxes has been made with respect to the undistributed earnings of any other foreign subsidiary. It is not practical to estimate the additional tax that would be incurred, if any, if the permanently reinvested earnings were repatriated. The Company has foreign subsidiaries with tax holiday agreements in Singapore and Costa Rica. These tax holiday agreements have varying rates and expire in December 2021 and March 2024, respectively. Incentives from these countries are subject to the Company meeting certain employment and investment requirements. The Company does not expect that the Singapore legislation enacted in February 2017, which will exclude from the Company’s existing Development and Expansion Incentive grant the benefit of the reduced tax rate for intellectual property income earned after June 30, 2021, will have an impact on the Company. Income tax expense decreased by $34.6 million (an impact of approximately $0.28 and $0.27 per basic and diluted share, respectively) in fiscal 2019 and $7.9 million (an impact of approximately $0.06 per basic and diluted share) in fiscal 2018 as a result of these agreements. The Company’s gross unrecognized tax benefits totaled $103.2 million as of March 30, 2019, $122.8 million as of March 31, 2018, and $90.6 million as of April 1, 2017. Of these amounts, $99.1 million (net of federal benefit of state taxes), $118.7 million (net of federal benefit of state taxes) and $84.4 million (net of federal benefit of state taxes) as of March 30, 2019, March 31, 2018, and April 1, 2017, respectively, represent the amounts of unrecognized tax benefits that, if recognized, would impact the effective tax rate in each of the fiscal years. The Company’s gross unrecognized tax benefits decreased from $122.8 million as of March 31, 2018 to $103.2 million as of March 30, 2019, primarily due to lapses of statutes of limitations, the conclusion of examinations by U. S. and Singapore tax authorities, the finalization of Regulations related to the Transitional Repatriation Tax, and finalization of the provisional estimates related to the impact of the Tax Act. A reconciliation of fiscal 2017 through fiscal 2019 beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
<table><tr><td></td><td colspan="3">Fiscal Year</td></tr><tr><td></td><td>2019</td><td>2018</td><td>2017</td></tr><tr><td>Beginning balance</td><td>$122,823</td><td>$90,615</td><td>$69,052</td></tr><tr><td>Additions based on positions related to current year</td><td>7,193</td><td>26,431</td><td>20,036</td></tr><tr><td>Additions for tax positions in prior years</td><td>8,369</td><td>5,844</td><td>1,878</td></tr><tr><td>Reductions for tax positions in prior years</td><td>-24,932</td><td>-67</td><td>-29</td></tr><tr><td>Expiration of statute of limitations</td><td>-6,972</td><td>—</td><td>-322</td></tr><tr><td>Settlements</td><td>-3,303</td><td>—</td><td>—</td></tr><tr><td>Ending balance</td><td>$103,178</td><td>$122,823</td><td>$90,615</td></tr></table>
It is the Company’s policy to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During fiscal years 2019, 2018 and 2017, the Company recognized IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2008 (In thousands, except share and per share data) 10. Commitments and Contingencies a. Leases Most of our leased facilities are leased under various operating leases that typically have initial lease terms of ten to fifteen years. A majority of these leases have renewal options with one or more five year options to extend and may have fixed or Consumer Price Index escalation clauses. We also lease equipment under operating leases, primarily computers which have an average lease life of three years. Vehicles and office equipment are also leased and have remaining lease lives ranging from one to seven years. Due to the declining economic environment in 2008, the current fair market values of vans, trucks and mobile shredding units within our vehicle fleet portfolio, which we lease, have declined. As a result, certain vehicle leases that previously met the requirements to be considered operating leases were classified as capital leases upon renewal. The 2008 impact of this change on our consolidated balance sheet as of December 31, 2008 was an increase in property, plant and equipment and debt of $58,517 and had no impact on 2008 operating results. Future operating results will have lower vehicle rent expense (a component of transportation costs within cost of sales), offset by an increased amount of combined depreciation and interest expense in future periods. Total rent expense (including common area maintenance charges) under all of our operating leases was $207,760, $240,833 and $280,360 (including $20,828 associated with vehicle leases which became capital leases in 2008) for the years ended December 31, 2006, 2007 and 2008, respectively. Included in total rent expense was sublease income of $3,740, $4,973 and $5,341 for the years ended December 31, 2006, 2007 and 2008, respectively. Estimated minimum future lease payments (excluding common area maintenance charges) include payments for certain renewal periods at our option because failure to renew results in an economic disincentive due to significant capital expenditure costs (e. g. , racking), thereby making it reasonably assured that we will renew the lease. Such payments in effect at December 31, are as follows:
<table><tr><td> Year</td><td> Operating Lease Payment</td><td> Sublease Income</td><td>Capital Leases</td></tr><tr><td>2009</td><td>$225,290</td><td>$3,341</td><td>$28,608</td></tr><tr><td>2010</td><td>201,315</td><td>1,847</td><td>27,146</td></tr><tr><td>2011</td><td>191,588</td><td>1,223</td><td>19,116</td></tr><tr><td>2012</td><td>186,600</td><td>1,071</td><td>25,489</td></tr><tr><td>2013</td><td>181,080</td><td>988</td><td>9,419</td></tr><tr><td>Thereafter</td><td>2,109,086</td><td>3,539</td><td>95,445</td></tr><tr><td>Total minimum lease payments</td><td>$3,094,959</td><td>$12,009</td><td>$205,223</td></tr><tr><td>Less amounts representing interest</td><td></td><td></td><td>-73,536</td></tr><tr><td>Present value of capital lease obligations</td><td></td><td></td><td>$131,687</td></tr></table>
We have guaranteed the residual value of certain vehicle operating leases to which we are a party. The maximum net residual value guarantee obligation for these vehicles as of December 31, 2008 was $30,415. Such amount does not take into consideration the recovery or resale value associated with these vehicles. We believe that it is not reasonably likely that we will be required to perform under IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2012 (In thousands, except share and per share data) 5. Selected Consolidated Financial Statements of Parent, Guarantors, Canada Company and Non-Guarantors (Continued
<table><tr><td></td><td colspan="6">Year Ended December 31, 2012</td></tr><tr><td></td><td>Parent</td><td>Guarantors</td><td>Canada Company</td><td>Non- Guarantors</td><td>Eliminations</td><td>Consolidated</td></tr><tr><td>Cash Flows from Operating Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash Flows from Operating Activities-Continuing Operations</td><td>$-195,478</td><td>$496,542</td><td>$48,037</td><td>$94,551</td><td>$—</td><td>$443,652</td></tr><tr><td>Cash Flows from Operating Activities-Discontinued Operations</td><td>—</td><td>-8,814</td><td>—</td><td>-2,102</td><td>—</td><td>-10,916</td></tr><tr><td>Cash Flows from Operating Activities</td><td>-195,478</td><td>487,728</td><td>48,037</td><td>92,449</td><td>—</td><td>432,736</td></tr><tr><td>Cash Flows from Investing Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Capital expenditures</td><td>—</td><td>-134,852</td><td>-10,829</td><td>-95,002</td><td>—</td><td>-240,683</td></tr><tr><td>Cash paid for acquisitions, net of cash acquired</td><td>—</td><td>-28,126</td><td>—</td><td>-97,008</td><td>—</td><td>-125,134</td></tr><tr><td>Intercompany loans to subsidiaries</td><td>88,376</td><td>-110,142</td><td>—</td><td>—</td><td>21,766</td><td>—</td></tr><tr><td>Investment in subsidiaries</td><td>-37,572</td><td>-37,572</td><td>—</td><td>—</td><td>75,144</td><td>—</td></tr><tr><td>Investment in restricted cash</td><td>1,498</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1,498</td></tr><tr><td>Additions to customer relationship and acquisition costs</td><td>—</td><td>-23,543</td><td>-2,132</td><td>-3,197</td><td>—</td><td>-28,872</td></tr><tr><td>Investment in joint ventures</td><td>-2,330</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-2,330</td></tr><tr><td>Proceeds from sales of property and equipment and other, net</td><td>—</td><td>-1,739</td><td>5</td><td>3,191</td><td>—</td><td>1,457</td></tr><tr><td>Cash Flows from Investing Activities-Continuing Operations</td><td>49,972</td><td>-335,974</td><td>-12,956</td><td>-192,016</td><td>96,910</td><td>-394,064</td></tr><tr><td>Cash Flows from Investing Activities-Discontinued Operations</td><td>—</td><td>-1,982</td><td>—</td><td>-4,154</td><td>—</td><td>-6,136</td></tr><tr><td>Cash Flows from Investing Activities</td><td>49,972</td><td>-337,956</td><td>-12,956</td><td>-196,170</td><td>96,910</td><td>-400,200</td></tr><tr><td>Cash Flows from Financing Activities:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Repayment of revolving credit and term loan facilities and other debt</td><td>—</td><td>-2,774,070</td><td>-3,069</td><td>-67,554</td><td>—</td><td>-2,844,693</td></tr><tr><td>Proceeds from revolving credit and term loan facilities and other debt</td><td>—</td><td>2,680,107</td><td>—</td><td>51,078</td><td>—</td><td>2,731,185</td></tr><tr><td>Early retirement of senior subordinated notes</td><td>-525,834</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-525,834</td></tr><tr><td>Net proceeds from sales of senior subordinated notes</td><td>985,000</td><td>—</td><td>—</td><td>—</td><td>—</td><td>985,000</td></tr><tr><td>Debt financing (repayment to) and equity contribution from (distribution to) noncontrolling interests, net</td><td>—</td><td>—</td><td>—</td><td>480</td><td>—</td><td>480</td></tr><tr><td>Intercompany loans from parent</td><td>—</td><td>-89,878</td><td>714</td><td>110,930</td><td>-21,766</td><td>—</td></tr><tr><td>Equity contribution from parent</td><td>—</td><td>37,572</td><td>—</td><td>37,572</td><td>-75,144</td><td>—</td></tr><tr><td>Stock repurchases</td><td>-38,052</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-38,052</td></tr><tr><td>Parent cash dividends</td><td>-318,845</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-318,845</td></tr><tr><td>Proceeds from exercise of stock options and employee stock purchase plan</td><td>40,244</td><td>—</td><td>—</td><td>—</td><td>—</td><td>40,244</td></tr><tr><td>Excess tax benefits from stock-based compensation</td><td>1,045</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1,045</td></tr><tr><td>Payment of debt finacing costs</td><td>-1,480</td><td>-781</td><td>—</td><td>—</td><td>—</td><td>-2,261</td></tr><tr><td>Cash Flows from Financing Activities-Continuing Operations</td><td>142,078</td><td>-147,050</td><td>-2,355</td><td>132,506</td><td>-96,910</td><td>28,269</td></tr><tr><td>Cash Flows from Financing Activities-Discontinued Operations</td><td>—</td><td>—</td><td>—</td><td>-39</td><td>—</td><td>-39</td></tr><tr><td>Cash Flows from Financing Activities</td><td>142,078</td><td>-147,050</td><td>-2,355</td><td>132,467</td><td>-96,910</td><td>28,230</td></tr><tr><td>Effect of exchange rates on cash and cash equivalents</td><td>—</td><td>—</td><td>1,867</td><td>937</td><td>—</td><td>2,804</td></tr><tr><td>(Decrease) Increase in cash and cash equivalents</td><td>-3,428</td><td>2,722</td><td>34,593</td><td>29,683</td><td>—</td><td>63,570</td></tr><tr><td>Cash and cash equivalents, beginning of period</td><td>3,428</td><td>10,750</td><td>68,907</td><td>96,760</td><td>—</td><td>179,845</td></tr><tr><td>Cash and cash equivalents, end of period</td><td>$—</td><td>$13,472</td><td>$103,500</td><td>$126,443</td><td>$—</td><td>$243,415</td></tr></table>
IRON MOUNTAIN INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2014 (In thousands, except share and per share data) 2. Summary of Significant Accounting Policies (Continued) Stock Options Under our various stock option plans, options are generally granted with exercise prices equal to the market price of the stock on the date of grant; however, in certain limited instances, options are granted at prices greater than the market price of the stock on the date of grant. The majority of our options become exercisable ratably over a period of five years from the date of grant and generally have a contractual life of ten years from the date of grant, unless the holder’s employment is terminated sooner. Certain of the options we issue become exercisable ratably over a period of ten years from the date of grant and have a contractual life of 12 years from the date of grant, unless the holder’s employment is terminated sooner. As of December 31, 2014, ten-year vesting options represented 8.0% of total outstanding options. Certain of the options we issue become exercisable ratably over a period of three years from the date of grant and have a contractual life of ten years from the date of grant, unless the holder’s employment is terminated sooner. As of December 31, 2014, three-year vesting options represented 34.3% of total outstanding options. Our non-employee directors are considered employees for purposes of our stock option plans and stock option reporting. Options granted to our non-employee directors generally become exercisable one year from the date of grant. Our equity compensation plans generally provide that any unvested options and other awards granted thereunder shall vest immediately if an employee is terminated by the Company, or terminates his or her own employment for good reason (as defined in each plan), in connection with a vesting change in control (as defined in each plan). On January 20, 2015, our stockholders approved the adoption of the Iron Mountain Incorporated 2014 Stock and Cash Incentive Plan (the ‘‘2014 Plan’’). Under the 2014 Plan, the total amount of shares of common stock reserved and available for issuance pursuant to awards granted under the 2014 Plan is 7,750,000. The 2014 Plan permits the Company to continue to grant awards through January 20, 2025. A total of 43,253,839 shares of common stock have been reserved for grants of options and other rights under our various stock incentive plans, including the 2014 Plan. The number of shares available for grant under our various stock incentive plans, not including the 2014 Plan, at December 31, 2014 was 4,581,754. The weighted average fair value of options granted in 2012, 2013 and 2014 was $7.00, $7.69 and $5.70 per share, respectively. These values were estimated on the date of grant using the Black-Scholes option pricing model. |
3,900,000 | What's the total amount of the 3-Year term loan in 2017 in the years where North America is greater than 300 ? | ANALOG DEVICES, INC. NOTES TO CONSOLIDATED FINANCIALSTATEMENTS-(Continued)
<table><tr><td></td><td colspan="2">October 28, 2017</td><td colspan="2">October 29, 2016</td></tr><tr><td></td><td>Principal Amount Outstanding</td><td>Fair Value</td><td>Principal Amount Outstanding</td><td>Fair Value</td></tr><tr><td>3-Year term loan</td><td>$1,950,000</td><td>1,950,000</td><td>—</td><td>—</td></tr><tr><td>5-Year term loan</td><td>2,100,000</td><td>2,100,000</td><td>—</td><td>—</td></tr><tr><td>2021 Notes, due December 2021</td><td>400,000</td><td>399,530</td><td>—</td><td>—</td></tr><tr><td>2023 Notes, due June 2023</td><td>500,000</td><td>498,582</td><td>500,000</td><td>501,307</td></tr><tr><td>2023 Notes, due December 2023</td><td>550,000</td><td>554,411</td><td>—</td><td>—</td></tr><tr><td>2025 Notes, due December 2025</td><td>850,000</td><td>884,861</td><td>850,000</td><td>901,523</td></tr><tr><td>2026 Notes, due December 2026</td><td>900,000</td><td>902,769</td><td>—</td><td>—</td></tr><tr><td>2036 Notes, due December 2036</td><td>250,000</td><td>259,442</td><td>—</td><td>—</td></tr><tr><td>2045 Notes, due December 2045</td><td>400,000</td><td>460,588</td><td>400,000</td><td>425,109</td></tr></table>
k. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure f of contingencies at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates relate to the useful lives of fixed assets, identified intangible assets allowances for doubtful accounts and customer returns, the net realizable value of inventory, potential reserves relating to litigation matters, accrued liabilities, y accrued taxes, deferred tax valuation allowances, assumptions pertaining to share-based payments, and fair value of acquired assets and liabilities, including inventoryy, propertyy, plant and equipment and acquired intangibles, and other reserves. Actual results could differ from those estimates and such dif f ferences may be material to the financial statements. f l. Concentrations of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments and trade accounts receivable. The Company maintains cash, cash equivalents and short-term and long-term investments with high credit quality counterparties, continuously monitors the amount of credit exposure to any one issuer and diversifies its investments in order to minimize its credit risk. The Company sells its products to distributors and original equipment manufacturers involved in a variety of industries including industrial process automation, instrumentation, defense/aerospace, automotive, communications, computers and computer peripherals and consumer electronics. The Company has adopted credit policies and standards to accommodate growth in these markets. The Company performs continuing credit evaluations of its customers’ financial condition and although the Company generally does not require collateral, the Company may require letters of credit from customers in certain circumstances. The Company provides reserves for estimated amounts of accounts receivable that may not be collected. The Company's largest single end customer represented approximately14%, 12% and 13% of total revenue in fiscal years 2017, 2016 and 2015, respectively. m. Concentration of Other Risks The semiconductor industry is characterized by rapid technological change, competitive pricing pressures and cyclical market patterns. The Company’s financial results are affected by a wide variety of factors, including general economic f conditions worldwide, economic conditions specific to the semiconductor industry, the timely implementation of new y manufacturing technologies, the ability to safeguard patents and intellectual property in a rapidly evolving market and reliance on assembly and test subcontractors, third-party wafer fabricators and independent distributors. In addition, the semiconductor market has historically been cyclical and subject to significant economic downturns at various times. The Company is exposed to the risk of obsolescence of its inventory depending on the mix of future business. Additionallyy, a large portion of the Company’s purchases of external wafer and foundry services are from a limited number of suppliers, primarily Taiwan T Semiconductor Manufacturing Company (TSMC). If TSMC or any of the Company’s other key suppliers are unable or unwilling to manufacture and deliver suffficient quantities of components, on the time schedule and of the quality that the Company requires, the Company may be forced to engage additional or replacement suppliers, which could result in significant expenses and disruptions or delays in manufacturing, product development and shipment of product to the Company’s Warranties and Indemnities The Company generally warrants that its products sold to its customers will conform to the Company’s approved specifications and be free from defects in material and workmanship under normal use and service for one year. Subject to certain exceptions, the Company also offers a three-year limited warranty to end users for only those CPU and AMD A-Series APU products that are commonly referred to as “processors in a box” and for PC workstation products. The Company has also offered extended limited warranties to certain customers of “tray” microprocessor products and/or workstation graphics products who have written agreements with the Company and target their computer systems at the commercial and/or embedded markets. Changes in the Company’s estimated liability for product warranty during the years ended December 28, 2013 and December 29, 2012 are as follows:
<table><tr><td></td><td>December 28, 2013</td><td>December 29, 2012</td></tr><tr><td></td><td colspan="2">(In millions)</td></tr><tr><td>Beginning balance</td><td>$16</td><td>$20</td></tr><tr><td>New warranties issued during the period</td><td>27</td><td>28</td></tr><tr><td>Settlements during the period</td><td>-25</td><td>-30</td></tr><tr><td>Changes in liability for pre-existing warranties during the period, includingexpirations</td><td>-1</td><td>-2</td></tr><tr><td>Ending balance</td><td>$17</td><td>$16</td></tr></table>
In addition to product warranties, the Company, from time to time in its normal course of business, indemnifies other parties, with whom it enters into contractual relationships, including customers, lessors and parties to other transactions with the Company, with respect to certain matters. In these limited matters, the Company has agreed to hold certain third parties harmless against specific types of claims or losses, such as those arising from a breach of representations or covenants, third-party claims that the Company’s products when used for their intended purpose(s) and under specific conditions infringe the intellectual property rights of a third party, or other specified claims made against the indemnified party. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material. NOTE 17: Contingencies Securities Class Action On January 15, 2014, a class action lawsuit captioned Hatamian v. AMD, et al. , C. A. No.3:14-cv-00226 was filed against the Company in the United States District Court for the Northern District of California. The complaint purports to assert claims against the Company and certain individual officers for alleged violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5 of the Exchange Act. The plaintiff seeks to represent a proposed class of all persons who purchased or otherwise acquired AMD common stock during the period October 27, 2011 through October 28, 2012. The complaint seeks damages allegedly caused by alleged materially misleading statements and/or material omissions by the Company and the individual officers regarding our 32nm technology and “Llano” product, which statements and omissions, the plaintiffs claim, allegedly operated to inflate artificially the price paid for AMD’s common stock during the period. The complaint seeks unspecified compensatory damages, attorneys’ fees and costs. Based upon information presently known to the Company’s management, the Company believes that the potential liability, if any, will not have a material adverse effect on our financial condition, cash flows or results of operations. GUR is an engineered material used in heavy-duty automotive and industrial applications such as car battery separator panels and industrial conveyor belts, as well as in specialty medical and consumer applications, such as sports equipment and prostheses. GUR micro powder grades are used for high-performance filters, membranes, diagnostic devices, coatings and additives for thermoplastics and elastomers. GUR fibers are also used in protective ballistic applications. Celstran and Compel are long fiber reinforced thermoplastics, which impart extra strength and stiffness, making them more suitable for larger parts than conventional thermoplastics. Polyesters such as Celanex PBT, Vandar, a series of PBT-polyester blends and Riteflex, a thermoplastic polyester elastomer, are used in a wide variety of automotive, electrical and consumer applications, including ignition system parts, radiator grilles, electrical switches, appliance and sensor housings, LEDs and technical fibers. Raw materials for polyesters vary. Base monomers, such as dimethyl terephthalate and PTA, are widely available with pricing dependent on broader polyester fiber and packaging resins market conditions. Smaller volume specialty co-monomers for these products are typically supplied by a few companies. Liquid crystal polymers (“LCP”), such as Vectra, are used in electrical and electronics applications and for precision parts with thin walls and complex shapes or on high-heat cookware application. Fortron, a PPS product, is used in a wide variety of automotive and other applications, especially those requiring heat and/or chemical resistance, including fuel system parts, radiator pipes and halogen lamp housings, and often replaces metal in these demanding applications. Other possible application fields include non-woven filtration devices such as coal fired power plants. Fortron is manufactured by Fortron Industries LLC, Advanced Engineered Materials’ 50-50 venture with Kureha Corporation of Japan. Facilities Advanced Engineered Materials has polymerization, compounding and research and technology centers in Germany, Brazil and the United States. On November 29, 2006, Advanced Engineered Materials reached a settlement with the Frankfurt, Germany, Airport (“Fraport”) to relocate its Kelsterbach, Germany, business, resolving several years of legal disputes related to the planned Frankfurt airport expansion. The final settlement agreement was signed on June 12, 2007. As a result of the settlement, Advanced Engineered Materials will transition its operations from Kelsterbach to the Hoechst Industrial Park in the Rhine Main area by 2011. See Note 29 to the consolidated financial statements for further information. Markets The following table illustrates the destination of the net sales of the Advanced Engineered Materials segment by geographic region for the years ended December 31, 2007, 2006 and 2005. Net Sales to External Customers by Destination — Advanced Engineered Materials
<table><tr><td></td><td colspan="6"> Year Ended</td></tr><tr><td></td><td colspan="2">December 31, 2007</td><td colspan="2">December 31, 2006</td><td colspan="2"> December 31, 2005</td></tr><tr><td></td><td></td><td>% of</td><td></td><td>% of</td><td></td><td> % of </td></tr><tr><td></td><td> $</td><td>Segment</td><td> $</td><td>Segment</td><td> $</td><td> Segment</td></tr><tr><td></td><td colspan="6"> (In millions, except percentages)</td></tr><tr><td>North America</td><td>388</td><td>38%</td><td>311</td><td>34%</td><td>339</td><td>38%</td></tr><tr><td>Europe/Africa</td><td>517</td><td>50%</td><td>500</td><td>55%</td><td>465</td><td>53%</td></tr><tr><td>Asia/Australia</td><td>88</td><td>8%</td><td>55</td><td>6%</td><td>44</td><td>5%</td></tr><tr><td>Rest of World</td><td>37</td><td>4%</td><td>49</td><td>5%</td><td>39</td><td>4%</td></tr></table>
Advanced Engineered Materials’ sales in the Asian market are made mainly through its ventures, Polyplastics, KEPCO and Fortron Industries, which are accounted for under the equity method and therefore not included in Advanced Engineered Materials’ consolidated net sales. If Advanced Engineered Materials’ portion of the sales made by these ventures were included in the chart above, the percentage of sales sold in Asia/Australia would be substantially higher. A number of Advanced Engineered Materials’ POM customers, particularly in the appliance, estimated at reporting dates prior to that time. The compensation expense recognized each period should be based on the most recent estimated value. The Company’s recording of compensation expenses prior to fiscal 2006 for these grants were an estimate based on grant date fair value. Fiscal 2006 includes the effect of the change for that year. The effect on years prior to fiscal 2006 was not material. Further, in accordance with EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” the Company classifies these non-employee awards as liabilities at fair value upon vesting, with changes in fair value reported in earnings until these awards are exercised or forfeited. The Company’s net income for the years ended September 30, 2007, September 30, 2006, and September 30, 2005 includes $7.0 million, $9.7 million, and $2.1 million, respectively, of compensation costs and $2.7 million, $3.7 million, and $804,000, respectively, net of income tax benefits related to option grants to its independent contractor Financial Advisors. The fair value of each fixed option grant awarded to an independent contractor Financial Advisor is estimated on the date of grant and periodically revalued using the Black-Scholes option pricing model with the following weighted average assumptions used for fiscal years ended 2007, 2006, and 2005:
<table><tr><td></td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td>Dividend Yield</td><td>1.27%</td><td>1.11%</td><td>1.10%</td></tr><tr><td>Expected Volatility</td><td>29.65%</td><td>30.89%</td><td>38.20%</td></tr><tr><td>Risk-free Interest Rate</td><td>4.70%</td><td>4.62%</td><td>3.37%</td></tr><tr><td>Expected Lives</td><td>2.92 yrs</td><td>2.76 yrs</td><td>2.56 yrs</td></tr></table>
The dividend yield assumption is based on the Company’s current declared dividend as a percentage of the stock price. The expected volatility assumption for the current period and fiscal 2006 is based on the Company’s historical stock price and is a weighted average combining (1) the volatility of the most recent year, (2) the volatility of the most recent time period equal to the expected lives assumption, and (3) the annualized volatility of the price of the Company’s stock since the late 1980’s. The expected volatility used by the Company in fiscal 2005 was based on the annualized volatility of the price of the Company’s stock since the late 1980’s. The risk-free interest rate assumption is based on the U. S. Treasury yield curve in effect at each point in time the options are valued. The expected lives assumption is based on the difference between the option’s vesting date plus 90 days (the average exercise period) and the date of the current reporting period. A summary of option activity of the Company's fixed stock option plans under which awards are granted to its independent contractor Financial Advisors for the year ended September 30, 2007 is presented below:
<table><tr><td></td><td>Options For Shares</td><td>Weighted Average Exercise Price ($)</td><td>Weighted Average Remaining Contractual Term (Years)</td><td>Aggregate Intrinsic Value ($)</td></tr><tr><td>Outstanding at</td><td></td><td></td><td></td><td></td></tr><tr><td>October 1, 2006</td><td>1,687,325</td><td>$ 16.64</td><td>-</td><td>-</td></tr><tr><td>Granted</td><td>327,200</td><td>31.78</td><td>-</td><td>-</td></tr><tr><td>Exercised</td><td>-383,728</td><td>15.27</td><td>-</td><td>-</td></tr><tr><td>Canceled</td><td>-58,568</td><td>17.73</td><td>-</td><td>-</td></tr><tr><td>Expired</td><td>-4,263</td><td>19.62</td><td>-</td><td>-</td></tr><tr><td>Outstanding at</td><td></td><td></td><td></td><td></td></tr><tr><td>September 30, 2007</td><td>1,567,966</td><td>$ 20.25</td><td>3.17</td><td>$ 19,761,733</td></tr><tr><td>Exercisable at</td><td></td><td></td><td></td><td></td></tr><tr><td>September 30, 2007</td><td>107,675</td><td>$ 13.54</td><td>0.71</td><td>$ 2,078,723</td></tr></table>
As of September 30, 2007, there was $7.7 million of total unrecognized compensation cost related to unvested stock options granted to its independent contractor Financial Advisors based on estimated fair value at that date. These costs are expected to be recognized over a weighted average period of approximately 2.3 years. The weighted average grant date fair value of stock options granted under these plans during the years ended September 30, 2007, September 30, 2006 and September 30, 2005 was $9.70 per share, $11.87 per share and $9.51 per share, respectively. The total intrinsic value of stock options exercised for these plans during the years ended September 30, 2007, September 30, 2006 and September 30, 2005 was $6.1 million, $5.6 million and $2.7 million, respectively. The total estimated fair value of stock options vested for these plans during the years ended September 30, 2007, September 30, 2006 and September 30, 2005 was $6.2 million, $4.1 million and $3.5 million, respectively. Cash received from stock option exercises for these plans for the year ended September 30, 2007 was $5.9 million. There were no actual tax benefits realized for the tax deductions from option exercise of awards to its independent contractor Financial Advisors for the year ended September 30, 2007. |
4.57353 | what was the ratio of the decreases in the net sales to the operating profit for mst from 2010 to 2011 | ITEM 6. SELECTED FINANCIAL DATA The Coca-Cola Company and Subsidiaries
<table><tr><td> </td><td colspan="2">Compound Growth Rates </td><td colspan="2">Year Ended December 31,</td></tr><tr><td>(In millions except per share data, ratios and growth rates) </td><td>5 Years </td><td>10 Years </td><td>2003 2</td><td>2002 3,4</td></tr><tr><td> SUMMARY OF OPERATIONS</td><td></td><td></td><td></td><td></td></tr><tr><td>Net operating revenues</td><td>5.2 %</td><td>5.3%</td><td>$ 21,044</td><td>$ 19,564</td></tr><tr><td>Cost of goods sold</td><td>6.9 %</td><td>4.2%</td><td>7,762</td><td>7,105</td></tr><tr><td>Gross profit</td><td>4.3 %</td><td>6.1%</td><td>13,282</td><td>12,459</td></tr><tr><td>Selling, general and administrative expenses</td><td>5.6 %</td><td>5.9%</td><td>7,488</td><td>7,001</td></tr><tr><td>Other operating charges</td><td></td><td></td><td>573</td><td>—</td></tr><tr><td>Operating income</td><td>1.0 %</td><td>5.4%</td><td>5,221</td><td>5,458</td></tr><tr><td>Interest income</td><td></td><td></td><td>176</td><td>209</td></tr><tr><td>Interest expense</td><td></td><td></td><td>178</td><td>199</td></tr><tr><td>Equity income (loss)—net</td><td></td><td></td><td>406</td><td>384</td></tr><tr><td>Other income (loss)—net</td><td></td><td></td><td>-138</td><td>-353</td></tr><tr><td>Gains on issuances of stock by equity investees</td><td></td><td></td><td>8</td><td>—</td></tr><tr><td>Income before income taxes and changes in accounting principles</td><td>1.1 %</td><td>5.6%</td><td>5,495</td><td>5,499</td></tr><tr><td>Income taxes</td><td>-7.2%</td><td>1.4%</td><td>1,148</td><td>1,523</td></tr><tr><td>Net income before changes in accounting principles</td><td>4.2 %</td><td>7.1%</td><td>$ 4,347</td><td>$ 3,976</td></tr><tr><td>Net income</td><td>4.2 %</td><td>7.2%</td><td>$ 4,347</td><td>$ 3,050</td></tr><tr><td>Average shares outstanding</td><td></td><td></td><td>2,459</td><td>2,478</td></tr><tr><td>Average shares outstanding assuming dilution</td><td></td><td></td><td>2,462</td><td>2,483</td></tr><tr><td> PER SHARE DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Income before changes in accounting principles—basic</td><td>4.4 %</td><td>7.7%</td><td>$ 1.77</td><td>$ 1.60</td></tr><tr><td>Income before changes in accounting principles—diluted</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.60</td></tr><tr><td>Basic net income</td><td>4.4 %</td><td>7.7%</td><td>1.77</td><td>1.23</td></tr><tr><td>Diluted net income</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.23</td></tr><tr><td>Cash dividends</td><td>8.0 %</td><td>10.0%</td><td>0.88</td><td>0.80</td></tr><tr><td>Market price on December 31,</td><td>-5.4%</td><td>8.6%</td><td>50.75</td><td>43.84</td></tr><tr><td> TOTAL MARKET VALUE OF COMMON STOCK<sup>1</sup></td><td>-5.6%</td><td>7.9%</td><td>$ 123,908</td><td>$ 108,328</td></tr><tr><td> BALANCE SHEET AND OTHER DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Cash, cash equivalents and current marketable securities</td><td></td><td></td><td>$ 3,482</td><td>$ 2,345</td></tr><tr><td>Property, plant and equipment—net</td><td></td><td></td><td>6,097</td><td>5,911</td></tr><tr><td>Depreciation</td><td></td><td></td><td>667</td><td>614</td></tr><tr><td>Capital expenditures</td><td></td><td></td><td>812</td><td>851</td></tr><tr><td>Total assets</td><td></td><td></td><td>27,342</td><td>24,406</td></tr><tr><td>Long-term debt</td><td></td><td></td><td>2,517</td><td>2,701</td></tr><tr><td>Total debt</td><td></td><td></td><td>5,423</td><td>5,356</td></tr><tr><td>Share-owners' equity</td><td></td><td></td><td>14,090</td><td>11,800</td></tr><tr><td>Total capital<sup>1</sup></td><td></td><td></td><td>19,513</td><td>17,156</td></tr><tr><td> OTHER KEY FINANCIAL MEASURES<sup>1</sup></td><td></td><td></td><td></td><td></td></tr><tr><td>Total debt-to-total capital</td><td></td><td></td><td>27.8%</td><td>31.2%</td></tr><tr><td>Net debt-to-net capital</td><td></td><td></td><td>12.1%</td><td>20.3%</td></tr><tr><td>Return on common equity</td><td></td><td></td><td>33.6%</td><td>34.3%</td></tr><tr><td>Return on capital</td><td></td><td></td><td>24.5%</td><td>24.5%</td></tr><tr><td>Dividend payout ratio</td><td></td><td></td><td>49.8%</td><td>65.1%</td></tr><tr><td>Net cash provided by operations</td><td></td><td></td><td>$ 5,456</td><td>$ 4,742</td></tr></table>
1 Refer to Glossary on pages 103 and 104.2 In 2003, we adopted SFAS No.146, ‘‘Accounting for Costs Associated with Exit or Disposal Activities. ’’ 3 In 2002, we adopted SFAS No.142, ‘‘Goodwill and Other Intangible Assets. ’’ 4 In 2002, we adopted the fair value method provisions of SFAS No.123, ‘‘Accounting for Stock-Based Compensation,’’ and we adopted SFAS No.148, ‘‘Accounting for Stock-Based Compensation—Transition and Disclosure. ’’ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Coca-Cola Company and Subsidiaries NOTE 12: NET CHANGE IN OPERATING ASSETS AND LIABILITIES Net cash provided by operating activities attributable to the net change in operating assets and liabilities is composed of the following (in millions):
<table><tr><td></td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td>Decrease (increase) in trade accounts receivable</td><td>$ 80</td><td>$ -83</td><td>$ -73</td></tr><tr><td>Decrease (increase) in inventories</td><td>111</td><td>-49</td><td>-17</td></tr><tr><td>Decrease (increase) in prepaid expenses and other assets</td><td>-276</td><td>74</td><td>-349</td></tr><tr><td>Decrease in accounts payable and accrued expenses</td><td>-164</td><td>-442</td><td>-179</td></tr><tr><td>Increase in accrued taxes</td><td>53</td><td>20</td><td>247</td></tr><tr><td>Increase (decrease) in other liabilities</td><td>28</td><td>73</td><td>-91</td></tr><tr><td></td><td>$ -168</td><td>$ -407</td><td>$ -462</td></tr></table>
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS Prior to 2002, our Company accounted for our stock option plans and restricted stock plans under the recognition and measurement provisions of APB No.25 and related interpretations. Effective January 1, 2002, our Company adopted the preferable fair value recognition provisions of SFAS No.123. Our Company selected the modified prospective method of adoption described in SFAS No.148. Compensation cost recognized in 2002 was the same as that which would have been recognized had the fair value method of SFAS No.123 been applied from its original effective date. Refer to Note 1. In accordance with the provisions of SFAS No.123 and SFAS No.148, $422 million and $365 million, respectively, were recorded for total stock-based compensation expense in 2003 and 2002. Of the $422 million recorded in 2003, $407 million was recorded in selling, general and administrative expenses and $15 million was recorded in other operating charges (refer to Note 17). In accordance with APB No.25, total stock-based compensation expense was $41 million for the year ended December 31, 2001. Stock Option Plans Under our 1991 Stock Option Plan (the ‘‘1991 Option Plan’’), a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options and stock appreciation rights granted under the 1991 Option Plan. The stock appreciation rights permit the holder, upon surrendering all or part of the related stock option, to receive cash, common stock or a combination thereof, in an amount up to 100 percent of the difference between the market price and the option price. Options to purchase common stock under the 1991 Option Plan have been granted to Company employees at fair market value at the date of grant. The 1999 Stock Option Plan (the ‘‘1999 Option Plan’’) was approved by share owners in April of 1999. Following the approval of the 1999 Option Plan, no grants were made from the 1991 Option Plan, and shares available under the 1991 Option Plan were no longer available to be granted. Under the 1999 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 1999 Option Plan. Options to purchase common stock under the 1999 Option Plan have been granted to Company employees at fair market value at the date of grant. The 2002 Stock Option Plan (the ‘‘2002 Option Plan’’) was approved by share owners in April of 2002. Under the 2002 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 2002 Option Plan. 2011 compared to 2010 MST’s net sales for 2011 decreased $311 million, or 4%, compared to 2010. The decrease was attributable to decreased volume of approximately $390 million for certain ship and aviation system programs (primarily Maritime Patrol Aircraft and PTDS) and approximately $75 million for training and logistics solutions programs. Partially offsetting these decreases was higher sales of about $165 million from production on the LCS program. MST’s operating profit for 2011 decreased $68 million, or 10%, compared to 2010. The decrease was attributable to decreased operating profit of approximately $55 million as a result of increased reserves for contract cost matters on various ship and aviation system programs (including the terminated presidential helicopter program) and approximately $40 million due to lower volume and increased reserves on training and logistics solutions. Partially offsetting these decreases was higher operating profit of approximately $30 million in 2011 primarily due to the recognition of reserves on certain undersea systems programs in 2010. Adjustments not related to volume, including net profit rate adjustments described above, were approximately $55 million lower in 2011 compared to 2010. Backlog Backlog increased in 2012 compared to 2011 mainly due to increased orders on ship and aviation system programs (primarily MH-60 and LCS), partially offset decreased orders and higher sales volume on integrated warfare systems and sensors programs (primarily Aegis). Backlog decreased slightly in 2011 compared to 2010 primarily due to higher sales volume on various integrated warfare systems and sensors programs. Trends We expect MST’s net sales to decline in 2013 in the low single digit percentage range as compared to 2012 due to the completion of PTDS deliveries in 2012 and expected lower volume on training services programs. Operating profit and margin are expected to increase slightly from 2012 levels primarily due to anticipated improved contract performance. Space Systems Our Space Systems business segment is engaged in the research and development, design, engineering, and production of satellites, strategic and defensive missile systems, and space transportation systems. Space Systems is also responsible for various classified systems and services in support of vital national security systems. Space Systems’ major programs include the Space-Based Infrared System (SBIRS), Advanced Extremely High Frequency (AEHF) system, Mobile User Objective System (MUOS), Global Positioning Satellite (GPS) III system, Geostationary Operational Environmental Satellite R-Series (GOES-R), Trident II D5 Fleet Ballistic Missile, and Orion. Operating results for our Space Systems business segment include our equity interests in United Launch Alliance (ULA), which provides expendable launch services for the U. S. Government, United Space Alliance (USA), which provided processing activities for the Space Shuttle program and is winding down following the completion of the last Space Shuttle mission in 2011, and a joint venture that manages the U. K. ’s Atomic Weapons Establishment program. Space Systems’ operating results included the following (in millions):
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Net sales</td><td>$8,347</td><td>$8,161</td><td>$8,268</td></tr><tr><td>Operating profit</td><td>1,083</td><td>1,063</td><td>1,030</td></tr><tr><td>Operating margins</td><td>13.0%</td><td>13.0%</td><td>12.5%</td></tr><tr><td>Backlog at year-end</td><td>18,100</td><td>16,000</td><td>17,800</td></tr></table>
2012 compared to 2011 Space Systems’ net sales for 2012 increased $186 million, or 2%, compared to 2011. The increase was attributable to higher net sales of approximately $150 million due to increased commercial satellite deliveries (two commercial satellites delivered in 2012 compared to one during 2011); about $125 million from the Orion program due to higher volume and an increase in risk retirements; and approximately $70 million from increased volume on various strategic and defensive missile programs. Partially offsetting the increases were lower net sales of approximately $105 million from certain government satellite programs (primarily SBIRS and MUOS) as a result of decreased volume and a decline in risk retirements; and about $55 million from the NASA External Tank program, which ended in connection with the completion of the Space Shuttle program in 2011. |
4,133 | What's the sum of Operating profit of 2012, and Net income of Year Ended December 31, 2002 3,4 is ? | ITEM 6. SELECTED FINANCIAL DATA The Coca-Cola Company and Subsidiaries
<table><tr><td> </td><td colspan="2">Compound Growth Rates </td><td colspan="2">Year Ended December 31,</td></tr><tr><td>(In millions except per share data, ratios and growth rates) </td><td>5 Years </td><td>10 Years </td><td>2003 2</td><td>2002 3,4</td></tr><tr><td> SUMMARY OF OPERATIONS</td><td></td><td></td><td></td><td></td></tr><tr><td>Net operating revenues</td><td>5.2 %</td><td>5.3%</td><td>$ 21,044</td><td>$ 19,564</td></tr><tr><td>Cost of goods sold</td><td>6.9 %</td><td>4.2%</td><td>7,762</td><td>7,105</td></tr><tr><td>Gross profit</td><td>4.3 %</td><td>6.1%</td><td>13,282</td><td>12,459</td></tr><tr><td>Selling, general and administrative expenses</td><td>5.6 %</td><td>5.9%</td><td>7,488</td><td>7,001</td></tr><tr><td>Other operating charges</td><td></td><td></td><td>573</td><td>—</td></tr><tr><td>Operating income</td><td>1.0 %</td><td>5.4%</td><td>5,221</td><td>5,458</td></tr><tr><td>Interest income</td><td></td><td></td><td>176</td><td>209</td></tr><tr><td>Interest expense</td><td></td><td></td><td>178</td><td>199</td></tr><tr><td>Equity income (loss)—net</td><td></td><td></td><td>406</td><td>384</td></tr><tr><td>Other income (loss)—net</td><td></td><td></td><td>-138</td><td>-353</td></tr><tr><td>Gains on issuances of stock by equity investees</td><td></td><td></td><td>8</td><td>—</td></tr><tr><td>Income before income taxes and changes in accounting principles</td><td>1.1 %</td><td>5.6%</td><td>5,495</td><td>5,499</td></tr><tr><td>Income taxes</td><td>-7.2%</td><td>1.4%</td><td>1,148</td><td>1,523</td></tr><tr><td>Net income before changes in accounting principles</td><td>4.2 %</td><td>7.1%</td><td>$ 4,347</td><td>$ 3,976</td></tr><tr><td>Net income</td><td>4.2 %</td><td>7.2%</td><td>$ 4,347</td><td>$ 3,050</td></tr><tr><td>Average shares outstanding</td><td></td><td></td><td>2,459</td><td>2,478</td></tr><tr><td>Average shares outstanding assuming dilution</td><td></td><td></td><td>2,462</td><td>2,483</td></tr><tr><td> PER SHARE DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Income before changes in accounting principles—basic</td><td>4.4 %</td><td>7.7%</td><td>$ 1.77</td><td>$ 1.60</td></tr><tr><td>Income before changes in accounting principles—diluted</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.60</td></tr><tr><td>Basic net income</td><td>4.4 %</td><td>7.7%</td><td>1.77</td><td>1.23</td></tr><tr><td>Diluted net income</td><td>4.5 %</td><td>7.9%</td><td>1.77</td><td>1.23</td></tr><tr><td>Cash dividends</td><td>8.0 %</td><td>10.0%</td><td>0.88</td><td>0.80</td></tr><tr><td>Market price on December 31,</td><td>-5.4%</td><td>8.6%</td><td>50.75</td><td>43.84</td></tr><tr><td> TOTAL MARKET VALUE OF COMMON STOCK<sup>1</sup></td><td>-5.6%</td><td>7.9%</td><td>$ 123,908</td><td>$ 108,328</td></tr><tr><td> BALANCE SHEET AND OTHER DATA</td><td></td><td></td><td></td><td></td></tr><tr><td>Cash, cash equivalents and current marketable securities</td><td></td><td></td><td>$ 3,482</td><td>$ 2,345</td></tr><tr><td>Property, plant and equipment—net</td><td></td><td></td><td>6,097</td><td>5,911</td></tr><tr><td>Depreciation</td><td></td><td></td><td>667</td><td>614</td></tr><tr><td>Capital expenditures</td><td></td><td></td><td>812</td><td>851</td></tr><tr><td>Total assets</td><td></td><td></td><td>27,342</td><td>24,406</td></tr><tr><td>Long-term debt</td><td></td><td></td><td>2,517</td><td>2,701</td></tr><tr><td>Total debt</td><td></td><td></td><td>5,423</td><td>5,356</td></tr><tr><td>Share-owners' equity</td><td></td><td></td><td>14,090</td><td>11,800</td></tr><tr><td>Total capital<sup>1</sup></td><td></td><td></td><td>19,513</td><td>17,156</td></tr><tr><td> OTHER KEY FINANCIAL MEASURES<sup>1</sup></td><td></td><td></td><td></td><td></td></tr><tr><td>Total debt-to-total capital</td><td></td><td></td><td>27.8%</td><td>31.2%</td></tr><tr><td>Net debt-to-net capital</td><td></td><td></td><td>12.1%</td><td>20.3%</td></tr><tr><td>Return on common equity</td><td></td><td></td><td>33.6%</td><td>34.3%</td></tr><tr><td>Return on capital</td><td></td><td></td><td>24.5%</td><td>24.5%</td></tr><tr><td>Dividend payout ratio</td><td></td><td></td><td>49.8%</td><td>65.1%</td></tr><tr><td>Net cash provided by operations</td><td></td><td></td><td>$ 5,456</td><td>$ 4,742</td></tr></table>
1 Refer to Glossary on pages 103 and 104.2 In 2003, we adopted SFAS No.146, ‘‘Accounting for Costs Associated with Exit or Disposal Activities. ’’ 3 In 2002, we adopted SFAS No.142, ‘‘Goodwill and Other Intangible Assets. ’’ 4 In 2002, we adopted the fair value method provisions of SFAS No.123, ‘‘Accounting for Stock-Based Compensation,’’ and we adopted SFAS No.148, ‘‘Accounting for Stock-Based Compensation—Transition and Disclosure. ’’ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Coca-Cola Company and Subsidiaries NOTE 12: NET CHANGE IN OPERATING ASSETS AND LIABILITIES Net cash provided by operating activities attributable to the net change in operating assets and liabilities is composed of the following (in millions):
<table><tr><td></td><td>2003</td><td>2002</td><td>2001</td></tr><tr><td>Decrease (increase) in trade accounts receivable</td><td>$ 80</td><td>$ -83</td><td>$ -73</td></tr><tr><td>Decrease (increase) in inventories</td><td>111</td><td>-49</td><td>-17</td></tr><tr><td>Decrease (increase) in prepaid expenses and other assets</td><td>-276</td><td>74</td><td>-349</td></tr><tr><td>Decrease in accounts payable and accrued expenses</td><td>-164</td><td>-442</td><td>-179</td></tr><tr><td>Increase in accrued taxes</td><td>53</td><td>20</td><td>247</td></tr><tr><td>Increase (decrease) in other liabilities</td><td>28</td><td>73</td><td>-91</td></tr><tr><td></td><td>$ -168</td><td>$ -407</td><td>$ -462</td></tr></table>
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS Prior to 2002, our Company accounted for our stock option plans and restricted stock plans under the recognition and measurement provisions of APB No.25 and related interpretations. Effective January 1, 2002, our Company adopted the preferable fair value recognition provisions of SFAS No.123. Our Company selected the modified prospective method of adoption described in SFAS No.148. Compensation cost recognized in 2002 was the same as that which would have been recognized had the fair value method of SFAS No.123 been applied from its original effective date. Refer to Note 1. In accordance with the provisions of SFAS No.123 and SFAS No.148, $422 million and $365 million, respectively, were recorded for total stock-based compensation expense in 2003 and 2002. Of the $422 million recorded in 2003, $407 million was recorded in selling, general and administrative expenses and $15 million was recorded in other operating charges (refer to Note 17). In accordance with APB No.25, total stock-based compensation expense was $41 million for the year ended December 31, 2001. Stock Option Plans Under our 1991 Stock Option Plan (the ‘‘1991 Option Plan’’), a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options and stock appreciation rights granted under the 1991 Option Plan. The stock appreciation rights permit the holder, upon surrendering all or part of the related stock option, to receive cash, common stock or a combination thereof, in an amount up to 100 percent of the difference between the market price and the option price. Options to purchase common stock under the 1991 Option Plan have been granted to Company employees at fair market value at the date of grant. The 1999 Stock Option Plan (the ‘‘1999 Option Plan’’) was approved by share owners in April of 1999. Following the approval of the 1999 Option Plan, no grants were made from the 1991 Option Plan, and shares available under the 1991 Option Plan were no longer available to be granted. Under the 1999 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 1999 Option Plan. Options to purchase common stock under the 1999 Option Plan have been granted to Company employees at fair market value at the date of grant. The 2002 Stock Option Plan (the ‘‘2002 Option Plan’’) was approved by share owners in April of 2002. Under the 2002 Option Plan, a maximum of 120 million shares of our common stock was approved to be issued or transferred to certain officers and employees pursuant to stock options granted under the 2002 Option Plan. 2011 compared to 2010 MST’s net sales for 2011 decreased $311 million, or 4%, compared to 2010. The decrease was attributable to decreased volume of approximately $390 million for certain ship and aviation system programs (primarily Maritime Patrol Aircraft and PTDS) and approximately $75 million for training and logistics solutions programs. Partially offsetting these decreases was higher sales of about $165 million from production on the LCS program. MST’s operating profit for 2011 decreased $68 million, or 10%, compared to 2010. The decrease was attributable to decreased operating profit of approximately $55 million as a result of increased reserves for contract cost matters on various ship and aviation system programs (including the terminated presidential helicopter program) and approximately $40 million due to lower volume and increased reserves on training and logistics solutions. Partially offsetting these decreases was higher operating profit of approximately $30 million in 2011 primarily due to the recognition of reserves on certain undersea systems programs in 2010. Adjustments not related to volume, including net profit rate adjustments described above, were approximately $55 million lower in 2011 compared to 2010. Backlog Backlog increased in 2012 compared to 2011 mainly due to increased orders on ship and aviation system programs (primarily MH-60 and LCS), partially offset decreased orders and higher sales volume on integrated warfare systems and sensors programs (primarily Aegis). Backlog decreased slightly in 2011 compared to 2010 primarily due to higher sales volume on various integrated warfare systems and sensors programs. Trends We expect MST’s net sales to decline in 2013 in the low single digit percentage range as compared to 2012 due to the completion of PTDS deliveries in 2012 and expected lower volume on training services programs. Operating profit and margin are expected to increase slightly from 2012 levels primarily due to anticipated improved contract performance. Space Systems Our Space Systems business segment is engaged in the research and development, design, engineering, and production of satellites, strategic and defensive missile systems, and space transportation systems. Space Systems is also responsible for various classified systems and services in support of vital national security systems. Space Systems’ major programs include the Space-Based Infrared System (SBIRS), Advanced Extremely High Frequency (AEHF) system, Mobile User Objective System (MUOS), Global Positioning Satellite (GPS) III system, Geostationary Operational Environmental Satellite R-Series (GOES-R), Trident II D5 Fleet Ballistic Missile, and Orion. Operating results for our Space Systems business segment include our equity interests in United Launch Alliance (ULA), which provides expendable launch services for the U. S. Government, United Space Alliance (USA), which provided processing activities for the Space Shuttle program and is winding down following the completion of the last Space Shuttle mission in 2011, and a joint venture that manages the U. K. ’s Atomic Weapons Establishment program. Space Systems’ operating results included the following (in millions):
<table><tr><td></td><td>2012</td><td>2011</td><td>2010</td></tr><tr><td>Net sales</td><td>$8,347</td><td>$8,161</td><td>$8,268</td></tr><tr><td>Operating profit</td><td>1,083</td><td>1,063</td><td>1,030</td></tr><tr><td>Operating margins</td><td>13.0%</td><td>13.0%</td><td>12.5%</td></tr><tr><td>Backlog at year-end</td><td>18,100</td><td>16,000</td><td>17,800</td></tr></table>
2012 compared to 2011 Space Systems’ net sales for 2012 increased $186 million, or 2%, compared to 2011. The increase was attributable to higher net sales of approximately $150 million due to increased commercial satellite deliveries (two commercial satellites delivered in 2012 compared to one during 2011); about $125 million from the Orion program due to higher volume and an increase in risk retirements; and approximately $70 million from increased volume on various strategic and defensive missile programs. Partially offsetting the increases were lower net sales of approximately $105 million from certain government satellite programs (primarily SBIRS and MUOS) as a result of decreased volume and a decline in risk retirements; and about $55 million from the NASA External Tank program, which ended in connection with the completion of the Space Shuttle program in 2011. |
-0.09542 | how much did the company 2019s valuation allowance decrease from 2011 to 2012? | The following table summarizes the changes in the Company’s valuation allowance:
<table><tr><td>Balance at January 1, 2010</td><td>$25,621</td></tr><tr><td>Increases in current period tax positions</td><td>907</td></tr><tr><td>Decreases in current period tax positions</td><td>-2,740</td></tr><tr><td>Balance at December 31, 2010</td><td>$23,788</td></tr><tr><td>Increases in current period tax positions</td><td>1,525</td></tr><tr><td>Decreases in current period tax positions</td><td>-3,734</td></tr><tr><td>Balance at December 31, 2011</td><td>$21,579</td></tr><tr><td>Increases in current period tax positions</td><td>0</td></tr><tr><td>Decreases in current period tax positions</td><td>-2,059</td></tr><tr><td>Balance at December 31, 2012</td><td>$19,520</td></tr></table>
Note 14: Employee Benefits Pension and Other Postretirement Benefits The Company maintains noncontributory defined benefit pension plans covering eligible employees of its regulated utility and shared services operations. Benefits under the plans are based on the employee’s years of service and compensation. The pension plans have been closed for most employees hired on or after January 1, 2006. Union employees hired on or after January 1, 2001 had their accrued benefit frozen and will be able to receive this benefit as a lump sum upon termination or retirement. Union employees hired on or after January 1, 2001 and non-union employees hired on or after January 1, 2006 are provided with a 5.25% of base pay defined contribution plan. The Company does not participate in a multiemployer plan. The Company’s funding policy is to contribute at least the greater of the minimum amount required by the Employee Retirement Income Security Act of 1974 or the normal cost, and an additional contribution if needed to avoid “at risk” status and benefit restrictions under the Pension Protection Act of 2006. The Company may also increase its contributions, if appropriate, to its tax and cash position and the plan’s funded position. Pension plan assets are invested in a number of actively managed and indexed investments including equity and bond mutual funds, fixed income securities and guaranteed interest contracts with insurance companies. Pension expense in excess of the amount contributed to the pension plans is deferred by certain regulated subsidiaries pending future recovery in rates charged for utility services as contributions are made to the plans. (See Note 6) The Company also has several unfunded noncontributory supplemental non-qualified pension plans that provide additional retirement benefits to certain employees. The Company maintains other postretirement benefit plans providing varying levels of medical and life insurance to eligible retirees. The retiree welfare plans are closed for union employees hired on or after January 1, 2006. The plans had previously closed for non-union employees hired on or after January 1, 2002. The Company’s policy is to fund other postretirement benefit costs for rate-making purposes. Plan assets are invested in equity and bond mutual funds, fixed income securities, real estate investment trusts (“REITs”) and emerging market funds. The obligations of the plans are dominated by obligations for active employees. Because the timing of expected benefit payments is so far in the future and the size of the plan assets are small relative to the Company’s assets, the investment strategy is to allocate a significant percentage of assets to equities, which the Company believes will provide the highest return over the long-term period. The fixed income assets are invested in long duration debt securities and may be invested in fixed income instruments, such as futures and options in order to better match the duration of the plan liability. The allocation of goodwill in accordance with SFAS No.142 for the years ended December 31, 2006 and 2005 was as follows:
<table><tr><td> </td><td> Balance at Beginning of Period</td><td> Goodwill Acquired</td><td> Foreign Currency Translation and Other</td><td> Balance at End of Period</td></tr><tr><td>Year Ended December 31, 2006</td><td></td><td></td><td></td><td></td></tr><tr><td>Food Packaging</td><td>$540.4</td><td>$31.9</td><td>$14.9</td><td>$587.2</td></tr><tr><td>Protective Packaging</td><td>1,368.4</td><td>0.4</td><td>1.1</td><td>1,369.9</td></tr><tr><td>Total</td><td>$1,908.8</td><td>$32.3</td><td>$16.0</td><td>$1,957.1</td></tr><tr><td>Year Ended December 31, 2005</td><td></td><td></td><td></td><td></td></tr><tr><td>Food Packaging</td><td>$549.8</td><td>$0.7</td><td>$-10.1</td><td>$540.4</td></tr><tr><td>Protective Packaging</td><td>1,368.2</td><td>0.8</td><td>-0.6</td><td>1,368.4</td></tr><tr><td>Total</td><td>$1,918.0</td><td>$1.5</td><td>$-10.7</td><td>$1,908.8</td></tr></table>
See Note 20, “Acquisitions,” for additional information on the goodwill acquired during 2006. Note 4 Short Term Investments—Available-for-Sale Securities At December 31, 2006 and 2005, the Company’s available-for-sale securities consisted of auction rate securities for which interest or dividend rates are generally re-set for periods of up to 90 days. At December 31, 2006, the Company held $33.9 million of auction rate securities which were investments in preferred stock with no maturity dates. At December 31, 2005, the Company held $44.1 million of auction rate securities, of which $34.7 million were investments in preferred stock with no maturity dates and $9.4 million were investments in other auction rate securities with contractual maturities in 2031. At December 31, 2006 and 2005, the fair value of the available-for-sale securities held by the Company was equal to their cost. There were no gross realized gains or losses from the sale of availablefor-sale securities in 2006 and 2005. Note 5 Accounts Receivable Securitization Program In December 2001, the Company and a group of its U. S. subsidiaries entered into an accounts receivable securitization program with a bank and an issuer of commercial paper administered by the bank. On December 7, 2004, which was the scheduled expiration date of this program, the parties extended this program for an additional term of three years ending December 7, 2007. Under this receivables program, the Company’s two primary operating subsidiaries, Cryovac, Inc. and Sealed Air Corporation (US), sell all of their eligible U. S. accounts receivable to Sealed Air Funding Corporation, an indirectly wholly-owned subsidiary of the Company that was formed for the sole purpose of entering into the receivables program. Sealed Air Funding in turn may sell undivided ownership interests in these receivables to the bank and the issuer of commercial paper, subject to specified conditions, up to a maximum of $125.0 million of receivables interests outstanding from time to time. Sealed Air Funding retains the receivables it purchases from the operating subsidiaries, except those as to which it sells receivables interests to the bank or the issuer of commercial paper. The Company has structured the sales of accounts receivable by the operating subsidiaries to Sealed Air Funding, and the sales of receivables interests from Sealed Air Funding to the bank and the issuer of commercial paper, as “true sales” under applicable laws. The assets of Sealed Air Funding are not available to pay any creditors of the Company or of the Company’s other subsidiaries or affiliates. The Company accounts for these transactions as sales of receivables under the provisions of SFAS No.140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. ” Product Care 2016 compared with 2015 As reported, net sales decreased $30 million, or 2%, in 2016 compared with 2015, of which $22 million was due to negative currency impact. On a constant dollar basis, net sales decreased $8 million, or 1%, in 2016 compared with 2015 primarily due to the following: ? unfavorable price/mix of $29 million primarily in North America driven by targeted pricing incentives and an unfavorable product mix related to accelerated growth in e-Commerce and a shift in demand due to more innovative, resource-efficient solutions. This was partially offset by: ? higher unit volumes of $21 million, primarily in North America and EMEA due to ongoing strength in the e-Commerce and third party logistics markets, partially offset by rationalization and weakness in the industrial sector, as well as declines in Latin America due to the political and economic environment.2015 compared with 2014 As reported, net sales decreased $109 million, or 7%, in 2015 compared with 2014, of which $99 million was due to negative currency impact. On a constant dollar basis, net sales decreased $10 million, or 1%, in 2015 compared with 2014 primarily due to the following: ? lower unit volumes due to rationalization efforts in North America, Latin America and to a lesser extent, EMEA and weaknesses across the industrial sector. This was partially offset by: ? favorable price/mix in all regions, primarily in North America and Latin America reflecting results from our focus on maintaining pricing disciplines and an increase of sales from high-performance packaging solutions, including cushioning and packaging systems as compared to sales from general packaging solutions, and the progression of our pricing and value initiatives implemented to offset non-material inflationary costs as well as currency devaluation. Cost of Sales Cost of sales for the years ended December 31, were as follows:
<table><tr><td></td><td colspan="3">Year Ended December 31,</td><td rowspan="2">2016 vs. 2015 % Change</td><td rowspan="2">2015 vs. 2014 % Change</td></tr><tr><td>(In millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Net sales</td><td>$6,778.3</td><td>$7,031.5</td><td>$7,750.5</td><td>-3.6%</td><td>-9.3%</td></tr><tr><td>Cost of sales</td><td>4,246.7</td><td>4,444.9</td><td>5,062.9</td><td>-4.5%</td><td>-12.2%</td></tr><tr><td>As a % of net sales</td><td>62.7%</td><td>63.2%</td><td>65.3%</td><td></td><td></td></tr><tr><td>Gross Profit</td><td>$2,531.6</td><td>$2,586.6</td><td>$2,687.6</td><td>-2.1%</td><td>-3.8%</td></tr></table>
2016 compared with 2015 As reported, costs of sales decreased $198 million in 2016 as compared to 2015. Cost of sales was impacted by favorable foreign currency translation of $163 million. On a constant dollar basis, cost of sales decreased $35 million primarily due to the divestiture of the North American foam trays and absorbent pads business and European food trays business of $79 million, offset by an increase of $51 million in expenses representing higher non-material manufacturing and direct costs, including salary and wage inflation, partially offset by restructuring savings and lower incentive based compensation.2015 compared with 2014 As reported, costs of sales decreased $618 million in 2015 as compared to 2014. Cost of sales was impacted by favorable foreign currency translation of $492 million. On a constant dollar basis, cost of sales decreased $126 million primarily due to the divestiture of the North American foam trays and absorbent pads business and European food trays business of $140 million and favorable impact of $31 million related to cost savings, freight, and other supply chain costs. These were partially offset by $47 million in expenses related to higher non-material manufacturing costs, including salary and wage inflation. |
0.09848 | what percentage of the net inflows primarily from institutional investors was due to the transfer from retirement funds to target-date trusts? | DUKE ENERGY CORPORATION· DUKE ENERGY CAROLINAS, LLC· PROGRESS ENERGY INC. · DUKE ENERGY PROGRESS, LLC· DUKE ENERGY FLORIDA, LLC· DUKE ENERGY OHIO, INC. · DUKE ENERGY INDIANA, LLC· PIEDMONT NATURAL GAS COMPANY, INC. Combined Notes to Consolidated Financial Statements – (Continued) 25. QUARTERLY FINANCIAL DATA (UNAUDITED) DUKE ENERGY Quarterly EPS amounts may not sum to the full-year total due to changes in the weighted average number of common shares outstanding and rounding.
<table><tr><td>(in millions, except per share data)</td><td>First Quarter</td><td>Second Quarter</td><td>Third Quarter</td><td>Fourth Quarter</td><td>Total</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues</td><td>$5,729</td><td>$5,555</td><td>$6,482</td><td>$5,799</td><td>$23,565</td></tr><tr><td>Operating income</td><td>1,437</td><td>1,387</td><td>1,695</td><td>1,262</td><td>5,781</td></tr><tr><td>Income from continuing operations</td><td>717</td><td>691</td><td>957</td><td>705</td><td>3,070</td></tr><tr><td>Loss from discontinued operations, net of tax</td><td>—</td><td>-2</td><td>-2</td><td>-2</td><td>-6</td></tr><tr><td>Net income</td><td>717</td><td>689</td><td>955</td><td>703</td><td>3,064</td></tr><tr><td>Net income attributable to Duke Energy Corporation</td><td>716</td><td>686</td><td>954</td><td>703</td><td>3,059</td></tr><tr><td>Earnings per share:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$1.02</td><td>$0.98</td><td>$1.36</td><td>$1.00</td><td>$4.37</td></tr><tr><td>Diluted</td><td>$1.02</td><td>$0.98</td><td>$1.36</td><td>$1.00</td><td>$4.37</td></tr><tr><td>Loss from discontinued operations attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$-0.01</td></tr><tr><td>Diluted</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$-0.01</td></tr><tr><td>Net income attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$1.02</td><td>$0.98</td><td>$1.36</td><td>$1.00</td><td>$4.36</td></tr><tr><td>Diluted</td><td>$1.02</td><td>$0.98</td><td>$1.36</td><td>$1.00</td><td>$4.36</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues</td><td>$5,377</td><td>$5,213</td><td>$6,576</td><td>$5,577</td><td>$22,743</td></tr><tr><td>Operating income</td><td>1,240</td><td>1,259</td><td>1,954</td><td>888</td><td>5,341</td></tr><tr><td>Income from continuing operations</td><td>577</td><td>624</td><td>1,001</td><td>376</td><td>2,578</td></tr><tr><td>Income (Loss) from discontinued operations, net of tax</td><td>122</td><td>-112</td><td>180</td><td>-598</td><td>-408</td></tr><tr><td>Net income (loss)</td><td>699</td><td>512</td><td>1,181</td><td>-222</td><td>2,170</td></tr><tr><td>Net income (loss) attributable to Duke Energy Corporation</td><td>694</td><td>509</td><td>1,176</td><td>-227</td><td>2,152</td></tr><tr><td>Earnings per share:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income from continuing operations attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$0.83</td><td>$0.90</td><td>$1.44</td><td>$0.53</td><td>$3.71</td></tr><tr><td>Diluted</td><td>$0.83</td><td>$0.90</td><td>$1.44</td><td>$0.53</td><td>$3.71</td></tr><tr><td>Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$0.18</td><td>$-0.16</td><td>$0.26</td><td>$-0.86</td><td>$-0.60</td></tr><tr><td>Diluted</td><td>$0.18</td><td>$-0.16</td><td>$0.26</td><td>$-0.86</td><td>$-0.60</td></tr><tr><td>Net income (loss) attributable to Duke Energy Corporation common stockholders</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$1.01</td><td>$0.74</td><td>$1.70</td><td>$-0.33</td><td>$3.11</td></tr><tr><td>Diluted</td><td>$1.01</td><td>$0.74</td><td>$1.70</td><td>$-0.33</td><td>$3.11</td></tr></table>
The following table includes unusual or infrequently occurring items in each quarter during the two most recently completed fiscal years. All amounts discussed below are pretax.
<table><tr><td>(in millions)</td><td>First Quarter</td><td>Second Quarter</td><td>Third Quarter</td><td>Fourth Quarter</td><td>Total</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs to Achieve Piedmont Merger (see Note 2)</td><td>$-16</td><td>$-30</td><td>$-23</td><td>$-34</td><td>$-103</td></tr><tr><td>Regulatory Settlements (see Note 4)</td><td>—</td><td>—</td><td>-135</td><td>-23</td><td>-158</td></tr><tr><td>Commercial Renewables Impairments (see Notes 10 and 11)</td><td>—</td><td>—</td><td>-84</td><td>-18</td><td>-102</td></tr><tr><td>Impacts of the Tax Act (see Note 22)</td><td>—</td><td>—</td><td>—</td><td>102</td><td>102</td></tr><tr><td>Total</td><td>$-16</td><td>$-30</td><td>$-242</td><td>$27</td><td>$-261</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs to Achieve Mergers (see Note 2)</td><td>$-120</td><td>$-111</td><td>$-84</td><td>$-208</td><td>$-523</td></tr><tr><td>Commercial Renewables Impairment (see Note 12)</td><td>—</td><td>—</td><td>-71</td><td>—</td><td>-71</td></tr><tr><td>Loss on Sale of International Disposal Group (see Note 2)</td><td>—</td><td>—</td><td>—</td><td>-514</td><td>-514</td></tr><tr><td>Impairment of Assets in Central America (see Note 2)</td><td>—</td><td>-194</td><td>—</td><td>—</td><td>-194</td></tr><tr><td>Cost Savings Initiatives (see Note 19)</td><td>-20</td><td>-24</td><td>-19</td><td>-29</td><td>-92</td></tr><tr><td>Total</td><td>$-140</td><td>$-329</td><td>$-174</td><td>$-751</td><td>$-1,394</td></tr></table>
DUKE ENERGY CAROLINAS
<table><tr><td>(in millions)</td><td>First Quarter</td><td>Second Quarter</td><td>Third Quarter</td><td>Fourth Quarter</td><td>Total</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues</td><td>$1,716</td><td>$1,729</td><td>$2,136</td><td>$1,721</td><td>$7,302</td></tr><tr><td>Operating income</td><td>484</td><td>485</td><td>777</td><td>403</td><td>2,149</td></tr><tr><td>Net income</td><td>270</td><td>273</td><td>466</td><td>205</td><td>1,214</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues</td><td>$1,740</td><td>$1,675</td><td>$2,226</td><td>$1,681</td><td>$7,322</td></tr><tr><td>Operating income</td><td>481</td><td>464</td><td>815</td><td>302</td><td>2,062</td></tr><tr><td>Net income</td><td>271</td><td>261</td><td>494</td><td>140</td><td>1,166</td></tr></table>
The following table includes unusual or infrequently occurring items in each quarter during the two most recently completed fiscal years. All amounts discussed below are pretax.
<table><tr><td>(in millions)</td><td>First Quarter</td><td>Second Quarter</td><td>Third Quarter</td><td>Fourth Quarter</td><td>Total</td></tr><tr><td>2017</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs to Achieve Piedmont Merger (see Note 2)</td><td>$-4</td><td>$-6</td><td>$-5</td><td>$-5</td><td>$-20</td></tr><tr><td>Impacts of the Tax Act (see Note 22)</td><td>—</td><td>—</td><td>—</td><td>-15</td><td>-15</td></tr><tr><td>Total</td><td>$-4</td><td>$-6</td><td>$-5</td><td>$-20</td><td>$-35</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs to Achieve Mergers</td><td>$-11</td><td>$-12</td><td>$-13</td><td>$-68</td><td>$-104</td></tr><tr><td>Cost Savings Initiatives (see Note 19)</td><td>-10</td><td>-10</td><td>-8</td><td>-11</td><td>-39</td></tr><tr><td>Total</td><td>$-21</td><td>$-22</td><td>$-21</td><td>$-79</td><td>$-143</td></tr></table>
PART II The following table shows the percent changes in GWh sales and average number of customers for Duke Energy Carolinas. The below percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities and to public and private utilities and power marketers. Amounts are not weather-normalized.
<table><tr><td>Increase (Decrease) over prior year</td><td>2017</td><td>2016</td></tr><tr><td>Residential sales</td><td>-4.8%</td><td>0.1%</td></tr><tr><td>General service sales</td><td>-1.8%</td><td>0.7%</td></tr><tr><td>Industrial sales</td><td>-0.8%</td><td>-0.9%</td></tr><tr><td>Wholesale power sales</td><td>6.3%</td><td>9.8%</td></tr><tr><td>Joint dispatch sales</td><td>18.2%</td><td>-2.3%</td></tr><tr><td>Total sales</td><td>-1.4%</td><td>1.8%</td></tr><tr><td>Average number of customers</td><td>1.5%</td><td>1.4%</td></tr></table>
Year Ended December 31, 2017, as Compared to 2016 Operating Revenues. The variance was driven primarily by: ? a $179 million decrease in retail sales, net of fuel revenues, due to less favorable weather in the current year. Partially offset by: ? a $74 million increase in rider revenues and retail pricing primarily related to energy efficiency programs; ? a $41 million increase in weather-normal sales volumes to retail customers, net of fuel revenues; ? a $30 million increase in fuel revenues primarily due to changes in generation mix partially offset by lower retail sales; and ? a $7 million increase in wholesale power revenues, net of sharing and fuel, primarily due to additional volumes for customers served under long-term contracts. Operating Expenses. The variance was driven primarily by: ? a $145 million decrease in operations, maintenance and other expense primarily due to lower expenses at generating plants, lower costs associated with merger commitments related to the Piedmont acquisition in 2016, lower severance expenses, and lower employee benefit costs, partially offset by higher energy efficiency program costs. Partially offset by: ? a $25 million increase in fuel expense (including purchased power) primarily due to changes in generation mix, partially offset by lower retail sales; and ? a $15 million increase in depreciation and amortization expense primarily due to additional plant in service, partially offset by lower amortization of certain regulatory assets. Other Income and Expenses. The variance was primarily due to a decrease in recognition of post in-service equity returns for projects that had been completed prior to being reflected in customer rates. Income Tax Expense. The variance was primarily due to an increase in pretax income and the impact of the Tax Act, offset by the impact of research credits and the manufacturing deduction. See the Subsidiary Registrants section above for additional information on the Tax Act and the impact on the effective tax rate. Matters Impacting Future Results An order from regulatory authorities disallowing recovery of costs related to closure of ash impoundments could have an adverse impact on Duke Energy Carolinas’ financial position, results of operations and cash flows. See Notes 4 and 9 to the Consolidated Financial Statements, “Regulatory Matters” and “Asset Retirement Obligations,” respectively, for additional information. On May 18, 2016, the NCDEQ issued proposed risk classifications for all coal ash surface impoundments in North Carolina. All ash impoundments not previously designated as high priority by the Coal Ash Act were designated as intermediate risk. Certain impoundments classified as intermediate risk, however, may be reassessed in the future as low risk pursuant to legislation enacted on July 14, 2016. Duke Energy Carolinas’ estimated AROs related to the closure of North Carolina ash impoundments are based upon the mandated closure method or a probability weighting of potential closure methods for the impoundments that may be reassessed to low risk. As the final risk ranking classifications in North Carolina are delineated, final closure plans and corrective action measures are developed and approved for each site, the closure work progresses, and the closure method scope and remedial action methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Duke Energy Carolinas’ financial position. See Note 9 to the Consolidated Financial Statements, “Asset Retirement Obligations,” for additional information. Duke Energy Carolinas is a party to multiple lawsuits and subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. The outcome of these lawsuits, fines and penalties could have an adverse impact on Duke Energy Carolinas’ financial position, results of operations and cash flows. See Note 5 to the Consolidated Financial Statements, “Commitments and Contingencies,” for additional information. Duke Energy Carolinas filed a general rate case on August 25, 2017, to recover costs of complying with CCR regulations and the Coal Ash Act, as well as costs of capital investments in generation, transmission and distribution systems and any increase in expenditures subsequent to previous rate cases. Duke Energy Carolinas’ earnings could be adversely impacted if the rate increase is delayed or denied by the NCUC. Within this Item 7, see the Tax Cuts and Jobs Act above as well as Liquidity and Capital Resources below for risks associated with the Tax Act. Our non-operating investment activity resulted in net losses of $12.7 million in 2009 and $52.3 million in 2008. The improvement of nearly $40 million is primarily attributable to a reduction in the other than temporary impairments recognized on our investments in sponsored mutual funds in 2009 versus 2008. The following table details our related mutual fund investment gains and losses (in millions) during the past two years.
<table><tr><td></td><td>2008</td><td>2009</td><td>Change</td></tr><tr><td>Other than temporary impairments recognized</td><td>$-91.3</td><td>$-36.1</td><td>$55.2</td></tr><tr><td>Capital gain distributions received</td><td>5.6</td><td>2.0</td><td>-3.6</td></tr><tr><td>Net gain (loss) realized on fund dispositions</td><td>-4.5</td><td>7.4</td><td>11.9</td></tr><tr><td>Net loss recognized on fund holdings</td><td>$-90.2</td><td>$-26.7</td><td>$63.5</td></tr></table>
Lower income of $16 million from our money market holdings due to the significantly lower interest rate environment offset the improvement experienced with our fund investments. There is no impairment of any of our mutual fund investments at December 31, 2009. The 2009 provision for income taxes as a percentage of pretax income is 37.1%, down from 38.4% in 2008 and .9% lower than our present estimate of 38.0% for the 2010 effective tax rate. Our 2009 provision includes reductions of prior years’ tax provisions and discrete nonrecurring benefits that lowered our 2009 effective tax rate by 1.0%.2008 versus 2007. Investment advisory revenues decreased 6.3%, or $118 million, to $1.76 billion in 2008 as average assets under our management decreased $16 billion to $358.2 billion. The average annualized fee rate earned on our assets under management was 49.2 basis points in 2008, down from the 50.2 basis points earned in 2007, as lower equity market valuations resulted in a greater percentage of our assets under management being attributable to lower fee fixed income portfolios. Continuing stress on the financial markets and resulting lower equity valuations as 2008 progressed resulted in lower average assets under our management, lower investment advisory fees and lower net income as compared to prior periods. Net revenues decreased 5%, or $112 million, to $2.12 billion. Operating expenses were $1.27 billion in 2008, up 2.9% or $36 million from 2007. Net operating income for 2008 decreased $147.9 million, or 14.8%, to $848.5 million. Higher operating expenses in 2008 and decreased market valuations during the latter half of 2008, which lowered our assets under management and advisory revenues, resulted in our 2008 operating margin declining to 40.1% from 44.7% in 2007. Non-operating investment losses in 2008 were $52.3 million as compared to investment income of $80.4 million in 2007. Investment losses in 2008 include non-cash charges of $91.3 million for the other than temporary impairment of certain of the firm’s investments in sponsored mutual funds. Net income in 2008 fell 27% or nearly $180 million from 2007. Diluted earnings per share, after the retrospective application of new accounting guidance effective in 2009, decreased to $1.81, down $.59 or 24.6% from $2.40 in 2007. A non-operating charge to recognize other than temporary impairments of our sponsored mutual fund investments reduced diluted earnings per share by $.21 in 2008. Investment advisory revenues earned from the T. Rowe Price mutual funds distributed in the United States decreased 8.5%, or $114.5 million, to $1.24 billion. Average mutual fund assets were $216.1 billion in 2008, down $16.7 billion from 2007. Mutual fund assets at December 31, 2008, were $164.4 billion, down $81.6 billion from the end of 2007. Net inflows to the mutual funds during 2008 were $3.9 billion, including $1.9 billion to the money funds, $1.1 billion to the bond funds, and $.9 billion to the stock funds. The Value, Equity Index 500, and Emerging Markets stock funds combined to add $4.1 billion, while the Mid-Cap Growth and Equity Income stock funds had net redemptions of $2.2 billion. Net fund inflows of $6.2 billion originated in our target-date Retirement Funds, which in turn invest in other T. Rowe Price funds. Fund net inflow amounts in 2008 are presented net of $1.3 billion that was transferred to target-date trusts from the Retirement Funds during the year. Decreases in market valuations and income not reinvested lowered our mutual fund assets under management by $85.5 billion during 2008. Investment advisory revenues earned on the other investment portfolios that we manage decreased $3.6 million to $522.2 million. Average assets in these portfolios were $142.1 billion during 2008, up slightly from $141.4 billion in 2007. These minor changes, each less than 1%, are attributable to the timing of declining equity market valuations and cash flows among our separate account and subadvised portfolios. Net inflows, primarily from institutional investors, were $13.2 billion during 2008, including the $1.3 billion transferred from the Retirement Funds to target-date trusts. Decreases in market valuations, net of income, lowered our assets under management in these portfolios by $55.3 billion during 2008. |
2,272 | What's the average of the Avalon Terrace, LLC in the years where Town Run Associates is positive? | In conjunction with the acquisition and development of the investments in unconsolidated entities, the Company incurred costs in excess of its equity in the underlying net assets of the respective investments. These costs represent $5,375 at December 31, 2007 and $7,491 at December 31, 2006 of the respective investment balances. Investments in Unconsolidated Non-Real Estate Entities In February 2005, the Company sold its interest in a technology venture that was accounted for under the cost method. As a result of this transaction, the Company received net proceeds of approximately $6,700 and recognized a gain on the sale of this investment of $6,252, which is refl ected in equity in income of unconsolidated entities on the accompanying Consolidated Statement of Operations and Other Comprehensive Income for the year ended December 31, 2005. Under the terms of the sale, certain proceeds were escrowed to secure the purchaser’s rights to indemnifi cation. Any amounts not used for this purpose were distributed to the former investors in the venture in 2006. For the year ended December 31, 2006, the Company recognized $433 for the fi nal installment of the gain on this sale upon release of this escrow. The following is a summary of the Company’s equity in income (loss) of unconsolidated entities for the years presented:
<table><tr><td></td><td colspan="3">For the year ended</td></tr><tr><td></td><td>12-31-07</td><td>12-31-06</td><td>12-31-05</td></tr><tr><td>Town Grove, LLC</td><td>$57,821</td><td>$1,457</td><td>$1,286</td></tr><tr><td>Avalon Del Rey, LLC</td><td>3,616</td><td>—</td><td>—</td></tr><tr><td>CVP I, LLC</td><td>567</td><td>-68</td><td>-339</td></tr><tr><td>Town Run Associates</td><td>107</td><td>298</td><td>266</td></tr><tr><td>AvalonTerrace, LLC<sup>-1</sup></td><td>22</td><td>6,736</td><td>58</td></tr><tr><td>MVP I, LLC</td><td>-1,261</td><td>-662</td><td>-57</td></tr><tr><td>AvalonBay Value Added Fund, L.P.</td><td>-1,775</td><td>-799</td><td>-341</td></tr><tr><td>AvalonBay Redevelopment LLC</td><td>—</td><td>—</td><td>73</td></tr><tr><td>Rent.com</td><td>—</td><td>433</td><td>6,252</td></tr><tr><td>Constellation Real Technologies</td><td>72</td><td>60</td><td>—</td></tr><tr><td>Total<sup>-2</sup></td><td>$59,169</td><td>$7,455</td><td>$7,198</td></tr></table>
(1) Equity in income from this entity for 2006 includes a gain of $6,609 for the Company’s 25% share of the gain from the fourth quarter disposition of Avalon Bedford, the sole asset held by Avalon Terrace, LLC. (2) This table does not include Aria at Hathorne. As a development community, all costs are being capitalized, resulting in no reportable income.7. Real Estate Disposition Activities During the year ended December 31, 2007, the Company sold four communities: Avalon View, located in Wappingers Falls, New York, San Marino, located in San Jose, California, Avalon West, located in Westborough, Massachusetts and Avalon at Stevens Pond, located in Saugus, Massachusetts. These four communities contained a total of 982 apartment homes and were sold for an aggregate sales price of $204,650. The Company also sold its interest in Avalon Grove, which contained 402 apartment homes for a sales price of $63,446. The sale of these communities and partnership interest resulted in a gain in accordance with GAAP of $162,807. Details regarding the community asset sales are summarized in the following table:
<table><tr><td>Community Name</td><td>Location</td><td>Period of sale</td><td>Apartment homes</td><td>Debt</td><td>Gross sales price</td><td>Net proceeds</td></tr><tr><td>Avalon View</td><td>Wappingers Falls, NY</td><td>Q307</td><td>288</td><td>$—</td><td>$54,000</td><td>$53,293</td></tr><tr><td>San Marino</td><td>San Jose, CA</td><td>Q307</td><td>248</td><td>—</td><td>55,000</td><td>54,333</td></tr><tr><td>Avalon West</td><td>Westborough, MA</td><td>Q307</td><td>120</td><td>8,116</td><td>18,000</td><td>9,585</td></tr><tr><td>Avalon at Stevens Pond</td><td>Saugus, MA</td><td>Q407</td><td>326</td><td>—</td><td>77,650</td><td>76,784</td></tr><tr><td>Avalon Grove<sup>-1</sup></td><td>Stamford, CT</td><td>Q407</td><td>402</td><td>—</td><td>63,446</td><td>63,401</td></tr><tr><td>Total of all 2007 asset sales</td><td></td><td></td><td>1,384</td><td>$8,116</td><td>$268,096</td><td>$257,396</td></tr><tr><td>Total of all 2006 asset sales</td><td></td><td></td><td>1,036</td><td>$37,200</td><td>$261,850</td><td>$218,492</td></tr><tr><td>Total of all 2005 asset sales</td><td></td><td></td><td>1,305</td><td>$—</td><td>$351,450</td><td>$344,185</td></tr></table>
(1) The Company held and sold its 50% ownership interest in the LLC that developed, owned and operated Avalon Grove. The Company will continue to manage this community for a customary property management fee. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of December 31, 2007, the Company had no communities that qualifi ed as discontinued operations or held for sale under the provisions of SFAS No.144. In accordance with the requirements of SFAS No.144, the operations for any communities sold from January 1, 2005 through December 31, 2007 and the communities that qualifi ed as discontinued operations as of December 31, 2007 have been presented as discontinued operations in the accompanying Consolidated Financial Statements. Accordingly, certain reclassifi cations have been made in prior periods to refl ect discontinued operations consistent with current period presentation. The following is a summary of income from discontinued operations for the periods presented:
<table><tr><td></td><td colspan="3">For the year ended</td></tr><tr><td></td><td>12-31-07</td><td>12-31-06</td><td>12-31-05</td></tr><tr><td>Rental income</td><td>$10,911</td><td>$17,658</td><td>$42,336</td></tr><tr><td>Operating and other expenses</td><td>-4,043</td><td>-6,491</td><td>-14,441</td></tr><tr><td>Interest expense, net</td><td>-687</td><td>-1,862</td><td>-1,927</td></tr><tr><td>Depreciation expense</td><td>-2,176</td><td>-3,687</td><td>-6,842</td></tr><tr><td>Income from discontinuedoperations</td><td>$4,005</td><td>$5,618</td><td>$19,126</td></tr></table>
The Company’s Consolidated Balance Sheets include other assets (excluding net real estate) of $0 and $3,821 as of December 31, 2007 and December 31, 2006, respectively, and other liabilities of $0 as of December 31, 2007 and $69,100 as of December 31, 2006, relating to real estate assets sold or classifi ed as held for sale. During the year ended December 31, 2007, the Company sold one parcel of land through a taxable REIT subsidiary, located in the MidAtlantic, for a sales price of $5,800, resulting in a gain of $545 under GAAP. The Company had gains on the sales of land parcels of $13,519 in 2006, and $4,479 in 2005.8. Commitments and Contingencies Employment Agreements and Arrangements As of December 31, 2007, the Company had employment agreements with four executive offi cers. The employment agreements provide for severance payments and generally provide for accelerated vesting of stock options and restricted stock in the event of a termination of employment (except for a termination by the Company with cause or a voluntary termination by the employee). The current terms of these agreements end on dates that vary between November 2008 and June 2009. The employment agreements provide for one-year automatic renewals (two years in the case of the Chief Executive Offi cer (“CEO”)) after the initial term unless an advance notice of non-renewal is provided by either party. Upon a notice of non-renewal by the Company, each of the offi cers may terminate his employment and receive a severance payment. Upon a change in control, the agreements provide for an automatic extension of up to three years from the date of the change in control. The employment agreements provide for base salary and incentive compensation in the form of cash awards, stock options and stock grants subject to the discretion of, and attainment of performance goals established by the Compensation Committee of the Board of Directors. The Company’s stock incentive plan, as described in Note 10, “Stock-Based Compensation Plans,” provides that upon an employee’s Retirement (as defi ned in the plan documents) from the Company, all outstanding stock options and restricted shares of stock held by the employee will vest, and the employee will have up to 12 months to exercise any options held upon retirement. Under the plan, Retirement means a termination of employment, other than for cause, after attainment of age 50, provided that (i) the employee has worked for the Company for at least 10 years, (ii) the employee’s age at Retirement plus years of employment with the Company equals at least 70, (iii) the employee provides at least six months written notice of his intent to retire, and (iv) the employee enters into a one year non-compete and employee non-solicitation agreement. The Company also has an Offi cer Severance Program (the “Program”) for the benefi t of those offi cers of the Company who do not have employment agreements. Under the Program, in the event an offi cer who is not otherwise covered by a severance arrangement is terminated (other than for cause) within two years following a change in control (as defi ned) of the Company, such offi cer will generally receive a cash lump sum payment equal to the sum of such offi cer’s base salary and cash bonus, as well as accelerated vesting of stock options and restricted stock. Costs related to the Company’s employment agreements and the Program are accounted for in accordance with SFAS No.5, “Accounting for Contingencies,” and therefore are recognized when considered by management to be probable and estimable. Construction and Development Contingencies In connection with the pursuit of a Development Right in Pleasant Hill, California, $125,000 in bond fi nancing was issued by the Contra Costa County Redevelopment Agency (the “Agency”) in connection with the possible NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 9. Segment Reporting The Company’s reportable operating segments include Established Communities, Other Stabilized Communities, and Development/ Redevelopment Communities. Annually as of January 1st, the Company determines which of its communities fall into each of these categories and maintains that classifi cation, unless disposition plans regarding a community change, throughout the year for the purpose of reporting segment operations. ? Established Communities (also known as Same Store Communities) are communities where a comparison of operating results from the prior year to the current year is meaningful, as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year. For the year ended December 31, 2007, the Established Communities are communities that are consolidated for fi nancial reporting purposes, had stabilized occupancy and operating expenses as of January 1, 2006, are not conducting or planning to conduct substantial redevelopment activities and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment. ? Other Stabilized Communities includes all other completed communities that have stabilized occupancy, as defi ned above. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year. ? Development/Redevelopment Communities consists of communities that are under construction and have not received a fi nal certifi cate of occupancy, communities where substantial redevelopment is in progress or is planned to begin during the current year and communities under lease-up, that had not reached stabilized occupancy, as defi ned above, as of January 1, 2007. In addition, the Company owns land held for future development and has other corporate assets that are not allocated to an operating segment. SFAS No.131, “Disclosures about Segments of an Enterprise and Related Information,” requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing such segments’ performance. The Company’s chief operating decision maker is comprised of several members of its executive management team who use net operating income (“NOI”) as the primary fi nancial measure for Established Communities and Other Stabilized Communities. NOI is defi ned by the Company as total revenue less direct property operating expenses. Although the Company considers NOI a useful measure of a community’s or communities’ operating performance, NOI should not be considered an alternative to net income or net cash fl ow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income. A reconciliation of NOI to net income for the years ended December 31, 2007, 2006 and 2005 is as follows:
<table><tr><td></td><td colspan="3">For the year ended</td></tr><tr><td></td><td>12-31-07</td><td>12-31-06</td><td>12-31-05</td></tr><tr><td>Net income</td><td>$358,160</td><td>$266,546</td><td>$310,468</td></tr><tr><td>Indirect operating expenses, net of corporateincome</td><td>31,285</td><td>28,811</td><td>26,675</td></tr><tr><td>Investments and investment management</td><td>11,737</td><td>7,030</td><td>4,834</td></tr><tr><td>Interest expense, net</td><td>97,545</td><td>109,184</td><td>125,171</td></tr><tr><td>General and administrative expense</td><td>28,494</td><td>24,767</td><td>25,761</td></tr><tr><td>Equity in income of unconsolidated entities</td><td>-59,169</td><td>-7,455</td><td>-7,198</td></tr><tr><td>Minority interest in consolidated partnerships</td><td>1,585</td><td>573</td><td>1,481</td></tr><tr><td>Depreciation expense</td><td>179,549</td><td>160,442</td><td>156,455</td></tr><tr><td>Gain on sale of real estate assets</td><td>-107,032</td><td>-110,930</td><td>-199,766</td></tr><tr><td>Income from discontinued operations</td><td>-4,005</td><td>-5,618</td><td>-19,126</td></tr><tr><td>Net operating income</td><td>$538,149</td><td>$473,350</td><td>$424,755</td></tr></table>
The primary performance measure for communities under development or redevelopment depends on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget. Notes to Consolidated Financial Statements—(Continued) (Amounts in Millions, Except Per Share Amounts) A summary of the remaining liability for the 2007, 2003 and 2001 restructuring programs is as follows:
<table><tr><td></td><td>2007 Program</td><td>2003 Program</td><td>2001 Program</td><td>Total</td></tr><tr><td>Liability at December 31, 2006</td><td>$—</td><td>$12.6</td><td>$19.2</td><td>$31.8</td></tr><tr><td>Net charges (reversals) and adjustments</td><td>19.1</td><td>-0.5</td><td>-5.2</td><td>13.4</td></tr><tr><td>Payments and other<sup>1</sup></td><td>-7.2</td><td>-3.1</td><td>-5.3</td><td>-15.6</td></tr><tr><td>Liability at December 31, 2007</td><td>$11.9</td><td>$9.0</td><td>$8.7</td><td>$29.6</td></tr><tr><td>Net charges and adjustments</td><td>4.3</td><td>0.8</td><td>0.7</td><td>5.8</td></tr><tr><td>Payments and other<sup>1</sup></td><td>-15.0</td><td>-4.1</td><td>-3.5</td><td>-22.6</td></tr><tr><td>Liability at December 31, 2008</td><td>$1.2</td><td>$5.7</td><td>$5.9</td><td>$12.8</td></tr></table>
Includes amounts representing adjustments to the liability for changes in foreign currency exchange rates. Other Reorganization-Related Charges Other reorganization-related charges relate to our realignment of our media businesses into a newly created management entity called Mediabrands and the 2006 merger of Draft Worldwide and Foote, Cone and Belding Worldwide to create Draftfcb. Charges related to severance and terminations costs and lease termination and other exit costs. We expect charges associated with Mediabrands to be completed during the first half of 2009. Charges related to the creation of Draftfcb in 2006 are complete. The charges were separated from the rest of our operating expenses within the Consolidated Statements of Operations because they did not result from charges that occurred in the normal course of business. |
2,557 | What was the average value of Employee Compensation and Benefits, Communications and Information Processing, Occupancy and Equipment in 2006? | Interest expense related to capital lease obligations was $1.6 million during the year ended December 31, 2015, and $1.6 million during both the years ended December 31, 2014 and 2013. Purchase Commitments In the table below, we set forth our enforceable and legally binding purchase obligations as of December 31, 2015. Some of the amounts are based on management’s estimates and assumptions about these obligations, including their duration, the possibility of renewal, anticipated actions by third parties, and other factors. Because these estimates and assumptions are necessarily subjective, our actual payments may vary from those reflected in the table. Purchase orders made in the ordinary course of business are excluded below. Any amounts for which we are liable under purchase orders are reflected on the Consolidated Balance Sheets as accounts payable and accrued liabilities. These obligations relate to various purchase agreements for items such as minimum amounts of fiber and energy purchases over periods ranging from one year to 20 years. Total purchase commitments were as follows (dollars in millions):
<table><tr><td>2016</td><td>$95.3</td></tr><tr><td>2017</td><td>60.3</td></tr><tr><td>2018</td><td>28.0</td></tr><tr><td>2019</td><td>28.0</td></tr><tr><td>2020</td><td>23.4</td></tr><tr><td>Thereafter</td><td>77.0</td></tr><tr><td>Total</td><td>$312.0</td></tr></table>
The Company purchased a total of $299.6 million, $265.9 million, and $61.7 million during the years ended December 31, 2015, 2014, and 2013, respectively, under these purchase agreements. The increase in purchases The increase in purchases under these agreements in 2014, compared with 2013, relates to the acquisition of Boise in fourth quarter 2013. Environmental Liabilities The potential costs for various environmental matters are uncertain due to such factors as the unknown magnitude of possible cleanup costs, the complexity and evolving nature of governmental laws and regulations and their interpretations, and the timing, varying costs and effectiveness of alternative cleanup technologies. From 2006 through 2015, there were no significant environmental remediation costs at PCA’s mills and corrugated plants. At December 31, 2015, the Company had $24.3 million of environmental-related reserves recorded on its Consolidated Balance Sheet. Of the $24.3 million, approximately $15.8 million related to environmental-related asset retirement obligations discussed in Note 12, Asset Retirement Obligations, and $8.5 million related to our estimate of other environmental contingencies. The Company recorded $7.9 million in “Accrued liabilities” and $16.4 million in “Other long-term liabilities” on the Consolidated Balance Sheet. Liabilities recorded for environmental contingencies are estimates of the probable costs based upon available information and assumptions. Because of these uncertainties, PCA’s estimates may change. The Company believes that it is not reasonably possible that future environmental expenditures for remediation costs and asset retirement obligations above the $24.3 million accrued as of December 31, 2015, will have a material impact on its financial condition, results of operations, or cash flows. Guarantees and Indemnifications We provide guarantees, indemnifications, and other assurances to third parties in the normal course of our business. These include tort indemnifications, environmental assurances, and representations and warranties in commercial agreements. At December 31, 2015, we are not aware of any material liabilities arising from any guarantee, indemnification, or financial assurance we have provided. If we determined such a liability was probable and subject to reasonable determination, we would accrue for it at that time. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company's common stock is traded on the NYSE under the symbol “RJF”. At November 19, 2007 there were approximately 14,000 holders of the Company's common stock. The following table sets forth for the periods indicated the high and low trades for the common stock (as adjusted for the three-fortwo stock split in March 2006):
<table><tr><td></td><td colspan="2">2007</td><td colspan="2">2006</td></tr><tr><td></td><td>High</td><td>Low</td><td>High</td><td>Low</td></tr><tr><td>First Quarter</td><td>$ 33.63</td><td>$ 28.53</td><td>$ 25.72</td><td>$ 20.25</td></tr><tr><td>Second Quarter</td><td>32.52</td><td>27.38</td><td>31.45</td><td>24.47</td></tr><tr><td>Third Quarter</td><td>34.62</td><td>29.10</td><td>31.66</td><td>26.34</td></tr><tr><td>Fourth Quarter</td><td>36.00</td><td>28.65</td><td>30.57</td><td>26.45</td></tr></table>
See Quarterly Financial Information on page 87 of this report for the amount of the quarterly dividends paid. The Company expects to continue paying cash dividends. However, the payment and rate of dividends on the Company's common stock is subject to several factors including operating results, financial requirements of the Company, and the availability of funds from the Company's subsidiaries, including the brokerdealer subsidiaries, which may be subject to restrictions under the net capital rules of the SEC, FINRA and the IDA; and RJBank, which may be subject to restrictions by federal banking agencies. Such restrictions have never limited the Company's dividend payments. (See Note 19 of the Notes to Consolidated Financial Statements for more information on the capital restrictions placed on RJBank and the Company's broker-dealer subsidiaries). See Note 15 of the Notes to Consolidated Financial Statements for information regarding repurchased shares of the Company's common stock. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Factors Affecting “Forward-Looking Statements” From time to time, the Company may publish “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, or make oral statements that constitute forward-looking statements. These forwardlooking statements may relate to such matters as anticipated financial performance, future revenues or earnings, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, are discussed in the section entitled Risk Factors on page 42 of this report. The Company does not undertake any obligation to publicly update or revise any forward-looking statements. Overview The following Management’s Discussion and Analysis is intended to help the reader understand the results of operations and the financial condition of the Company. Management’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, the Company’s consolidated financial statements and accompanying notes to the consolidated financial statements. The Company’s results continue to be highly correlated to the direction of the U. S. equity markets and are subject to volatility due to changes in interest rates, valuation of financial instruments, economic and political trends and industry competition. During 2007, the market was impacted by rising energy prices, a housing market slowdown, a subprime lending collapse, a growing economy, a weakening US dollar and stable interest rates. The Company’s Private Client Group’s recruiting and retention of Financial Advisors was positively impacted by industry consolidation. RJBank benefited from the widening interest rate spreads and the availability of attractive loan purchases as a result of the subprime lending crisis. Results of Operations - RJBank The following table presents consolidated financial information for RJBank for the years indicated:
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2007</td><td>% Incr. (Decr.)</td><td>September 30, 2006</td><td>% Incr. (Decr.)</td><td>September 30, 2005</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Interest Earnings</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest Income</td><td>$ 278,248</td><td>144%</td><td>$ 114,065</td><td>153%</td><td>$ 45,017</td></tr><tr><td>Interest Expense</td><td>193,747</td><td>163%</td><td>73,529</td><td>234%</td><td>22,020</td></tr><tr><td>Net Interest Income</td><td>84,501</td><td>108%</td><td>40,536</td><td>76%</td><td>22,997</td></tr><tr><td>Other Income</td><td>1,324</td><td>111%</td><td>627</td><td>45%</td><td>431</td></tr><tr><td>Net Revenues</td><td>85,825</td><td>109%</td><td>41,163</td><td>76%</td><td>23,428</td></tr><tr><td>Non-Interest Expense</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee Compensation and Benefits</td><td>7,778</td><td>27%</td><td>6,135</td><td>14%</td><td>5,388</td></tr><tr><td>Communications and Information Processing</td><td>1,052</td><td>16%</td><td>907</td><td>14%</td><td>799</td></tr><tr><td>Occupancy and Equipment</td><td>719</td><td>14%</td><td>629</td><td>32%</td><td>478</td></tr><tr><td>Provision for Loan Losses and Unfunded</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commitments</td><td>32,150</td><td>134%</td><td>13,760</td><td>891%</td><td>1,388</td></tr><tr><td>Other</td><td>17,121</td><td>359%</td><td>3,729</td><td>218%</td><td>1,171</td></tr><tr><td>Total Non-Interest Expense</td><td>58,820</td><td>134%</td><td>25,160</td><td>173%</td><td>9,224</td></tr><tr><td>Pre-tax Earnings</td><td>$ 27,005</td><td>69%</td><td>$ 16,003</td><td>13%</td><td>$ 14,204</td></tr></table>
Year ended September 30, 2007 Compared with the Year ended September 30, 2006 - RJBank The Company completed its second bulk transfer of cash balances into the RJBank Deposit Program in March 2007, moving another $1.3 billion. This, combined with organic growth from the influx of new client assets, resulted in a $2.6 billion increase in average deposit balances. This increase in average deposit balances provided the funding for the $1.6 billion increase in average loan balances. This increase was 38% purchased residential mortgage pools and 62% corporate loans, 98% of which are purchased interests in corporate loan syndications with the remainder originated by RJBank. As a result of this growth, RJBank net interest income increased 108% to $84.5 million. Due to robust loan growth, the associated allowance for loan losses that are established upon recording a new loan and making new unfunded commitments required a provision of over $32 million in 2007. Accordingly, RJBank’s pre-tax income increased only 69%. During periods of growth when new loans are originated or purchased, an allowance for loan losses is established for potential losses inherent in those new loans. Accordingly, a robust period of growth generally results in charges to earnings in that period, while the benefits of higher interest earnings are realized in later periods. Year ended September 30, 2006 Compared with the Year ended September 30, 2005 - RJBank Assets at RJBank grew a substantial $1.8 billion during the year. The increase was driven by a $1.7 billion increase in deposits, $1.3 billion of which were redirected from the Company’s Heritage Cash Trust or customer brokerage accounts, representing the introduction of a new sweep program for certain brokerage accounts. This alternative offers clients a money market equivalent interest rate and FDIC insurance. The Company intends to expand this offering over the next several years, transferring an additional $2 to $4 billion. During the year, RJBank deployed $1.3 billion of the increased deposits into loans. Purchased residential loan pools increased $700 million and corporate loans increased $600 million. This growth, combined with increased rates, generated an increase in net interest income of nearly $18 million. Pre-tax income increased only $1.8 million, due to the $13.8 million provision for loan loss associated with the increase in loans outstanding |
0.52857 | what is the ratio of the decrease in the retained earnings to the to the beginning amount of unrecognized tax benefits in 2007 | Notes to Consolidated Financial Statements Note 11. Income Taxes – (Continued) The federal income tax return for 2006 is subject to examination by the IRS. In addition for 2007 and 2008, the IRS has invited the Company to participate in the Compliance Assurance Process (“CAP”), which is a voluntary program for a limited number of large corporations. Under CAP, the IRS conducts a real-time audit and works contemporaneously with the Company to resolve any issues prior to the filing of the tax return. The Company has agreed to participate. The Company believes this approach should reduce tax-related uncertainties, if any. The Company and/or its subsidiaries also file income tax returns in various state, local and foreign jurisdictions. These returns, with few exceptions, are no longer subject to examination by the various taxing authorities before 2000. As discussed in Note 1, the Company adopted the provisions of FIN No.48, “Accounting for Uncertainty in Income Taxes,” on January 1, 2007. As a result of the implementation of FIN No.48, the Company recognized a decrease to beginning retained earnings on January 1, 2007 of $37 million. The total amount of unrecognized tax benefits as of the date of adoption was approximately $70 million. Included in the balance at January 1, 2007, were $51 million of tax positions that if recognized would affect the effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
<table><tr><td>Balance, January 1, 2007</td><td>$70</td></tr><tr><td>Additions based on tax positions related to the current year</td><td>12</td></tr><tr><td>Additions for tax positions of prior years</td><td>3</td></tr><tr><td>Reductions for tax positions related to the current year</td><td>-23</td></tr><tr><td>Settlements</td><td>-6</td></tr><tr><td>Expiration of statute of limitations</td><td>-3</td></tr><tr><td>Balance, December 31, 2007</td><td>$53</td></tr></table>
The Company anticipates that it is reasonably possible that payments of approximately $2 million will be made primarily due to the conclusion of state income tax examinations within the next 12 months. Additionally, certain state and foreign income tax returns will no longer be subject to examination and as a result, there is a reasonable possibility that the amount of unrecognized tax benefits will decrease by $7 million. At December 31, 2007, there were $42 million of tax benefits that if recognized would affect the effective rate. The Company recognizes interest accrued related to: (1) unrecognized tax benefits in Interest expense and (2) tax refund claims in Other revenues on the Consolidated Statements of Income. The Company recognizes penalties in Income tax expense (benefit) on the Consolidated Statements of Income. During 2007, the Company recorded charges of approximately $4 million for interest expense and $2 million for penalties. Provision has been made for the expected U. S. federal income tax liabilities applicable to undistributed earnings of subsidiaries, except for certain subsidiaries for which the Company intends to invest the undistributed earnings indefinitely, or recover such undistributed earnings tax-free. At December 31, 2007, the Company has not provided deferred taxes of $126 million, if sold through a taxable sale, on $361 million of undistributed earnings related to a domestic affiliate. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings of foreign subsidiaries is not practicable. In connection with a non-recurring distribution of $850 million to Diamond Offshore from a foreign subsidiary, a portion of which consisted of earnings of the subsidiary that had not previously been subjected to U. S. federal income tax, Diamond Offshore recognized $59 million of U. S. federal income tax expense as a result of the distribution. It remains Diamond Offshore’s intention to indefinitely reinvest future earnings of the subsidiary to finance foreign activities. Total income tax expense for the years ended December 31, 2007, 2006 and 2005, was different than the amounts of $1,601 million, $1,557 million and $639 million, computed by applying the statutory U. S. federal income tax rate of 35% to income before income taxes and minority interest for each of the years. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – CNA Financial – (Continued)
<table><tr><td>Year Ended December 31, 2014</td><td>Specialty</td><td>Commercial</td><td>International</td><td>Total</td></tr><tr><td>(In millions, except %)</td><td></td><td></td><td></td><td></td></tr><tr><td>Net written premiums</td><td>$2,839</td><td>$2,817</td><td>$880</td><td>$6,536</td></tr><tr><td>Net earned premiums</td><td>2,838</td><td>2,906</td><td>913</td><td>6,657</td></tr><tr><td>Net investment income</td><td>560</td><td>723</td><td>61</td><td>1,344</td></tr><tr><td>Net operating income</td><td>569</td><td>276</td><td>63</td><td>908</td></tr><tr><td>Net realized investment gains (losses)</td><td>9</td><td>9</td><td>-1</td><td>17</td></tr><tr><td>Net income</td><td>578</td><td>285</td><td>62</td><td>925</td></tr><tr><td>Other performance metrics:</td><td></td><td></td><td></td><td></td></tr><tr><td>Loss and loss adjustment expense ratio</td><td>57.3%</td><td>75.3%</td><td>53.5%</td><td>64.6%</td></tr><tr><td>Expense ratio</td><td>30.1</td><td>33.7</td><td>38.9</td><td>32.9</td></tr><tr><td>Dividend ratio</td><td>0.2</td><td>0.3</td><td></td><td>0.2</td></tr><tr><td>Combined ratio</td><td>87.6%</td><td>109.3%</td><td>92.4%</td><td>97.7%</td></tr><tr><td>Rate</td><td>3%</td><td>5%</td><td>-1%</td><td>3%</td></tr><tr><td>Retention</td><td>87%</td><td>73%</td><td>74%</td><td>78%</td></tr><tr><td>New Business (a)</td><td>$309</td><td>$491</td><td>$115</td><td>$915</td></tr></table>
(a) Includes Hardy new business of $133 million for the year ended December 31, 2016. Prior years amounts are not included for Hardy.2016 Compared with 2015 Net written premiums increased $21 million in 2016 as compared with 2015. Net written premiums for Commercial increased $23 million in 2016 as compared with 2015, driven by strong retention in middle markets, partially offset by a decrease in small business, which included a premium rate adjustment, as discussed in Note 18 of the Notes to Consolidated Financial Statements under Item 8. Net written premiums for Specialty in 2016 were consistent with 2015 as growth in warranty was offset by a decrease in management and professional liability and health care due to underwriting actions undertaken in certain business lines. Net written premiums for International in 2016 were consistent with 2015 and include favorable period over period premium development of $24 million. Excluding the effect of foreign currency exchange rates and premium development, net written premiums increased 1.4% in 2016 in International. The increase in net earned premiums was consistent with the trend in net written premiums in Commercial. Excluding the effect of foreign currency exchange rates and premium development, the increase in net earned premiums was consistent with the trend in net written premiums in International. Net operating income increased $15 million in 2016 as compared with 2015. The increase in net operating income was primarily due to higher favorable net prior year reserve development and net investment income, partially offset by an increase in the current accident year loss ratio and higher underwriting expenses. Catastrophe losses were $100 million (after tax and noncontrolling interests) in 2016 as compared to catastrophe losses of $85 million (after tax and noncontrolling interests) in 2015. Favorable net prior year development of $316 million and $218 million was recorded in 2016 and 2015. Specialty recorded favorable net prior year development of $305 million and $152 million in 2016 and 2015, Commercial recorded unfavorable net prior year development of $53 million in 2016 as compared with favorable net prior year development of $30 million in 2015 and International recorded favorable net prior year development of $64 million and $36 million in 2016 and 2015. Further information on net prior year development is included in Note 8 of the Notes to Consolidated Financial Statements included under Item 8. Specialty’s combined ratio decreased 3.7 points in 2016 as compared with 2015. The loss ratio decreased 4.6 points due to higher favorable net prior year reserve development, partially offset by a higher current accident year loss ratio. Specialty’s expense ratio increased 0.9 points in 2016 as compared with 2015 due to higher employee costs and higher information technology (“IT”) spending primarily related to new underwriting platforms. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations – Boardwalk Pipeline – (Continued) Results of Operations The following table summarizes the results of operations for Boardwalk Pipeline for the years ended December 31, 2016, 2015 and 2014 as presented in Note 20 of the Notes to Consolidated Financial Statements included under Item 8:
<table><tr><td> Year Ended December 31</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td> (In millions)</td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td></tr><tr><td>Other revenue, primarily operating</td><td>$ 1,316</td><td>$ 1,253</td><td>$ 1,235</td></tr><tr><td>Net investment income</td><td></td><td>1</td><td>1</td></tr><tr><td>Total</td><td>1,316</td><td>1,254</td><td>1,236</td></tr><tr><td>Expenses:</td><td></td><td></td><td></td></tr><tr><td>Operating</td><td>835</td><td>851</td><td>931</td></tr><tr><td>Interest</td><td>183</td><td>176</td><td>165</td></tr><tr><td>Total</td><td>1,018</td><td>1,027</td><td>1,096</td></tr><tr><td>Income before income tax</td><td>298</td><td>227</td><td>140</td></tr><tr><td>Income tax expense</td><td>-61</td><td>-46</td><td>-11</td></tr><tr><td>Amounts attributable to noncontrolling interests</td><td>-148</td><td>-107</td><td>-111</td></tr><tr><td>Net income attributable to Loews Corporation</td><td>$ 89</td><td>$ 74</td><td>$ 18</td></tr></table>
2016 Compared with 2015 Total revenues increased $62 million in 2016 as compared with 2015. Excluding the net effect of $13 million of proceeds received from the settlement of a legal matter in 2016, $9 million of proceeds received from a business interruption claim in 2015 and items offset in fuel and transportation expense, primarily retained fuel, operating revenues increased $83 million. The increase was driven by an increase in transportation revenues of $71 million, which resulted primarily from growth projects recently placed into service, incremental revenues from the Gulf South rate case of $18 million and a full year of revenues from the Evangeline pipeline. Storage and PAL revenues were higher by $17 million primarily from the effects of favorable market conditions on time period price spreads. Operating expenses decreased $16 million in 2016 as compared with 2015. Excluding receipt of a franchise tax refund of $10 million in 2015 and items offset in operating revenues, operating costs and expenses increased $5 million primarily due to higher employee related costs, partially offset by decreases in maintenance activities and depreciation expense. Interest expense increased $7 million primarily due to higher average interest rates compared to 2015. Net income increased $15 million in 2016 as compared with 2015, primarily reflecting higher revenues and lower operating expenses, partially offset by higher interest expense as discussed above.2015 Compared with 2014 Total revenues increased $18 million in 2015 as compared with 2014. Excluding the business interruption claim proceeds of $8 million and items offset in fuel and transportation expense, primarily retained fuel, operating revenues increased $33 million. This increase is primarily due to higher transportation revenues of $39 million from growth projects recently placed into service, including the Evangeline pipeline which was acquired in October of 2014 and $20 million of additional revenues resulting from the Gulf South rate case, partially offset by the effects of comparably warm weather experienced in the early part of the 2015 period in Boardwalk Pipeline’s market areas and unfavorable market conditions. Storage and PAL revenues decreased $20 million primarily as a result of the effects of unfavorable market conditions on time period price spreads. Operating expenses decreased $80 million in 2015 as compared with 2014. This decrease is primarily due to a $94 million prior year charge to write off all capitalized costs associated with the terminated Bluegrass project, a $10 million franchise tax refund related to settlement of prior tax periods and a decrease in fuel and transportation expense due to lower natural gas prices. These decreases were partially offset by higher depreciation expense of $35 |
2,005 | Which year is Fair value of plan assets at beginning of year for Non-U.S. the most? | On October 22, 2004, the American Jobs Creation Act of 2004 (the “Act”) was signed into law. The Act creates a temporary incentive for U. S. companies to repatriate accumulated foreign earnings at a substantially reduced U. S. effective tax rate by providing a dividends received deduction on the repatriation of certain foreign earnings to the U. S. taxpayer (the “repatriation provision”). The new deduction is subject to a number of limitations and requirements. In the fourth quarter of 2005, the Firm applied the repatriation provision to $1.9 billion of cash from foreign earnings, resulting in a net tax benefit of $55 million. The $1.9 billion of cash will be used in accordance with the Firm’s domestic reinvestment plan pursuant to the guidelines set forth in the Act. The tax expense (benefit) applicable to securities gains and losses for the years 2005, 2004 and 2003 was $(536) million, $126 million and $477 million, respectively. A reconciliation of the applicable statutory U. S. income tax rate to the effective tax rate for the past three years is shown in the following table:
<table><tr><td>Year ended December 31,<sup>(a)</sup></td><td>2005</td><td>2004</td><td>2003</td></tr><tr><td>Statutory U.S. federal tax rate</td><td>35.0%</td><td>35.0%</td><td>35.0%</td></tr><tr><td>Increase (decrease) in tax rate resulting from:</td><td></td><td></td><td></td></tr><tr><td>U.S. state and local income taxes, net offederal income tax benefit</td><td>1.6</td><td>0.6(b)</td><td>2.1</td></tr><tr><td>Tax-exempt income</td><td>-3.0</td><td>-4.1</td><td>-2.4</td></tr><tr><td>Non-U.S. subsidiary earnings</td><td>-1.4</td><td>-1.3</td><td>-0.7</td></tr><tr><td>Business tax credits</td><td>-3.6</td><td>-4.1</td><td>-0.9</td></tr><tr><td>Other, net</td><td>2.0</td><td>1.8</td><td>-0.1</td></tr><tr><td>Effective tax rate</td><td>30.6%</td><td>27.9%</td><td>33.0%</td></tr></table>
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.2003 reflects the results of heritage JPMorgan Chase only. (b) The lower rate in 2004 was attributable to changes in the proportion of income subject to different state and local taxes. The following table presents the U. S. and non-U. S. components of income before income tax expense:
<table><tr><td>Year ended December 31, (in millions)<sup>(a)</sup></td><td> 2005</td><td>2004</td><td>2003</td></tr><tr><td>U.S.</td><td>$8,959</td><td>$3,817</td><td>$7,333</td></tr><tr><td>Non-U.S.<sup>(b)</sup></td><td>3,256</td><td>2,377</td><td>2,695</td></tr><tr><td>Income before income tax expense</td><td>$12,215</td><td>$6,194</td><td>$10,028</td></tr></table>
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results.2003 reflects the results of heritage JPMorgan Chase only. (b) For purposes of this table, non-U. S. income is defined as income generated from operations located outside the United States of America. Note 23 – Restrictions on cash and intercompany funds transfers JPMorgan Chase Bank’s business is subject to examination and regulation by the Office of the Comptroller of the Currency (“OCC”). The Bank is a member of the Federal Reserve System and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Federal Reserve Board requires depository institutions to maintain cash reserves with a Federal Reserve Bank. The average amount of reserve balances deposited by the Firm’s bank subsidiaries with various Federal Reserve Banks was approximately $2.7 billion in 2005 and $3.8 billion in 2004. Restrictions imposed by federal law prohibit JPMorgan Chase and certain other affiliates from borrowing from banking subsidiaries unless the loans are secured in specified amounts. Such secured loans to the Firm or to other affiliates are generally limited to 10% of the banking subsidiary’s total capital, as determined by the risk-based capital guidelines; the aggregate amount of all such loans is limited to 20% of the banking subsidiary’s total capital. The principal sources of JPMorgan Chase’s income (on a parent company-only basis) are dividends and interest from JPMorgan Chase Bank and the other banking and nonbanking subsidiaries of JPMorgan Chase. In addition to dividend restrictions set forth in statutes and regulations, the FRB, the OCC and the FDIC have authority under the Financial Institutions Supervisory Act to prohibit or to limit the payment of dividends by the banking organizations they supervise, including JPMorgan Chase and its subsidiaries that are banks or bank holding companies, if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization. At January 1, 2006 and 2005, JPMorgan Chase’s bank subsidiaries could pay, in the aggregate, $7.4 billion and $6.2 billion, respectively, in dividends to their respective bank holding companies without prior approval of their relevant banking regulators. Dividend capacity in 2006 will be supplemented by the banks’ earnings during the year. In compliance with rules and regulations established by U. S. and non-U. S. regulators, as of December 31, 2005 and 2004, cash in the amount of $6.4 billion and $4.3 billion, respectively, and securities with a fair value of $2.1 billion and $2.7 billion, respectively, were segregated in special bank accounts for the benefit of securities and futures brokerage customers. Note 24 – Capital There are two categories of risk-based capital: Tier 1 capital and Tier 2 capital. Tier 1 capital includes common stockholders’ equity, qualifying preferred stock and minority interest less goodwill and other adjustments. Tier 2 capital consists of preferred stock not qualifying as Tier 1, subordinated long-term debt and other instruments qualifying as Tier 2, and the aggregate allowance for credit losses up to a certain percentage of risk-weighted assets. Total regulatory capital is subject to deductions for investments in certain subsidiaries. Under the risk-based capital guidelines of the FRB, JPMorgan Chase is required to maintain minimum ratios of Tier 1 and Total (Tier 1 plus Tier 2) capital to riskweighted assets, as well as minimum leverage ratios (which are defined as Tier 1 capital to average adjusted on–balance sheet assets). Failure to meet these minimum requirements could cause the FRB to take action. Bank subsidiaries also are subject to these capital requirements by their respective primary regulators. As of December 31, 2005 and 2004, JPMorgan Chase and all of its banking subsidiaries were well-capitalized and met all capital requirements to which each was subject. Litigation reserve The Firm maintains litigation reserves for certain of its litigations, including its material legal proceedings. While the outcome of litigation is inherently uncertain, management believes, in light of all information known to it at December 31, 2005, that the Firm’s litigation reserves were adequate at such date. Management reviews litigation reserves periodically, and the reserves may be increased or decreased in the future to reflect further litigation developments. The Firm believes it has meritorious defenses to claims asserted against it in its currently outstanding litigation and, with respect to such litigation, intends to continue to defend itself vigorously, litigating or settling cases according to management’s judgment as to what is in the best interest of stockholders. Note 26 – Accounting for derivative instruments and hedging activities Derivative instruments enable end users to increase, reduce or alter exposure to credit or market risks. The value of a derivative is derived from its reference to an underlying variable or combination of variables such as equity, foreign exchange, credit, commodity or interest rate prices or indices. JPMorgan Chase makes markets in derivatives for customers and also is an end-user of derivatives in order to manage the Firm’s exposure to credit and market risks. SFAS 133, as amended by SFAS 138 and SFAS 149, establishes accounting and reporting standards for derivative instruments, including those used for trading and hedging activities, and derivative instruments embedded in other contracts. All free-standing derivatives, whether designated for hedging relationships or not, are required to be recorded on the balance sheet at fair value. The accounting for changes in value of a derivative depends on whether the contract is for trading purposes or has been designated and qualifies for hedge accounting. The majority of the Firm’s derivatives are entered into for trading purposes. The Firm also uses derivatives as an end user to hedge market exposures, modify the interest rate characteristics of related balance sheet instruments or meet longer-term investment objectives. Both trading and end-user derivatives are recorded at fair value in Trading assets and Trading liabilities as set forth in Note 3 on page 94 of this Annual Report. In order to qualify for hedge accounting, a derivative must be considered highly effective at reducing the risk associated with the exposure being hedged. Each derivative must be designated as a hedge, with documentation of the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure, and how effectiveness is to be assessed prospectively and retrospectively. The extent to which a hedging instrument is effective at achieving offsetting changes in fair value or cash flows must be assessed at least quarterly. Any ineffectiveness must be reported in current-period earnings. For qualifying fair value hedges, all changes in the fair value of the derivative and in the fair value of the item for the risk being hedged are recognized in earnings. If the hedge relationship is terminated, then the fair value adjustment to the hedged item continues to be reported as part of the basis of the item and is amortized to earnings as a yield adjustment. For qualifying cash flow hedges, the effective portion of the change in the fair value of the derivative is recorded in Other comprehensive income and recognized in the income statement when the hedged cash flows affect earnings. The ineffective portions of cash flow hedges are immediately recognized in earnings. If the hedge relationship is terminated, then the change in fair value of the derivative recorded in Other comprehensive income is recognized when the cash flows that were hedged occur, consistent with the original hedge strategy. For hedge relationships discontinued because the forecasted transaction is not expected to occur according to the original strategy, any related derivative amounts recorded in Other comprehensive income are immediately recognized in earnings. For qualifying net investment hedges, changes in the fair value of the derivative or the revaluation of the foreign currency–denominated debt instrument are recorded in the translation adjustments account within Other comprehensive income. Any ineffective portions of net investment hedges are immediately recognized in earnings. JPMorgan Chase’s fair value hedges primarily include hedges of fixed-rate long-term debt, loans, AFS securities and MSRs. Interest rate swaps are the most common type of derivative contract used to modify exposure to interest rate risk, converting fixed-rate assets and liabilities to a floating rate. Interest rate options, swaptions and forwards are also used in combination with interest rate swaps to hedge the fair value of the Firm’s MSRs. For a further discussion of MSR risk management activities, see Note 15 on pages 114–116 of this Annual Report. All amounts have been included in earnings consistent with the classification of the hedged item, primarily Net interest income, Mortgage fees and related income, and Other income. The Firm did not recognize any gains or losses during 2005 on firm commitments that no longer qualify as fair value hedges. JPMorgan Chase also enters into derivative contracts to hedge exposure to variability in cash flows from floating-rate financial instruments and forecasted transactions, primarily the rollover of short-term assets and liabilities, and foreign currency-denominated revenues and expenses. Interest rate swaps, futures and forward contracts are the most common instruments used to reduce the impact of interest rate and foreign exchange rate changes on future earnings. All amounts affecting earnings have been recognized consistent with the classification of the hedged item, primarily Net interest income. The Firm uses forward foreign exchange contracts and foreign currencydenominated debt instruments to protect the value of net investments in foreign currencies in non-U. S. subsidiaries. The portion of the hedging instruments excluded from the assessment of hedge effectiveness (forward points) is recorded in Net interest income. The following table presents derivative instrument hedging-related activities for the periods indicated:
<table><tr><td>Year ended December 31, (in millions)<sup>(a)</sup></td><td>2005</td><td>2004</td></tr><tr><td>Fair value hedge ineffective net gains/(losses)<sup>(b)</sup></td><td>$-58</td><td>$199</td></tr><tr><td>Cash flow hedge ineffective net gains/(losses)<sup>(b)</sup></td><td>-2</td><td>—</td></tr><tr><td>Cash flow hedging gains on forecastedtransactions that failed to occur</td><td>—</td><td>1</td></tr></table>
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results. (b) Includes ineffectiveness and the components of hedging instruments that have been excluded from the assessment of hedge effectiveness. Over the next 12 months, it is expected that $44 million (after-tax) of net gains recorded in Other comprehensive income at December 31, 2005, will be recognized in earnings. The maximum length of time over which forecasted transactions are hedged is 10 years, and such transactions primarily relate to core lending and borrowing activities. JPMorgan Chase does not seek to apply hedge accounting to all of the Firm’s economic hedges. For example, the Firm does not apply hedge accounting to standard credit derivatives used to manage the credit risk of loans and commitments because of the difficulties in qualifying such contracts as hedges under SFAS 133. Similarly, the Firm does not apply hedge accounting to certain interest rate derivatives used as economic hedges.
<table><tr><td></td><td colspan="4">Defined benefit pension plans</td><td colspan="2"></td></tr><tr><td></td><td colspan="2">U.S.</td><td colspan="2">Non-U.S.</td><td colspan="2">Other postretirement benefit plans (c)(d)</td></tr><tr><td>December 31, (in millions)</td><td>2005</td><td>2004(b)</td><td>2005</td><td>2004(b)</td><td>2005</td><td>2004(b)</td></tr><tr><td> Change in benefit obligation</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Benefit obligation at beginning of year</td><td>$-7,594</td><td>$-4,633</td><td>$-1,969</td><td>$-1,659</td><td>$-1,577</td><td>$-1,252</td></tr><tr><td>Merger with Bank One</td><td>—</td><td>-2,497</td><td>—</td><td>-25</td><td>—</td><td>-216</td></tr><tr><td>Cazenove business partnership</td><td>—</td><td>—</td><td>-291</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Benefits earned during the year</td><td>-280</td><td>-251</td><td>-25</td><td>-17</td><td>-13</td><td>-15</td></tr><tr><td>Interest cost on benefit obligations</td><td>-431</td><td>-348</td><td>-104</td><td>-87</td><td>-81</td><td>-81</td></tr><tr><td>Plan amendments</td><td>—</td><td>70</td><td>—</td><td>—</td><td>117</td><td>32</td></tr><tr><td>Employee contributions</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-44</td><td>-36</td></tr><tr><td>Actuarial gain (loss)</td><td>-122</td><td>-511</td><td>-310</td><td>-99</td><td>21</td><td>-163</td></tr><tr><td>Benefits paid</td><td>723</td><td>555</td><td>66</td><td>64</td><td>187</td><td>167</td></tr><tr><td>Curtailments</td><td>28</td><td>21</td><td>—</td><td>—</td><td>-9</td><td>-8</td></tr><tr><td>Special termination benefits</td><td>—</td><td>—</td><td>—</td><td>-12</td><td>-1</td><td>-2</td></tr><tr><td>Foreign exchange impact and other</td><td>—</td><td>—</td><td>255</td><td>-134</td><td>5</td><td>-3</td></tr><tr><td>Benefit obligation at end of year</td><td>$-7,676</td><td>$-7,594</td><td>$-2,378</td><td>$-1,969</td><td>$-1,395</td><td>$-1,577</td></tr><tr><td> Change in plan assets</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$9,637</td><td>$4,866</td><td>$1,889</td><td>$1,603</td><td>$1,302</td><td>$1,149</td></tr><tr><td>Merger with Bank One</td><td>—</td><td>3,280</td><td>—</td><td>20</td><td>—</td><td>98</td></tr><tr><td>Cazenove business partnership</td><td>—</td><td>—</td><td>252</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Actual return on plan assets</td><td>703</td><td>946</td><td>308</td><td>164</td><td>43</td><td>84</td></tr><tr><td>Firm contributions</td><td>—</td><td>1,100</td><td>78</td><td>40</td><td>3</td><td>2</td></tr><tr><td>Benefits paid</td><td>-723</td><td>-555</td><td>-66</td><td>-64</td><td>-19</td><td>-31</td></tr><tr><td>Foreign exchange impact and other</td><td>—</td><td>—</td><td>-238</td><td>126</td><td>—</td><td>—</td></tr><tr><td>Fair value of plan assets at end of year</td><td>$9,617(e)</td><td>$9,637(e)</td><td>$2,223</td><td>$1,889</td><td>$1,329</td><td>$1,302</td></tr><tr><td> Reconciliation of funded status</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Funded status</td><td>$1,941</td><td>$2,043</td><td>$-155</td><td>$-80</td><td>$-66</td><td>$-275</td></tr><tr><td>Unrecognized amounts:<sup>(a)</sup></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net transition asset</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>—</td><td>—</td></tr><tr><td>Prior service cost</td><td>40</td><td>47</td><td>3</td><td>4</td><td>-105</td><td>-23</td></tr><tr><td>Net actuarial loss</td><td>1,078</td><td>997</td><td>599</td><td>590</td><td>335</td><td>321</td></tr><tr><td> Prepaid benefit cost reported in Other assets</td><td>$3,059</td><td>$3,087</td><td>$447(f)</td><td>$513(f)</td><td>$164</td><td>$23</td></tr><tr><td> Accumulated benefit obligation</td><td>$-7,274</td><td>$-7,167</td><td>$-2,303</td><td>$-1,931</td><td> NA</td><td>NA</td></tr></table>
(a) For pension benefit plans, the unrecognized net loss is primarily the result of declines in interest rates in recent years, as offset by recent asset gains and amounts recognized through amortization in expense. Other factors that contribute to this unrecognized amount include demographic experience, which differs from expected, and changes in other actuarial assumptions. For other postretirement benefit plans, the primary drivers of the cumulative unrecognized loss was the decline in the discount rate in recent years and the medical trend, which was higher than expected. These losses have been offset somewhat by the recognition of future savings attributable to Medicare Part D subsidy payments. (b) Effective July 1, 2004, the Firm assumed the obligations of heritage Bank One’s pension and postretirement plans. These plans were similar to those of JPMorgan Chase and were merged into the Firm’s plans effective December 31, 2004. (c) The Medicare Prescription Drug, Improvement and Modernization Act of 2003 resulted in a $35 million reduction in the Accumulated other postretirement benefit obligation as of January 1, 2004. During 2005, an additional $116 million reduction was reflected for recognition of the final Medicare Part D regulations issued on January 21, 2005. (d) Includes postretirement benefit obligation of $44 million and $43 million and postretirement benefit liability (included in Accrued expenses) of $50 million and $57 million at December 31, 2005 and 2004, respectively, for the U. K. plan, which is unfunded. (e) At December 31, 2005 and 2004, approximately $405 million and $358 million, respectively, of U. S. plan assets relate to surplus assets of group annuity contracts. (f) At December 31,2005 and 2004,Accrued expenses related to non-U. S. defined benefit pension plans that JPMorgan Chase elected not to prefund fully totaled $164 million and $124 million,respectively.
<table><tr><td></td><td colspan="6">Defined benefit pension plans</td><td colspan="3"></td></tr><tr><td></td><td colspan="3">U.S.</td><td colspan="3">Non-U.S.</td><td colspan="3">Other postretirement benefit plans</td></tr><tr><td>For the year ended December 31, (in millions)</td><td>2005</td><td>2004(a)</td><td>2003(b)</td><td>2005</td><td>2004(a)</td><td>2003(b)</td><td>2005(c)</td><td>2004(a) (c)</td><td>2003(b)</td></tr><tr><td> Components of net periodic benefit cost</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Benefits earned during the period</td><td>$280</td><td>$251</td><td>$180</td><td>$25</td><td>$17</td><td>$16</td><td>$13</td><td>$15</td><td>$15</td></tr><tr><td>Interest cost on benefitobligations</td><td>431</td><td>348</td><td>262</td><td>104</td><td>87</td><td>74</td><td>81</td><td>81</td><td>73</td></tr><tr><td>Expected return on plan assets</td><td>-694</td><td>-556</td><td>-322</td><td>-109</td><td>-90</td><td>-83</td><td>-90</td><td>-86</td><td>-92</td></tr><tr><td>Amortization of unrecognizedamounts:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Prior service cost</td><td>5</td><td>13</td><td>6</td><td>1</td><td>1</td><td>—</td><td>-10</td><td>—</td><td>1</td></tr><tr><td>Net actuarial loss</td><td>4</td><td>23</td><td>62</td><td>38</td><td>44</td><td>35</td><td>12</td><td>—</td><td>—</td></tr><tr><td>Curtailment (gain) loss</td><td>2</td><td>7</td><td>2</td><td>—</td><td>—</td><td>8</td><td>-17</td><td>8</td><td>2</td></tr><tr><td>Settlement (gain) loss</td><td>—</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Special termination benefits</td><td>—</td><td>—</td><td>—</td><td>—</td><td>11</td><td>—</td><td>1</td><td>2</td><td>—</td></tr><tr><td> Reported net periodic benefit costs</td><td>$28</td><td>$86</td><td>$190</td><td>$59</td><td>$69</td><td>$50</td><td>$-10</td><td>$20</td><td>$-1</td></tr></table>
(a) Effective July 1, 2004, the Firm assumed the obligations of heritage Bank One’s pension and postretirement plans. These plans were similar to those of JPMorgan Chase and were merged into the Firm’s plans effective December 31, 2004. (b) Heritage JPMorgan Chase results only for 2003. (c) The Medicare Prescription Drug, Improvement and Modernization Act of 2003 resulted in a $15 million and $5 million reduction in 2005 and 2004, respectively, in net periodic benefit cost. The impact on 2005 cost was higher as a result of the final Medicare Part D regulations issued on January 21, 20 |
18,777 | What is the sum of Commercial paper of 2011 Amortized Cost, Net sales of 2011, and Net sales of 2013 ? | Aeronautics’ operating profit for 2012 increased $69 million, or 4%, compared to 2011. The increase was attributable to higher operating profit of approximately $105 million from C-130 programs due to an increase in risk retirements; about $50 million from F-16 programs due to higher aircraft deliveries partially offset by a decline in risk retirements; approximately $50 million from F-35 production contracts due to increased production volume and risk retirements; and about $50 million from the completion of purchased intangible asset amortization on certain F-16 contracts. Partially offsetting the increases was lower operating profit of about $90 million from the F-35 development contract primarily due to the inception-to-date effect of reducing the profit booking rate in the second quarter of 2012; approximately $50 million from decreased production volume and risk retirements on the F-22 program partially offset by a resolution of a contractual matter in the second quarter of 2012; and approximately $45 million primarily due to a decrease in risk retirements on other sustainment activities partially offset by various other Aeronautics programs due to increased risk retirements and volume. Operating profit for C-5 programs was comparable to 2011. Adjustments not related to volume, including net profit booking rate adjustments and other matters described above, were approximately $30 million lower for 2012 compared to 2011. Backlog Backlog decreased in 2013 compared to 2012 mainly due to lower orders on F-16, C-5, and C-130 programs, partially offset by higher orders on the F-35 program. Backlog decreased in 2012 compared to 2011 mainly due to lower orders on F-35 and C-130 programs, partially offset by higher orders on F-16 programs. Trends We expect Aeronautics’ net sales to increase in 2014 in the mid-single digit percentage range as compared to 2013 primarily due to an increase in net sales from F-35 production contracts. Operating profit is expected to increase slightly from 2013, resulting in a slight decrease in operating margins between the years due to program mix. Information Systems & Global Solutions Our IS&GS business segment provides advanced technology systems and expertise, integrated information technology solutions, and management services across a broad spectrum of applications for civil, defense, intelligence, and other government customers. IS&GS has a portfolio of many smaller contracts as compared to our other business segments. IS&GS has been impacted by the continued downturn in federal information technology budgets. IS&GS’ operating results included the following (in millions):
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Net sales</td><td>$8,367</td><td>$8,846</td><td>$9,381</td></tr><tr><td>Operating profit</td><td>759</td><td>808</td><td>874</td></tr><tr><td>Operating margins</td><td>9.1%</td><td>9.1%</td><td>9.3%</td></tr><tr><td>Backlog at year-end</td><td>8,300</td><td>8,700</td><td>9,300</td></tr></table>
2013 compared to 2012 IS&GS’ net sales decreased $479 million, or 5%, for 2013 compared to 2012. The decrease was attributable to lower net sales of about $495 million due to decreased volume on various programs (command and control programs for classified customers, NGI, and ERAM programs); and approximately $320 million due to the completion of certain programs (such as Total Information Processing Support Services, the Transportation Worker Identification Credential (TWIC), and ODIN). The decrease was partially offset by higher net sales of about $340 million due to the start-up of certain programs (such as the DISA GSM-O and the National Science Foundation Antarctic Support). IS&GS’ operating profit decreased $49 million, or 6%, for 2013 compared to 2012. The decrease was primarily attributable to lower operating profit of about $55 million due to certain programs nearing the end of their lifecycles, partially offset by higher operating profit of approximately $15 million due to the start-up of certain programs. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were comparable for 2013 compared to 2012.2012 compared to 2011 IS&GS’ net sales for 2012 decreased $535 million, or 6%, compared to 2011. The decrease was attributable to lower net sales of approximately $485 million due to the substantial completion of various programs during 2011 (primarily JTRS; ODIN; and U. K. Census); and about $255 million due to lower volume on numerous other programs (primarily Hanford; The table below provides information on the location and pretax gain or loss amounts for derivatives that are: (i) designated in a fair value hedging relationship, (ii) designated in a cash flow hedging relationship, (iii) designated in a foreign currency net investment hedging relationship and (iv) not designated in a hedging relationship
<table><tr><td><i>Years Ended December 31</i></td><td>2011</td><td>2010</td></tr><tr><td><i>Derivatives designated in fair value hedging relationships</i></td><td></td><td></td></tr><tr><td>Interest rate swap contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>on derivatives</td><td>$-196</td><td>$-23</td></tr><tr><td>Amount of loss recognized in<i>Other (income) expense, net</i>on hedged item</td><td>196</td><td>23</td></tr><tr><td><i>Derivatives designated in foreign currency cash flow hedging relationships</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of loss reclassified from<i>AOCI</i>to<i>Sales</i></td><td>85</td><td>7</td></tr><tr><td>Amount of loss (gain) recognized in<i>OCI</i>on derivatives</td><td>143</td><td>-103</td></tr><tr><td><i>Derivatives designated in foreign currency net investment hedging relationships</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>onderivatives<i><sup>(1)</sup></i></td><td>-10</td><td>-1</td></tr><tr><td>Amount of loss recognized in<i>OCI</i>on deriviatives</td><td>122</td><td>24</td></tr><tr><td><i>Derivatives not designated in a hedging relationship</i></td><td></td><td></td></tr><tr><td>Foreign exchange contracts</td><td></td><td></td></tr><tr><td>Amount of gain recognized in<i>Other (income) expense, net</i>onderivatives<i><sup>(2)</sup></i></td><td>-113</td><td>-33</td></tr><tr><td>Amount of gain recognized in<i>Sales</i></td><td>—</td><td>-81</td></tr></table>
(1) There was no ineffectiveness on the hedge. Represents the amount excluded from hedge effectiveness testing. (2) These derivative contracts mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. At December 31, 2011, the Company estimates $18 million of pretax net unrealized losses on derivatives maturing within the next 12 months that hedge foreign currency denominated sales over that same period will be reclassified from AOCI to Sales. The amount ultimately reclassified to Sales may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity. Investments in Debt and Equity Securities Information on available-for-sale investments at December 31 is as follows:
<table><tr><td></td><td colspan="4"> 2011</td><td colspan="4">2010</td></tr><tr><td></td><td></td><td></td><td colspan="2"> Gross Unrealized</td><td></td><td></td><td colspan="2">Gross Unrealized</td></tr><tr><td></td><td> Fair Value</td><td> Amortized Cost</td><td> Gains</td><td> Losses</td><td>Fair Value</td><td>Amortized Cost</td><td>Gains</td><td>Losses</td></tr><tr><td>Corporate notes and bonds</td><td>$2,032</td><td>$2,024</td><td>$16</td><td>$-8</td><td>$1,133</td><td>$1,124</td><td>$12</td><td>$-3</td></tr><tr><td>Commercial paper</td><td>1,029</td><td>1,029</td><td>—</td><td>—</td><td>1,046</td><td>1,046</td><td>—</td><td>—</td></tr><tr><td>U.S. government and agency securities</td><td>1,021</td><td>1,018</td><td>3</td><td>—</td><td>500</td><td>501</td><td>1</td><td>-2</td></tr><tr><td>Municipal securities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>361</td><td>359</td><td>4</td><td>-2</td></tr><tr><td>Asset-backed securities</td><td>292</td><td>292</td><td>1</td><td>-1</td><td>171</td><td>170</td><td>1</td><td>—</td></tr><tr><td>Mortgage-backed securities</td><td>223</td><td>223</td><td>1</td><td>-1</td><td>112</td><td>108</td><td>5</td><td>-1</td></tr><tr><td>Foreign government bonds</td><td>72</td><td>72</td><td>—</td><td>—</td><td>10</td><td>10</td><td>—</td><td>—</td></tr><tr><td>Other debt securities</td><td>3</td><td>1</td><td>2</td><td>—</td><td>3</td><td>1</td><td>2</td><td>—</td></tr><tr><td>Equity securities</td><td>397</td><td>383</td><td>14</td><td>—</td><td>321</td><td>295</td><td>34</td><td>-8</td></tr><tr><td></td><td>$5,069</td><td>$5,042</td><td>$37</td><td>$-10</td><td>$3,657</td><td>$3,614</td><td>$59</td><td>$-16</td></tr></table>
Available-for-sale debt securities included in Short-term investments totaled $1.4 billion at December 31, 2011. Of the remaining debt securities, $2.9 billion mature within five years. At December 31, 2011, there were no debt securities pledged as collateral. The table below provides a summary of the changes in fair value of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
<table><tr><td><i>Years Ended December 31</i></td><td>2011</td><td>2010</td></tr><tr><td>Beginning balance January 1</td><td>$13</td><td>$72</td></tr><tr><td>Sales</td><td>-13</td><td>-67</td></tr><tr><td>Total realized and unrealized gains (losses)Included in:</td><td></td><td></td></tr><tr><td>Earnings<i><sup>-1</sup></i></td><td>—</td><td>18</td></tr><tr><td>Comprehensive income</td><td>—</td><td>-10</td></tr><tr><td>Ending balance December 31</td><td>$—</td><td>$13</td></tr><tr><td>Losses recorded in earnings for Level 3 assets still held atDecember 31</td><td>$—</td><td>$—</td></tr></table>
(1) Amounts are recorded in Other (income) expense, net. Financial Instruments Not Measured at Fair Value Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables. The estimated fair value of loans payable and long-term debt (including current portion) at December 31, 2011 was $19.5 billion compared with a carrying value of $17.5 billion and at December 31, 2010 was $18.7 billion compared with a carrying value of $17.9 billion. Fair value was estimated using quoted dealer prices. Concentrations of Credit Risk On an ongoing basis, the Company monitors concentrations of credit risk associated with corporate and government issuers of securities and financial institutions with which it conducts business. Credit exposure limits are established to limit a concentration with any single issuer or institution. Cash and investments are placed in instruments that meet high credit quality standards, as specified in the Company’s investment policy guidelines. Approximately three-quarters of the Company’s cash and cash equivalents are invested in three highly rated money market funds. The majority of the Company’s accounts receivable arise from product sales in the United States and Europe and are primarily due from drug wholesalers and retailers, hospitals, government agencies, managed health care providers and pharmacy benefit managers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. The Company also continues to monitor economic conditions, including the volatility associated with international sovereign economies, and associated impacts on the financial markets and its business, taking into consideration the global economic downturn and the sovereign debt issues in certain European countries. The Company continues to monitor the credit and economic conditions within Greece, Spain, Italy and Portugal, among other members of the EU. These deteriorating economic conditions, as well as inherent variability of timing of cash receipts, have resulted in, and may continue to result in, an increase in the average length of time that it takes to collect accounts receivable outstanding. As such, time value of money discounts have been recorded for those customers for which collection of accounts receivable is expected to be in excess of one year. The Company does not expect to have write-offs or adjustments to accounts receivable which would have a material adverse effect on its financial position, liquidity or results of operations. As of December 31, 2011, the Company’s accounts receivable in Greece, Italy, Spain and Portugal totaled approximately $1.6 billion. Of this amount, hospital and public sector receivables were approximately $1.1 billion in the aggregate, of which approximately 8%, 36%, 47% and 9% related to Greece, Italy, Spain and Portugal, respectively. As of December 31, 2011, the Company’s total accounts receivable outstanding for more than one year were approximately $400 million, of which approximately 90% related to accounts receivable in Greece, Italy, Spain and Portugal, mostly comprised of hospital and public sector receivables. Other Animal Health Animal Health includes pharmaceutical and vaccine products for the prevention, treatment and control of disease in all major farm and companion animal species. Animal Health sales are affected by intense competition and the frequent introduction of generic products. Global sales of Animal Health products grew 11% in 2011 to $3.3 billion from $2.9 billion in 2010. Foreign exchange favorably affected global sales performance by 3% in 2011. The increase in sales was driven by positive performance among cattle, swine, poultry and companion animal products. Global sales of Animal Health products were $494 million for the post-Merger period in 2009. Consumer Care Consumer Care products include over-the-counter, foot care and sun care products such as Claritin non-drowsy antihistamines; Dr. Scholl’s foot care products; Coppertone sun care products; and MiraLAX, a treatment for occasional constipation. Global sales of Consumer Care products increased 1% in 2011 to $1.8 billion reflecting strong performance of Coppertone, offset by declines in Dr. Scholl’s and Claritin. Consumer Care product sales were $149 million for the post-Merger period in 2009. Consumer Care product sales are affected by competition and consumer spending patterns. Alliances AstraZeneca has an option to buy Merck’s interest in a subsidiary, and through it, Merck’s interest in Nexium and Prilosec, exercisable in 2012, and the Company believes that it is likely that AstraZeneca will exercise that option (see “Selected Joint Venture and Affiliate Information” below). If AstraZeneca exercises its option, the Company will no longer record equity income from AZLP and supply sales to AZLP will decline substantially. |
1.19323 | In the year with largest amount of advertising, what's the increasing rate of total revenues? (in %) | NEWS CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Contract liabilities and assets The Company’s deferred revenue balance primarily relates to amounts received from customers for subscriptions paid in advance of the services being provided. The following table presents changes in the deferred revenue balance for the fiscal year ended June 30, 2019:
<table><tr><td></td><td>For the fiscal year ended June 30, 2019 (in millions)</td></tr><tr><td>Balance as of July 1, 2018</td><td>$510</td></tr><tr><td>Deferral of revenue</td><td>3,008</td></tr><tr><td>Recognition of deferred revenue<sup>(a)</sup></td><td>-3,084</td></tr><tr><td>Other</td><td>-6</td></tr><tr><td>Balance as of June 30, 2019</td><td>$428</td></tr></table>
(a) For the fiscal year ended June 30, 2019, the Company recognized approximately $493 million of revenue which was included in the opening deferred revenue balance. Contract assets were immaterial for disclosure as of June 30, 2019. Practical expedients The Company typically expenses sales commissions incurred to obtain a customer contract as those amounts are incurred as the amortization period is 12 months or less. These costs are recorded within Selling, general and administrative in the Statements of Operations. The Company also applies the practical expedient for significant financing components when the transfer of the good or service is paid within 12 months or less, or the receipt of consideration is received within 12 months or less of the transfer of the good or service. Other revenue disclosures During the fiscal year ended June 30, 2019, the Company recognized approximately $316 million in revenues related to performance obligations that were satisfied or partially satisfied in a prior reporting period. The remaining transaction price related to unsatisfied performance obligations as of June 30, 2019 was approximately $354 million, of which approximately $182 million is expected to be recognized during fiscal 2020, approximately $129 million is expected to be recognized in fiscal 2021, $35 million is expected to be recognized in fiscal 2022, $5 million is expected to be recognized in fiscal 2023, with the remainder to be recognized thereafter. These amounts do not include (i) contracts with an expected duration of one year or less, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage and (iii) variable consideration allocated to performance obligations accounted for under the series guidance that meets the allocation objective under ASC 606. NOTE 4. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS Fiscal 2019 Opcity In October 2018, the Company acquired Opcity, a market-leading real estate technology platform that matches qualified home buyers and sellers with real estate professionals in real time. The total transaction value was approximately $210 million, consisting of approximately $182 million in cash, net of $7 million of cash The following table provides information regarding key properties within News Corp Australia’s portfolio:
<table><tr><td></td><td> Average Daily Paid Print Circulation<sup>-1</sup></td><td> Total Paid Subscribers for Combined Masthead (Print and Digital)<sup>(2)</sup></td><td> Total Monthly Audience for Combined Masthead (Print and Digital)<sup>(3)</sup></td></tr><tr><td><i>The Australian (Mon – Fri)</i></td><td>83,684</td><td>164,968</td><td>3.7 million</td></tr><tr><td><i>The Weekend Australian (Sat)</i></td><td>207,837</td><td></td><td></td></tr><tr><td><i>The Daily Telegraph (Mon – Sat)</i></td><td>167,785</td><td>87,560</td><td>4.3 million</td></tr><tr><td><i>The Sunday Telegraph</i></td><td>299,352</td><td></td><td></td></tr><tr><td><i>Herald Sun (Mon – Sat)</i></td><td>245,255</td><td>107,816</td><td>4.1 million</td></tr><tr><td><i>Sunday Herald Sun</i></td><td>295,514</td><td></td><td></td></tr><tr><td><i>The Courier Mail (Mon – Sat)</i></td><td>104,879</td><td>81,949</td><td>2.5 million</td></tr><tr><td><i>The Sunday Mail</i></td><td>228,467</td><td></td><td></td></tr><tr><td><i>The Advertiser (Mon – Sat)</i></td><td>97,173</td><td>81,167</td><td>1.8 million</td></tr><tr><td><i>Sunday Mail</i></td><td>153,496</td><td></td><td></td></tr></table>
(1) For the year ended June 30, 2019, based on internal sources. (2) As of June 30, 2019, based on internal sources. (3) Based on Enhanced Media Metrics Australia (“EMMA”) average monthly print readership data for the year ended May 31, 2019 and Nielsen desktop, mobile and tablet audience data for May 2019. EMMA data incorporates more frequent sampling and combines both online usage derived from Nielsen data and print usage into a single metric that removes any audience overlap. News Corp Australia’s broad portfolio of digital properties also includes news. com. au, the leading general interest site in Australia that provides breaking news, finance, entertainment, lifestyle, technology and sports news and delivers an average monthly unique audience of approximately 9.9 million based on Nielsen monthly total audience ratings for the year ended June 30, 2019. In addition, News Corp Australia owns other premier properties such as taste. com. au, a leading food and recipe site, and kidspot. com. au, a leading parenting website, as well as various other digital media assets. As of June 30, 2019, News Corp Australia’s other assets included a 14.6% interest in HT&E Limited, which operates a portfolio of Australian radio and outdoor media assets, and a 30.2% interest in Hipages Group Pty Ltd. , which operates a leading on-demand home improvement services marketplace. News UK News UK publishes The Sun, The Sun on Sunday, The Times and The Sunday Times, which are leading newspapers in the U. K that together accounted for approximately one-third of all national newspaper sales as of June 30, 2019. The Sun is the most read national paid print news brand in the U. K. , and The Times and The Sunday Times are the most read national newspapers in the U. K. quality market. Together, across print and digital, these brands now reach two-thirds of adult news readers in the U. K. , or approximately 32 million people, based on PAMCo data for the year ended March 31, 2019. News UK’s newspapers (except some Saturday and Sunday supplements) are printed at News UK’s world-class printing facilities in England, Scotland and Ireland. In addition to revenue from advertising, circulation and subscription sales for its print and digital products, News UK generates revenue by providing third party printing services through these facilities and is one of the largest contract printers in the U. K. News UK also distributes content through its digital platforms, including its websites, thesun. co. uk, thetimes. co. uk and thesundaytimes. co. uk, as well as mobile and tablet apps. News UK’s online and mobile offerings during the year included the rights to show English Premier League Football match fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $99 million, or 7%, for the fiscal year ended June 30, 2019 as compared to fiscal 2018. Advertising revenues decreased $65 million, primarily due to the $56 million negative impact of foreign currency fluctuations and the $52 million impact of weakness in the print advertising market, partially offset by the $26 million increase due to digital advertising growth and a $20 million increase from the acquisition of an integrated content marketing agency. Circulation and subscription revenues decreased $21 million primarily due to the $32 million negative impact of foreign currency fluctuations and print volume declines, partially offset by the impact of the adoption of the new revenue recognition standard, cover price increases and digital subscriber growth. News UK Revenues were $1,032 million for the fiscal year ended June 30, 2019, a decrease of $44 million, or 4%, as compared to fiscal 2018 revenues of $1,076 million. The decrease was due in part to lower Advertising revenues of $28 million, primarily due to weakness in the print advertising market and the $12 million negative impact of foreign currency fluctuations. Circulation and subscription revenues decreased $27 million, primarily due to single-copy volume declines, mainly at The Sun, and the $22 million negative impact of foreign currency fluctuations, partially offset by the impact of cover price increases across mastheads. The decrease was partially offset by higher Other revenues of $11 million, mainly due to the $38 million net benefit related to the exit from the partnership for Sun Bets in the first quarter of fiscal 2019, partially offset by lower brand partnership revenues. The impact of foreign currency fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $40 million, or 4%, for the fiscal year ended June 30, 2019 as compared to fiscal 2018. News America Marketing Revenues at News America Marketing were $895 million for the fiscal year ended June 30, 2019, a decrease of $61 million, or 6%, as compared to fiscal 2018 revenues of $956 million. The decrease was primarily related to $67 million of lower home delivered revenues, which include free-standing insert products, mainly due to lower volume. Subscription Video Services (22% and 11% of the Company’s consolidated revenues in fiscal 2019 and 2018, respectively)
<table><tr><td></td><td colspan="4"> For the fiscal years ended June 30,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>Change</td><td> % Change</td></tr><tr><td> (in millions, except %)</td><td></td><td></td><td colspan="2"> Better/(Worse)</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td></tr><tr><td>Circulation and subscription</td><td>$1,926</td><td>$850</td><td>$1,076</td><td>**</td></tr><tr><td>Advertising</td><td>215</td><td>127</td><td>88</td><td>69%</td></tr><tr><td>Other</td><td>61</td><td>27</td><td>34</td><td>**</td></tr><tr><td> Total Revenues</td><td>2,202</td><td>1,004</td><td>1,198</td><td> **</td></tr><tr><td>Operating expenses</td><td>-1,476</td><td>-654</td><td>-822</td><td>**</td></tr><tr><td>Selling, general and administrative</td><td>-346</td><td>-177</td><td>-169</td><td>-95%</td></tr><tr><td> Segment EBITDA</td><td>$380</td><td>$173</td><td>$207</td><td> **</td></tr></table>
** not meaningful For the fiscal year ended June 30, 2019, revenues at the Subscription Video Services segment increased $1,198 million and Segment EBITDA increased $207 million, as compared to fiscal 2018. The revenue and Segment EBITDA increases were primarily due to the Transaction, which contributed $1,289 million of revenue and $236 million of Segment EBITDA during the fiscal year ended June 30, 2019. The impact of foreign currency fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $74 million for the fiscal year ended June 30, 2019 as compared to fiscal 2018. See the “Results of Operations—Fiscal 2019 (as reported) versus Fiscal 2018 (pro forma)” section below for additional details. AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The 7.50% Notes mature on May 1, 2012 and interest is payable semi-annually in arrears on May 1 and November 1 each year beginning May 1, 2004. The Company may redeem the 7.50% Notes after May 1, 2008. The initial redemption price on the 7.50% Notes is 103.750% of the principal amount, subject to a ratable decline after May 1 of the following year to 100% of the principal amount in 2010 and thereafter. The Company may also redeem up to 35% of the 7.50% Notes any time prior to February 1, 2007 (at a price equal to 107.50% of the principal amount of the notes plus accrued and unpaid interest, if any), with the net cash proceeds of certain public equity offerings within sixty days after the closing of any such offering. The 7.50% Notes rank equally with the 5.0% convertible notes and its 93?8% Notes and are structurally and effectively junior to indebtedness outstanding under the credit facilities, the ATI 12.25% Notes and the ATI 7.25% Notes. The indenture for the 7.50% Notes contains certain covenants that restrict the Company’s ability to incur more debt; guarantee indebtedness; issue preferred stock; pay dividends; make certain investments; merge, consolidate or sell assets; enter into transactions with affiliates; and enter into sale leaseback transactions.6.25% Notes Redemption—In February 2004, the Company completed the redemption of all of its outstanding $212.7 million principal amount of 6.25% Notes. The 6.25% Notes were redeemed pursuant to the terms of the indenture at 102.083% of the principal amount plus unpaid and accrued interest. The total aggregate redemption price was $221.9 million, including $4.8 million in accrued interest. The Company will record a charge of $7.1 million in the first quarter of 2004 from the loss on redemption and write-off of deferred financing fees. Other Debt Repurchases—From January 1, 2004 to March 11, 2004, the Company repurchased $36.2 million principal amount of its 5.0% Notes for approximately $36.1 million in cash and made a $21.0 million voluntary prepayment of term loan A under its credit facilities. Giving effect to the issuance of the 7.50% Notes and the use of the net proceeds to redeem all of the outstanding 6.25% Notes; repurchases of $36.2 million principal amount of the 5.0% Notes; and a voluntary prepayment of $21.0 million of the term A loan under the credit facilities; the Company’s aggregate principal payments of longterm debt, including capital leases, for the next five years and thereafter are as follows (in thousands):
<table><tr><td>2004</td><td>$73,684</td></tr><tr><td>2005</td><td>109,435</td></tr><tr><td>2006</td><td>145,107</td></tr><tr><td>2007</td><td>688,077</td></tr><tr><td>2008</td><td>808,043</td></tr><tr><td>Thereafter</td><td>1,875,760</td></tr><tr><td>Total cash obligations</td><td>3,700,106</td></tr><tr><td>Accreted value of original issue discount of the ATI 12.25% Notes</td><td>-339,601</td></tr><tr><td>Accreted value of the related warrants</td><td>-44,247</td></tr><tr><td>Total</td><td>$3,316,258</td></tr></table>
ATC Mexico Holding—In January 2004, Mr. Gearon exercised his previously disclosed right to require the Company to purchase his 8.7% interest in ATC Mexico. Giving effect to the January 2004 exercise of options described below, the Company owns an 88% interest in ATC Mexico, which is the subsidiary through which the Company conducts its Mexico operations. The purchase price for Mr. Gearon’s interest in ATC Mexico is subject to review by an independent financial advisor, and is payable in cash or shares of the Company’s Class A common stock, at the Company’s option. The Company intends to pay the purchase price in shares of its Class A common stock, and closing is expected to occur in the second quarter of 2004. In addition, the Company expects that payment of a portion of the purchase price will be contingent upon ATC Mexico meeting certain performance objectives. Note Redemptions and Repurchases. During 2004, we repurchased and redeemed approximately $1.5 billion in debt securities as follows (in millions):
<table><tr><td> Debt Security</td><td> Date </td><td> Principal Amount </td><td> Aggregate Price </td></tr><tr><td> Redemptions</td><td></td><td></td><td></td></tr><tr><td>6.25% Convertible Notes due 2009</td><td>February 2004</td><td>$212.7</td><td>$217.2</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td>September 2004</td><td>337.0</td><td>360.8</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td>November 2004</td><td>276.0</td><td>293.2</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009 -1</td><td>January 2005</td><td>133.0</td><td>139.8</td></tr><tr><td> Repurchases</td><td></td><td></td><td></td></tr><tr><td>ATI 12.25% Senior Subordinated Discount Notes due 2008 -2</td><td></td><td>309.7</td><td>230.9</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td></td><td>112.1</td><td>118.9</td></tr><tr><td>5.0% Convertible Notes due 2010</td><td></td><td>73.7</td><td>73.3</td></tr><tr><td>Total</td><td></td><td>$1,454.2</td><td>$1,434.1</td></tr></table>
(1) On December 6, 2004, we issued a notice for the partial redemption on January 5, 2005 of our 93?8% senior notes due 2009. Pursuant to the indenture for the 93?8% senior notes, once a notice to redeem is issued, notes called for redemption become irrevocably due and payable on the redemption date. (2) The repurchased amount of $309.7 million represents the face amount at maturity in 2008. On the date of repurchase, such amount had an accreted value of $179.4 million, net of $14.7 million fair value allocated to warrants. ?6.25% Convertible Notes Redemption. In February 2004, we used a portion of the net proceeds from our 7.50% senior notes offering to redeem all of our outstanding $212.7 million principal amount of 6.25% convertible notes. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 102.083% of the principal amount, plus accrued and unpaid interest. We redeemed these notes for $217.2 million, plus $4.8 million in accrued interest. ?93?8% Senior Notes Redemptions. In September 2004, November 2004 and January 2005, we completed the redemption of an aggregate of $746.0 million principal amount of our outstanding 93?8% senior notes due 2009, as follows. On September 20, 2004, we redeemed $337.0 million principal amount of our outstanding 93?8% senior notes using the net proceeds from our 3.00% convertible notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 107.07% of the principal amount, for $360.8 million, plus $4.3 million in accrued interest. On November 4, 2004, we redeemed $276.0 million principal amount of our outstanding 93?8% senior notes using the net proceeds from our October 2004 7.125% senior notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 106.23% of the principal amount, for $293.2 million, plus $6.7 million in accrued interest. On January 5, 2005, we redeemed $133.0 million principal amount of our outstanding 93?8% senior notes using a portion of net proceeds from our December 2004 7.125% senior notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 105.11% of the principal amount, for $139.8 million, plus $5.3 million in accrued interest. ? Other Debt Repurchases. During the year ended December 31, 2004, in addition to the redemptions discussed above, we repurchased, in privately negotiated transactions, primarily using cash on hand (i) an aggregate of $309.7 million face amount of our ATI 12.25% senior subordinated discount notes ($179.4 million accreted value, net of $14.7 million fair value allocated to warrants) for approximately $230.9 million in cash; (ii) $112.1 million principal amount of our 93?8% senior notes for $118.9 million in cash; and (iii) $73.7 million principal amount of our 5.0% convertible notes for approximately $73.3 million in cash. From December 31, 2004 to March 25, 2005, we repurchased an aggregate of $37.0 million face amount of our ATI 12.25% senior subordinated discount notes ($22.6 million accreted value, net of $1.6 million fair value allocated to warrants) for approximately $27.9 million in cash. AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) credit facilities which the Company has designated as cash flow hedges. The eight American Tower swaps have an aggregate notional amount of $450.0 million and fixed rates ranging between 4.63% and 4.88% and the two SpectraSite swaps have an aggregate notional amount of $100.0 million and a fixed rate of 4.95%. In August 2005, and as a result of the merger with SpectraSite, Inc. , the Company acquired three interest rate swap instruments and one interest rate cap instrument. The three interest rate swaps, which had a fair value of $6.7 million at the date of acquisition, have an aggregate notional amount of $300.0 million, a fixed rate of 3.88% and expire in December 2009. The interest rate cap had a notional amount of $175.0 million, a fixed rate of 7.0%, and expired in February 2006. The interest rate swaps and the interest rate cap were not designated as cash flow hedges. The Company recorded $(0.2) million and $3.0 million of (expense) income, representing changes in fair market value which were charged to other income (expense) in the consolidated statements of operations for the years ended December 31, 2006 and 2005, respectively. During the fourth quarter of 2006, the Company entered into four forward starting interest rate swap agreements to manage exposure to variability in cash flows relating to forecasted interest payments in connection with the likely issuance of new fixed rate debt that the Company expects to issue on or before July 31, 2007. The swaps have been designated as cash flow hedges, have an aggregate notional amount of $900.0 million, fixed rates ranging between 4.73% and 5.10% and will be terminated upon issuance of new fixed rate debt. The Company is exposed to market risk for decreases in interest rates until termination of the swap and if it fails to issue such new fixed rate debt on or before such date. As of December 31, 2006, the Company expected to receive the fair value of these swap agreements of approximately $3.8 million. As of December 31, 2006, the Company would be required to pay approximately $19.1 million in cash upon settlement of the swaps if a 10% decline, or approximately 50 basis points, in interest rates were to occur from the fixed rate of the swaps between the issuance date and the settlement date of the swaps. In February 2007, the Company entered into two additional forward starting interest rate swap agreements. (See note 19. ) As of December 31, 2006, the carrying amounts of the Company’s derivative financial instruments, along with the estimated fair values of the related assets reflected in notes receivable and other long-term assets and (liabilities) reflected in other long-term liabilities in the accompanying consolidated balance sheet, are as follows (in thousands):
<table><tr><td> Derivative</td><td> Notional Amount </td><td> Interest Range</td><td> Term </td><td> Carrying Amount and Fair Value </td></tr><tr><td>Interest rate swaps</td><td>$450,000</td><td>4.63%-4.88%</td><td>Expiring in 2010</td><td>$4,143</td></tr><tr><td>Interest rate swaps</td><td>100,000</td><td>4.95%</td><td>Expiring in 2010</td><td>213</td></tr><tr><td>Interest rate swaps</td><td>300,000</td><td>3.88%</td><td>Expiring in 2009</td><td>9,471</td></tr><tr><td>Forward starting interest rate swap agreements</td><td>900,000</td><td>4.73%-5.10%</td><td>Expiring in 2012</td><td>3,753</td></tr><tr><td>Interest rate cap</td><td>25,000</td><td>8.0%</td><td>Expiring in 2007</td><td></td></tr><tr><td>Total</td><td></td><td></td><td></td><td>$17,580</td></tr></table>
During the year ended December 31, 2006, the Company recorded a net unrealized gain of approximately $6.5 million (net of a tax provision of approximately $3.5 million) in other comprehensive loss for the change in fair value of interest rate swaps designated as cash flow hedges and reclassified $0.7 million (net of an income tax benefit of $0.2 million) into results of operations during the year ended December 31, 2006. During the year ended December 31, 2005, the Company recorded a net unrealized loss of approximately $0.8 million (net of a ITEM 6. SELECTED FINANCIAL DATA You should read the selected financial data in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited consolidated financial statements and the related notes to those consolidated financial statements included in this Annual Report. Our continuing operations are reported in two segments: rental and management and network development services. In accordance with generally accepted accounting principles, the consolidated statements of operations for all periods presented in this “Selected Financial Data” have been adjusted to reflect certain businesses as discontinued operations (see note 1 to our consolidated financial statements included in this Annual Report). Year-over-year comparisons are significantly affected by our acquisitions, dispositions and, to a lesser extent, construction of towers. Our August 2005 merger with SpectraSite, Inc. significantly impacts the comparability of reported results between periods.
<table><tr><td></td><td colspan="5">Year Ended December 31,</td></tr><tr><td></td><td>2008</td><td>2007</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td></td><td colspan="5">(In thousands, except per share data)</td></tr><tr><td> Statements of Operations Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>$1,547,035</td><td>$1,425,975</td><td>$1,294,068</td><td>$929,762</td><td>$684,422</td></tr><tr><td>Network development services</td><td>46,469</td><td>30,619</td><td>23,317</td><td>15,024</td><td>22,238</td></tr><tr><td>Total operating revenues</td><td>1,593,504</td><td>1,456,594</td><td>1,317,385</td><td>944,786</td><td>706,660</td></tr><tr><td>Operating expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs of operations (exclusive of items shown separately below)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>363,024</td><td>343,450</td><td>332,246</td><td>247,781</td><td>195,242</td></tr><tr><td>Network development services</td><td>26,831</td><td>16,172</td><td>11,291</td><td>8,346</td><td>16,220</td></tr><tr><td>Depreciation, amortization and accretion</td><td>405,332</td><td>522,928</td><td>528,051</td><td>411,254</td><td>329,449</td></tr><tr><td>Selling, general, administrative and development expense</td><td>180,374</td><td>186,483</td><td>159,324</td><td>108,059</td><td>83,094</td></tr><tr><td>Impairments, net loss on sale of long-lived assets, restructuring and merger related expense</td><td>11,189</td><td>9,198</td><td>2,572</td><td>34,232</td><td>23,876</td></tr><tr><td>Total operating expenses</td><td>986,750</td><td>1,078,231</td><td>1,033,484</td><td>809,672</td><td>647,881</td></tr><tr><td>Operating income</td><td>606,754</td><td>378,363</td><td>283,901</td><td>135,114</td><td>58,779</td></tr><tr><td>Interest income, TV Azteca, net</td><td>14,253</td><td>14,207</td><td>14,208</td><td>14,232</td><td>14,316</td></tr><tr><td>Interest income</td><td>3,413</td><td>10,848</td><td>9,002</td><td>4,402</td><td>4,844</td></tr><tr><td>Interest expense</td><td>-253,584</td><td>-235,824</td><td>-215,643</td><td>-222,419</td><td>-262,237</td></tr><tr><td>Loss on retirement of long-term obligations</td><td>-4,904</td><td>-35,429</td><td>-27,223</td><td>-67,110</td><td>-138,016</td></tr><tr><td>Other income (expense)</td><td>5,988</td><td>20,675</td><td>6,619</td><td>227</td><td>-2,798</td></tr><tr><td>Income (loss) before income taxes, minority interest and income (loss) on equity method investments</td><td>371,920</td><td>152,840</td><td>70,864</td><td>-135,554</td><td>-325,112</td></tr><tr><td>Income tax (provision) benefit</td><td>-135,509</td><td>-59,809</td><td>-41,768</td><td>-5,714</td><td>83,338</td></tr><tr><td>Minority interest in net earnings of subsidiaries</td><td>-169</td><td>-338</td><td>-784</td><td>-575</td><td>-2,366</td></tr><tr><td>Income (loss) on equity method investments</td><td>22</td><td>19</td><td>26</td><td>-2,078</td><td>-2,915</td></tr><tr><td>Income (loss) from continuing operations before cumulative effect of change in accounting principle</td><td>$236,264</td><td>$92,712</td><td>$28,338</td><td>$-143,921</td><td>$-247,055</td></tr><tr><td>Basic income (loss) per common share from continuing operations before cumulative effect of change in accounting principle(1)</td><td>$0.60</td><td>$0.22</td><td>$0.06</td><td>$-0.47</td><td>$-1.10</td></tr><tr><td>Diluted income (loss) per common share from continuing operations before cumulative effect of change in accountingprinciple(1)</td><td>$0.58</td><td>$0.22</td><td>$0.06</td><td>$-0.47</td><td>$-1.10</td></tr><tr><td>Weighted average common shares outstanding-1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>395,947</td><td>413,167</td><td>424,525</td><td>302,510</td><td>224,336</td></tr><tr><td>Diluted</td><td>418,357</td><td>426,079</td><td>436,217</td><td>302,510</td><td>224,336</td></tr><tr><td> Other Operating Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ratio of earnings to fixed charges-2</td><td>2.12x</td><td>1.50x</td><td>1.25x</td><td>—</td><td>—</td></tr></table> |
181 | What do all Benefits earned during the year sum up, excluding those negative ones in 2010 for Pension plans ? (in million) | 9. RETIREMENT BENEFITS The Company has several non-contributory defined benefit pension plans covering certain U. S. employees and has various defined benefit pension and termination indemnity plans covering employees outside the United States. The U. S. qualified defined benefit plan provides benefits under a cash balance formula. However, employees satisfying certain age and service requirements remain covered by a prior final average pay formula under that plan. Effective January1, 2008, the U. S. qualified pension plan was frozen for most employees. Accordingly, no additional compensation-based contributions were credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered Net (Benefit) Expense under the prior final pay plan formula continue to accrue benefits. The Company also offers postretirement health care and life insurance benefits to certain eligible U. S. retired employees, as well as to certain eligible employees outside the United States. The following tables summarize the components of net (benefit) expense recognized in the Consolidated Statement of Income and the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s U. S. qualified and nonqualified pension plans, postretirement plans and plans outside the United States. The Company uses a December31 measurement date for the U. S. plans as well as the plans outside the United States.
<table><tr><td></td><td colspan="6">Pension plans</td><td colspan="6">Postretirement benefit plans</td></tr><tr><td></td><td colspan="3">U.S. plans</td><td colspan="3">Non-U.S. plans</td><td colspan="3">U.S. plans</td><td colspan="3">Non-U.S. plans</td></tr><tr><td>In millions of dollars</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Qualified Plans</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Benefits earned during the year</td><td>$14</td><td>$18</td><td>$23</td><td>$167</td><td>$148</td><td>$201</td><td>$1</td><td>$1</td><td>$1</td><td>$23</td><td>$26</td><td>$36</td></tr><tr><td>Interest cost on benefit obligation</td><td>644</td><td>649</td><td>674</td><td>342</td><td>301</td><td>354</td><td>59</td><td>61</td><td>62</td><td>105</td><td>89</td><td>96</td></tr><tr><td>Expected return on plan assets</td><td>-874</td><td>-912</td><td>-949</td><td>-378</td><td>-336</td><td>-487</td><td>-8</td><td>-10</td><td>-12</td><td>-100</td><td>-77</td><td>-109</td></tr><tr><td>Amortization of unrecognized</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net transition obligation</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>-1</td><td>1</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Prior service cost (benefit)</td><td>-1</td><td>-1</td><td>-2</td><td>4</td><td>4</td><td>4</td><td>-3</td><td>-1</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net actuarial loss</td><td>47</td><td>10</td><td>—</td><td>57</td><td>60</td><td>24</td><td>11</td><td>2</td><td>4</td><td>20</td><td>18</td><td>21</td></tr><tr><td>Curtailment loss-1</td><td>—</td><td>47</td><td>56</td><td>13</td><td>22</td><td>108</td><td>—</td><td>—</td><td>16</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net qualified (benefit) expense</td><td>$-170</td><td>$-189</td><td>$-198</td><td>$204</td><td>$198</td><td>$205</td><td>$60</td><td>$53</td><td>$71</td><td>$48</td><td>$56</td><td>$44</td></tr><tr><td>Nonqualified (benefit) expense</td><td>$41</td><td>$41</td><td>$38</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr><tr><td>Total net (benefit) expense</td><td>$-129</td><td>$-148</td><td>$-160</td><td>$204</td><td>$198</td><td>$205</td><td>$60</td><td>$53</td><td>$71</td><td>$48</td><td>$56</td><td>$44</td></tr></table>
(1) The 2009 curtailment loss in the non-U. S pension plans includes an $18 million gain reflecting the sale of Citigroup’s Nikko operations. See Note 3 to the Consolidated Financial Statements for further discussion of the sale of Nikko operations. The estimated net actuarial loss, prior service cost and net transition obligation that will be amortized from Accumulated other comprehensive income (loss) into net expense in 2011 are approximately $147 million, $2 million and $(1) million, respectively, for defined benefit pension plans. For postretirement plans, the estimated 2011 net actuarial loss and prior service cost amortizations are approximately $41 million and $(3) million, respectively SPECIAL ASSET POOL Special Asset Pool (SAP), which constituted approximately 22% of Citi Holdings by assets as of December 31, 2010, is a portfolio of securities, loans and other assets that Citigroup intends to actively reduce over time through asset sales and portfolio run-off. At December 31, 2010, SAP had $80 billion of assets. SAP assets have declined by $248 billion, or 76%, from peak levels in 2007 reflecting cumulative write-downs, asset sales and portfolio run-off.
<table><tr><td>In millions of dollars</td><td>2010</td><td>2009</td><td>2008</td><td>% Change 2010 vs. 2009</td><td>% Change 2009 vs. 2008</td></tr><tr><td>Net interest revenue</td><td>$1,219</td><td>$2,754</td><td>$2,676</td><td>-56%</td><td>3%</td></tr><tr><td>Non-interest revenue</td><td>1,633</td><td>-6,014</td><td>-42,375</td><td>NM</td><td>86</td></tr><tr><td>Revenues, net of interest expense</td><td>$2,852</td><td>$-3,260</td><td>$-39,699</td><td>NM</td><td>92%</td></tr><tr><td>Total operating expenses</td><td>$548</td><td>$824</td><td>$893</td><td>-33%</td><td>-8%</td></tr><tr><td>Net credit losses</td><td>$2,013</td><td>$5,399</td><td>$906</td><td>-63%</td><td>NM</td></tr><tr><td>Provision (releases) for unfunded lending commitments</td><td>-76</td><td>111</td><td>-172</td><td>NM</td><td>NM</td></tr><tr><td>Credit reserve builds (releases)</td><td>-1,711</td><td>-530</td><td>2,677</td><td>NM</td><td>NM</td></tr><tr><td>Provisions for credit losses and for benefits and claims</td><td>$226</td><td>$4,980</td><td>$3,411</td><td>-95%</td><td>46%</td></tr><tr><td>Income (loss) from continuing operations before taxes</td><td>$2,078</td><td>$-9,064</td><td>$-44,003</td><td>NM</td><td>79%</td></tr><tr><td>Income taxes (benefits)</td><td>905</td><td>-3,695</td><td>-16,714</td><td>NM</td><td>78</td></tr><tr><td>Net income (loss) from continuing operations</td><td>$1,173</td><td>$-5,369</td><td>$-27,289</td><td>NM</td><td>80%</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>188</td><td>-16</td><td>-205</td><td>NM</td><td>92</td></tr><tr><td>Net income (loss)</td><td>$985</td><td>$-5,353</td><td>$-27,084</td><td>NM</td><td>80%</td></tr><tr><td>EOP assets(in billions of dollars)</td><td>$80</td><td>$136</td><td>$219</td><td>-41%</td><td>-38%</td></tr></table>
2010 vs. 2009 Revenues, net of interest expense increased $6.1 billion, primarily due to the improvement of revenue marks in 2010. Aggregate marks were negative $2.6 billion in 2009 as compared to positive marks of $3.4 billion in 2010 (see “Items Impacting SAP Revenues” below). Revenue in the current year included positive marks of $2.0 billion related to sub-prime related direct exposure, a positive $0.5 billion CVA related to the monoline insurers, and $0.4 billion on private equity positions. These positive marks were partially offset by negative revenues of $0.5 billion on Alt-A mortgages and $0.4 billion on commercial real estate. Operating expenses decreased 33% in 2010, mainly driven by the absence of the U. S. government loss-sharing agreement, lower compensation, and lower transaction expenses. Provisions for credit losses and for benefits and claims decreased $4.8 billion due to a decrease in net credit losses of $3.4 billion and a higher release of loan loss reserves and unfunded lending commitments of $1.4 billion. Assets declined 41% from the prior year, primarily driven by sales and amortization and prepayments. Asset sales of $39 billion for the year of 2010 generated pretax gains of approximately $1.3 billion.2009 vs. 2008 Revenues, net of interest expense increased $36.4 billion in 2009, primarily due to the absence of significant negative revenue marks occurring in the prior year. Total negative marks were $2.6 billion in 2009 as compared to $37.4 billion in 2008. Revenue in 2009 included positive marks of $0.8 billion on subprime-related direct exposures. These positive revenues were partially offset by negative revenues of $1.5 billion on Alt-A mortgages, $0.8 billion of write-downs on commercial real estate, and a negative $1.6 billion CVA on the monoline insurers and fair value option liabilities. Revenue was also affected by negative marks on private equity positions and write-downs on highly leveraged finance commitments. Operating expenses decreased 8% in 2009, mainly driven by lower compensation and lower volumes and transaction expenses, partially offset by costs associated with the U. S. government loss-sharing agreement exited in the fourth quarter of 2009. Provisions for credit losses and for benefits and claims increased $1.6 billion, primarily driven by $4.5 billion in increased net credit losses, partially offset by a lower provision for loan losses and unfunded lending commitments of $2.9 billion. Assets declined 38% versus the prior year, primarily driven by amortization and prepayments, sales, marks and charge-offs. Investment Securities Investment securities totaled $5,215.4 million, or 40% of total assets at December 31, 2008, and $4,650.4 million, or 36% of total assets at December 31, 2007. Debt securities, detailed below, comprised over 99% of this investment portfolio. The fair value of debt securities were as follows at December 31, 2008 and 2007:
<table><tr><td></td><td> December 31, 2008</td><td>Percentage of Total</td><td> December 31, 2007</td><td> Percentage of Total</td></tr><tr><td></td><td colspan="4"> (dollars in thousands)</td></tr><tr><td>U.S. Government and agency obligations</td><td>$1,883,378</td><td>36.2%</td><td>$984,003</td><td>21.2%</td></tr><tr><td>Tax exempt municipal securities</td><td>1,689,462</td><td>32.5%</td><td>1,864,991</td><td>40.2%</td></tr><tr><td>Mortgage and asset-backed securities</td><td>766,202</td><td>14.7%</td><td>910,662</td><td>19.6%</td></tr><tr><td>Corporate securities</td><td>841,397</td><td>16.2%</td><td>863,866</td><td>18.6%</td></tr><tr><td>Redeemable preferred stocks</td><td>19,702</td><td>0.4%</td><td>15,558</td><td>0.4%</td></tr><tr><td>Total debt securities</td><td>$5,200,141</td><td>100.0%</td><td>$4,639,080</td><td>100.0%</td></tr></table>
More than 98% of our debt securities were of investment-grade quality, with an average credit rating of AA+ by S&P at December 31, 2008. Most of the debt securities that are below investment grade are rated at the higher end (BB or better) of the non-investment grade spectrum. Our investment policy limits investments in a single issuer and requires diversification among various asset types. U. S. Government and agency obligations include $1,431.6 million at December 31, 2008 and $791.8 million at December 31, 2007 of debt securities issued by agencies of the U. S. Government including Federal National Mortgage Association, or Fannie Mae, and Federal Home Loan Mortgage Association, or Freddie Mac, whose principal payment is guaranteed by the U. S. Government. Tax exempt municipal securities included pre-refunded bonds of $694.8 million at December 31, 2008 and $182.2 million at December 31, 2007. These pre-refunded bonds are secured by an escrow fund consisting of U. S. government obligations sufficient to pay off all amounts outstanding at maturity. The ratings of these pre-refunded bonds generally assume the rating of the government obligations (AAA by S&P) at the time the fund is established. In addition, certain monoline insurers guarantee the timely repayment of bond principal and interest when a bond issuer defaults and generally provide credit enhancement for bond issues related to our tax exempt municipal securities. We have no direct exposure to these monoline insurers. We owned $452.4 million and $662.4 million at December 31, 2008 and 2007, respectively of tax exempt securities guaranteed by monoline insurers. The equivalent S&P credit rating of these tax-exempt securities without the guarantee from the monoline insurer was AA-. Our direct exposure to subprime mortgage lending is limited to investment in residential mortgage-backed securities and asset-backed securities backed by home equity loans. The fair value of securities backed by Alt-A and subprime loans was $7.6 million at December 31, 2008 and $22.0 million at December 31, 2007. There are no collateralized debt obligations or structured investment vehicles in our investment portfolio. The percentage of corporate securities associated with the financial services industry was 42.4% at December 31, 2008 and 48.4% at December 31, 2007. Duration is indicative of the relationship between changes in market value and changes in interest rates, providing a general indication of the sensitivity of the fair values of our debt securities to changes in interest rates. However, actual market values may differ significantly from estimates based on duration. The average duration of our debt securities was approximately 4.2 years at December 31, 2008. Including cash equivalents, the average duration was approximately 3.4 years. Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the fair value of our securities by approximately $229 million. |
15,810 | What is the sum of the Professional and consulting fees for Amount in the years where Depreciation and amortization is positive for Amount? (in thousand) | MARKETAXESS HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) (in thousands, except share and per share amounts) Had compensation expense for employee stock-based awards been determined based on the fair value at grant date consistent with SFAS No.123(R), the Company’s Net income (loss) for the year would have been increased or decreased to the pro forma amounts indicated below:
<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>Net income</td><td></td><td></td><td></td></tr><tr><td>As reported</td><td>$8,142</td><td>$57,587</td><td>$4,212</td></tr><tr><td>Compensation expense</td><td>1,366</td><td>1,965</td><td>1,646</td></tr><tr><td>Pro forma</td><td>$6,776</td><td>$55,622</td><td>$2,566</td></tr><tr><td>Basic net income (loss) per common share</td><td>$0.29</td><td>$6.76</td><td>$-2.20</td></tr><tr><td>Diluted net income (loss) per common share</td><td>$0.23</td><td>$1.88</td><td>$-2.20</td></tr><tr><td>Basic net income (loss) per common share — pro forma</td><td>$0.24</td><td>$6.48</td><td>$-2.70</td></tr><tr><td>Diluted net income (loss) per common share — pro forma</td><td>$0.19</td><td>$1.82</td><td>$-2.70</td></tr></table>
Basic and diluted earnings per share (“EPS”) in 2003 includes the effect of dividends accrued on our redeemable convertible preferred stock. In 2003, securities that could potentially dilute basic EPS in the future were not included in the computation of diluted EPS, because to do so would have been anti-dilutive. See Note 12, “Earnings Per Share”. Revenue Recognition The majority of the Company’s revenues are derived from commissions for trades executed on the electronic trading platform that are billed to its broker-dealer clients on a monthly basis. The Company also derives revenues from information and user access fees, license fees, interest and other income. Commissions are generally calculated as a percentage of the notional dollar volume of bonds traded on the electronic trading platform and vary based on the type and maturity of the bond traded. Under the transaction fee plans, bonds that are more actively traded or that have shorter maturities are generally charged lower commissions, while bonds that are less actively traded or that have longer maturities generally command higher commissions. Commissions are recorded on a trade date basis. The Company’s standard fee schedule for U. S. high-grade corporate bonds was revised in August 2003 to provide lower average transaction commissions for dealers who transacted higher U. S. high-grade volumes through the platform, while at the same time providing an element of fixed commissions over the two-year term of the plans. One of the revised plans that was suited for the Company’s most active broker-dealer clients included a fee cap that limited the potential growth in U. S. high-grade revenue. The fee caps were set to take effect at volume levels significantly above those being transacted at the time the revised transaction fee plans were introduced. Most broker-dealer clients entered into fee arrangements with respect to the trading of U. S. high-grade corporate bonds that included both a fixed component and a variable component. These agreements had been scheduled to expire during the third quarter of 2005. On June 1, 2005, the Company introduced a new fee plan primarily for secondary market transactions in U. S. high-grade corporate bonds executed on its electronic trading platform. As of December 31, 2005, 17 of the Company’s U. S. high-grade broker-dealer clients have signed new two-year agreements that supersede the fee arrangements that were entered into with many of its broker-dealer clients during the third quarter of 2003. The new plan incorporates higher fixed monthly fees and lower variable fees for brokerdealer clients than the previous U. S. high-grade corporate transaction fee plans described above, and incorporates volume incentives to broker-dealer clients that are designed to increase the volume of transactions effected on the Company’s The U. S. high-grade average variable transaction fee per million increased from $84 per million for the year ended December 31, 2007 to $121 per million for the year ended December 31, 2008 due to the longer maturity of trades executed on the platform, for which we charge higher commissions. The Eurobond average variable transaction fee per million decreased from $138 per million for the year ended December 31, 2007 to $112 per million for the year ended December 31, 2008, principally from the introduction of the new European high-grade fee plan. Other average variable transaction fee per million increased from $121 per million for the year ended December 31, 2007 to $158 per million for the year ended December 31, 2008 primarily due to a higher percentage of volume in products that carry higher fees per million, principally high-yield. Technology Products and Services. Technology products and services revenues increased by $7.8 million to $8.6 million for the year ended December 31, 2008 from $0.7 million for the year ended December 31, 2007. The increase was primarily a result of the Greenline acquisition. Information and User Access Fees. Information and user access fees increased by $0.1 million or 2.5% to $6.0 million for the year ended December 31, 2008 from $5.9 million for the year ended December 31, 2007. Investment Income. Investment income decreased by $1.8 million or 33.7% to $3.5 million for the year ended December 31, 2008 from $5.2 million for the year ended December 31, 2007. This decrease was primarily due to lower interest rates. Other. Other revenues decreased by $0.1 million or 4.4% to $1.5 million for the year ended December 31, 2008 from $1.6 million for the year ended December 31, 2007. Expenses Our expenses for the years ended December 31, 2008 and 2007, and the resulting dollar and percentage changes, were as follows:
<table><tr><td></td><td colspan="6">Year Ended December 31,</td></tr><tr><td></td><td colspan="2">2008</td><td colspan="2">2007</td><td></td><td></td></tr><tr><td></td><td></td><td>% of</td><td></td><td>% of</td><td>$</td><td>%</td></tr><tr><td></td><td> $</td><td>Revenues</td><td> $</td><td>Revenues</td><td>Change</td><td>Change</td></tr><tr><td></td><td colspan="6">($ in thousands)</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employee compensation and benefits</td><td>$43,810</td><td>47.1%</td><td>$43,051</td><td>46.0%</td><td>$759</td><td>1.8%</td></tr><tr><td>Depreciation and amortization</td><td>7,879</td><td>8.5</td><td>7,170</td><td>7.7</td><td>709</td><td>9.9</td></tr><tr><td>Technology and communications</td><td>8,311</td><td>8.9</td><td>7,463</td><td>8.0</td><td>848</td><td>11.4</td></tr><tr><td>Professional and consulting fees</td><td>8,171</td><td>8.8</td><td>7,639</td><td>8.2</td><td>532</td><td>7.0</td></tr><tr><td>Occupancy</td><td>2,891</td><td>3.1</td><td>3,275</td><td>3.5</td><td>-384</td><td>-11.7</td></tr><tr><td>Marketing and advertising</td><td>3,032</td><td>3.3</td><td>1,905</td><td>2.0</td><td>1,127</td><td>59.2</td></tr><tr><td>General and administrative</td><td>6,157</td><td>6.6</td><td>5,889</td><td>6.3</td><td>268</td><td>4.6</td></tr><tr><td>Total expenses</td><td>$80,251</td><td>86.2%</td><td>$76,392</td><td>81.6%</td><td>$3,859</td><td>5.1%</td></tr></table>
$43.8 million for the year ended December 31, 2008 from $43.1 million for the year ended December 31, 2007. This increase was primarily attributable to higher wages of $2.4 million, severance costs of $1.0 million and stockbased compensation expense of $1.4 million, offset by reduced incentive compensation of $3.6 million. The higher wages were primarily a result of the Greenline acquisition. The total number of employees increased to 185 as of December 31, 2008 from 182 as of December 31, 2007. As a percentage of total revenues, employee compensation and benefits expense increased to 47.1% for the year ended December 31, 2008 from 46.0% for the year ended December 31, 2007. Depreciation and Amortization. Depreciation and amortization expense increased by $0.7 million or 9.9% to $7.9 million for the year ended December 31, 2008 from $7.2 million for the year ended December 31, 2007. An increase in amortization of intangible assets of $1.3 million and the TWS impairment charge of $0.7 million were offset by a decline in depreciation and amortization of hardware and software development costs of $1.3 million. MARKETAXESS HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) of this standard had no material effect on the Company’s Consolidated Statements of Financial Condition and Consolidated Statements of Operations. Reclassifications Certain reclassifications have been made to the prior years’ financial statements in order to conform to the current year presentation. Such reclassifications had no effect on previously reported net income. On March 5, 2008, the Company acquired all of the outstanding capital stock of Greenline Financial Technologies, Inc. (“Greenline”), an Illinois-based provider of integration, testing and management solutions for FIX-related products and services designed to optimize electronic trading of fixed-income, equity and other exchange-based products, and approximately ten percent of the outstanding capital stock of TradeHelm, Inc. , a Delaware corporation that was spun-out from Greenline immediately prior to the acquisition. The acquisition of Greenline broadens the range of technology services that the Company offers to institutional financial markets, provides an expansion of the Company’s client base, including global exchanges and hedge funds, and further diversifies the Company’s revenues beyond the core electronic credit trading products. The results of operations of Greenline are included in the Consolidated Financial Statements from the date of the acquisition. The aggregate consideration for the Greenline acquisition was $41.1 million, comprised of $34.7 million in cash, 725,923 shares of common stock valued at $5.8 million and $0.6 million of acquisition-related costs. In addition, the sellers were eligible to receive up to an aggregate of $3.0 million in cash, subject to Greenline attaining certain earnout targets in 2008 and 2009. A total of $1.4 million was paid to the sellers in 2009 based on the 2008 earn-out target, bringing the aggregate consideration to $42.4 million. The 2009 earn-out target was not met. A total of $2.0 million of the purchase price, which had been deposited into escrow accounts to satisfy potential indemnity claims, was distributed to the sellers in March 2009. The shares of common stock issued to each selling shareholder of Greenline were released in two equal installments on December 20, 2008 and December 20, 2009, respectively. The value ascribed to the shares was discounted from the market value to reflect the non-marketability of such shares during the restriction period. The purchase price allocation is as follows (in thousands):
<table><tr><td>Cash</td><td>$6,406</td></tr><tr><td>Accounts receivable</td><td>2,139</td></tr><tr><td>Amortizable intangibles</td><td>8,330</td></tr><tr><td>Goodwill</td><td>29,405</td></tr><tr><td>Deferred tax assets, net</td><td>3,410</td></tr><tr><td>Other assets, including investment in TradeHelm</td><td>1,429</td></tr><tr><td>Accounts payable, accrued expenses and deferred revenue</td><td>-8,701</td></tr><tr><td>Total purchase price</td><td>$42,418</td></tr></table>
The amortizable intangibles include $3.2 million of acquired technology, $3.3 million of customer relationships, $1.3 million of non-competition agreements and $0.5 million of tradenames. Useful lives of ten years and five years have been assigned to the customer relationships intangible and all other amortizable intangibles, respectively. The identifiable intangible assets and goodwill are not deductible for tax purposes. The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the years ended December 31, 2008 and 2007, as if the acquisition of Greenline had occurred as of the beginning of the period presented, after giving effect to certain purchase accounting adjustments. These pro forma results are not necessarily indicative of what the Company’s operating results would have been had the acquisition actually taken place as of the beginning of the earliest period presented. The pro forma financial information |
0.28529 | In the year with lowest amount of Catastrophes for Prior Years, what's the increasing rate of Attritional for Total Incurred? | allows us to repurchase shares at times when we may otherwise be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Subject to applicable regulations, we may elect to amend or cancel this repurchase program or the share repurchase parameters at our discretion. As of December 31, 2018, we have repurchased an aggregate of 4,510,000 shares of common stock under this program. Credit Facilities and Short-Term Debt We have an unsecured revolving credit facility of $2.25 billion that expires in June 2023. In March 2018, AWCC and its lenders amended and restated the credit agreement with respect to AWCC’s revolving credit facility to increase the maximum commitments under the facility from $1.75 billion to $2.25 billion, and to extend the expiration date of the facility from June 2020 to March 2023. All other terms, conditions and covenants with respect to the existing facility remained unchanged. Subject to satisfying certain conditions, the credit agreement also permits AWCC to increase the maximum commitment under the facility by up to an aggregate of $500 million, and to request extensions of its expiration date for up to two, one-year periods. Interest rates on advances under the facility are based on a credit spread to the LIBOR rate or base rate in accordance with Moody Investors Service’s and Standard & Poor’s Financial Services’ then applicable credit rating on AWCC’s senior unsecured, non-credit enhanced debt. The facility is used principally to support AWCC’s commercial paper program and to provide up to $150 million in letters of credit. Indebtedness under the facility is considered “debt” for purposes of a support agreement between the Company and AWCC, which serves as a functional equivalent of a guarantee by the Company of AWCC’s payment obligations under the credit facility. AWCC also has an outstanding commercial paper program that is backed by the revolving credit facility, the maximum aggregate outstanding amount of which was increased in March 2018, from $1.60 billion to $2.10 billion. The following table provides the aggregate credit facility commitments, letter of credit sub-limit under the revolving credit facility and commercial paper limit, as well as the available capacity for each as of December 31, 2018 and 2017:
<table><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Total common shareholders' equity</td><td>40.4%</td><td>41.0%</td><td>42.1%</td></tr><tr><td>Long-term debt and redeemable preferred stock at redemption value</td><td>52.4%</td><td>49.6%</td><td>46.4%</td></tr><tr><td>Short-term debt and current portion of long-term debt</td><td>7.2%</td><td>9.4%</td><td>11.5%</td></tr><tr><td>Total</td><td>100%</td><td>100%</td><td>100%</td></tr></table>
The weighted average interest rate on AWCC short-term borrowings for the years ended December 31, 2018 and 2017 was approximately 2.28% and 1.24%, respectively. Capital Structure The following table provides the percentage of our capitalization represented by the components of our capital structure as of December 31: The effective income tax rate from continuing operations for the years ended December 31 varies from the U. S. statutory federal income tax rate as follows:
<table><tr><td></td><td colspan="3">Percentage of Pretax Earnings</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Statutory federal income tax rate</td><td>35.0%</td><td>35.0%</td><td>35.0%</td></tr><tr><td>Increase (decrease) in tax rate resulting from:</td><td></td><td></td><td></td></tr><tr><td>State income taxes (net of federal income tax benefit)</td><td>0.8%</td><td>0.6%</td><td>0.7%</td></tr><tr><td>Foreign income taxed at lower rate than U.S. statutory rate</td><td>-11.6%</td><td>-10.2%</td><td>-17.1%</td></tr><tr><td>Resolution and expiration of statutes of limitation of uncertain tax positions</td><td>-6.5%</td><td>-3.1%</td><td>-0.7%</td></tr><tr><td>Permanent foreign exchange losses</td><td>-0.6%</td><td>-8.2%</td><td>-4.6%</td></tr><tr><td>Research credits, uncertain tax positions and other</td><td>-1.0%</td><td>3.4%</td><td>1.1%</td></tr><tr><td>Revaluation of U.S. deferred income taxes</td><td>-41.5%</td><td>—%</td><td>—%</td></tr><tr><td>TCJA - Transition Tax</td><td>41.4%</td><td>—%</td><td>—%</td></tr><tr><td>Effective income tax rate</td><td>16.0%</td><td>17.5%</td><td>14.4%</td></tr></table>
The Company’s effective tax rate for each of 2017, 2016 and 2015 differs from the U. S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U. S. federal statutory rate. In addition: ? The effective tax rate of 16.0% in 2017 includes 500 basis points of net tax benefits related to the revaluation of net U. S. deferred tax liabilities from 35.0% to 21.0% due to the TCJA and release of reserves upon statute of limitation expiration, partially offset by income tax expense related to the Transition Tax on foreign earnings due to the TCJA and changes in estimates associated with prior period uncertain tax positions. ? The effective tax rate of 17.5% in 2016 includes 350 basis points of net tax benefits from permanent foreign exchange losses and the release of reserves upon the expiration of statutes of limitation and audit settlements, partially offset by income tax expense related to repatriation of earnings and legal entity realignments associated with the Separation and changes in estimates associated with prior period uncertain tax positions. ? The effective tax rate of 14.4% in 2015 includes 290 basis points of net tax benefits from permanent foreign exchange losses, releases of valuation allowances related to foreign operating losses and the release of reserves upon the expiration of statutes of limitation, partially offset by changes in estimates associated with prior period uncertain tax positions. The Company made income tax payments related to both continuing and discontinued operations of $689 million, $767 million and $584 million in 2017, 2016 and 2015, respectively. Current income taxes payable related to both continuing and discontinued operations has been reduced by $85 million, $99 million, and $147 million in 2017, 2016 and 2015, respectively, for tax deductions attributable to stock-based compensation, of which, the excess tax benefit over the amount recorded for financial reporting purposes for both continuing and discontinued operations was $55 million, $50 million and $88 million, respectively. The excess tax benefits realized have been recorded as increases to additional paid-in capital for the years ended December 31, 2016 and 2015 and are reflected as a financing cash inflow in the accompanying Consolidated Statements of Cash Flows. As a result of the adoption of ASU 2016-09, Compensation—Stock Compensation, the excess tax benefit for the year ended December 31, 2017 has been recorded as a reduction to the current income tax provision and is reflected as an operating cash inflow in the accompanying Consolidated Statement of Cash Flows. Included in deferred income taxes related to continuing operations as of December 31, 2017 are tax benefits for U. S. and nonU. S. net operating loss carryforwards totaling $502 million ($283 million of which the Company does not expect to realize and have corresponding valuation allowances). Certain of the losses can be carried forward indefinitely and others can be carried forward to various dates from 2018 through 2037. In addition, the Company had general business and foreign tax credit carryforwards related to continuing operations of $171 million ($30 million of which the Company does not expect to realize and have corresponding valuation allowances) as of December 31, 2017, which can be carried forward to various dates from 2018 to 2027. In addition, as of December 31, 2017, the Company had $12 million of valuation allowances related to other deferred tax asset balances that are not more likely than not of being realized. As of December 31, 2017, gross unrecognized tax benefits related to continuing operations totaled $737 million ($736 million, net of the impact of $104 million of indirect tax benefits offset by $103 million associated with potential interest and penalties). Incurred Losses and LAE. The following table presents the incurred losses and LAE for the U. S. Reinsurance segment for the periods indicated.
<table><tr><td></td><td colspan="8">Years Ended December 31,</td><td></td></tr><tr><td>(Dollars in millions)</td><td>Current Year</td><td colspan="2">Ratio %/ Pt Change</td><td>Prior Years</td><td colspan="2">Ratio %/ Pt Change</td><td>Total Incurred</td><td colspan="2">Ratio %/ Pt Change</td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$940.6</td><td>48.2%</td><td></td><td>$-123.1</td><td>-6.3%</td><td></td><td>$817.5</td><td>41.9%</td><td></td></tr><tr><td>Catastrophes</td><td>16.7</td><td>0.9%</td><td></td><td>-9.2</td><td>-0.5%</td><td></td><td>7.6</td><td>0.4%</td><td></td></tr><tr><td>Total segment</td><td>$957.4</td><td>49.1%</td><td></td><td>$-132.3</td><td>-6.8%</td><td></td><td>$825.1</td><td>42.3%</td><td></td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$933.3</td><td>47.0%</td><td></td><td>$24.5</td><td>1.2%</td><td></td><td>$957.8</td><td>48.2%</td><td></td></tr><tr><td>Catastrophes</td><td>12.5</td><td>0.6%</td><td></td><td>-15.8</td><td>-0.8%</td><td></td><td>-3.3</td><td>-0.2%</td><td></td></tr><tr><td>Total segment</td><td>$945.8</td><td>47.6%</td><td></td><td>$8.7</td><td>0.4%</td><td></td><td>$954.5</td><td>48.0%</td><td></td></tr><tr><td>2013</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$781.8</td><td>46.7%</td><td></td><td>$-36.7</td><td>-2.2%</td><td></td><td>$745.2</td><td>44.5%</td><td></td></tr><tr><td>Catastrophes</td><td>51.8</td><td>3.1%</td><td></td><td>17.7</td><td>1.1%</td><td></td><td>69.5</td><td>4.2%</td><td></td></tr><tr><td>Total segment</td><td>$833.6</td><td>49.8%</td><td></td><td>$-18.9</td><td>-1.1%</td><td></td><td>$814.7</td><td>48.7%</td><td></td></tr><tr><td>Variance 2015/2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$7.3</td><td>1.2</td><td>pts</td><td>$-147.6</td><td>-7.5</td><td>pts</td><td>$-140.3</td><td>-6.3</td><td>pts</td></tr><tr><td>Catastrophes</td><td>4.2</td><td>0.3</td><td>pts</td><td>6.6</td><td>0.3</td><td>pts</td><td>10.9</td><td>0.6</td><td>pts</td></tr><tr><td>Total segment</td><td>$11.6</td><td>1.5</td><td>pts</td><td>$-141.0</td><td>-7.2</td><td>pts</td><td>$-129.4</td><td>-5.7</td><td>pts</td></tr><tr><td>Variance 2014/2013</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$151.5</td><td>0.3</td><td>pts</td><td>$61.2</td><td>3.4</td><td>pts</td><td>$212.6</td><td>3.7</td><td>pts</td></tr><tr><td>Catastrophes</td><td>-39.3</td><td>-2.5</td><td>pts</td><td>-33.5</td><td>-1.9</td><td>pts</td><td>-72.8</td><td>-4.4</td><td>pts</td></tr><tr><td>Total segment</td><td>$112.2</td><td>-2.2</td><td>pts</td><td>$27.7</td><td>1.5</td><td>pts</td><td>$139.9</td><td>-0.7</td><td>pts</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Incurred losses decreased by 13.6% to $825.1 million in 2015 compared to $954.5 million in 2014, primarily due to an increase in favorable development of $147.6 million on prior year attritional losses in 2015 compared to 2014 related to treaty property, treaty casualty, marine lines of business and less year over year development on A&E reserves. This favorable development was partially offset by the increase in current year attritional losses of $7.3 million resulting primarily from $14.2 million related to the explosion at the Chinese port of Tianjin. Current year catastrophe losses were $16.7 million in 2015 mainly due to the US storms ($16.2 million). The $12.5 million of current year catastrophe losses in 2014 related to the Japan snowstorm ($7.8 million) and Hurricane Odile ($4.7 million). Incurred losses increased by 17.2% to $954.5 million in 2014 compared to $814.7 million in 2013, primarily due to the increase in current year attritional losses of $151.5 million resulting primarily from the impact of the increase in premiums earned and less favorable development of $61.2 million on prior years’ attritional losses in 2014 compared to 2013, mainly related to an increase in A&E reserves. This increase was partially offset by a decrease in current year catastrophe losses (outlined above) and favorable development of $33.5 million on prior year catastrophe losses in 2014 compared to 2013, mainly related to Superstorm Sandy. The $51.8 million of current year catastrophe losses in 2013 were mainly due to U. S. Storms ($44.8 million), the European floods ($5.0 million) and the Canadian Floods ($2.0 million). Segment Expenses. Commission and brokerage expenses increased by 5.8% to $493.3 million in 2015 compared to $466.3 million in 2014. The variance was primarily due to the impact of changes in the mix of business. Segment other underwriting expenses increased to $50.1 million in 2015 from $45.6 million in 2014. The increase was primarily due to the impact of changes in the mix of business and higher employee benefit costs. |
94.86551 | what is the basic net income ( loss ) attributable to common shareholders as a percentage of diluted net income ( loss ) attributable to common shareholders in 2008? | PART II Item?7 Management’s Discussion and Analysis of Financial Condition and Results of Operations Valuation and Recoverability of Goodwill Goodwill represented $833,512 and $841,239 of our $30,043,128 and $31,562,466 of total assets as of December 31, 2015 and 2014, respectively. We review our goodwill annually in the fourth quarter for impairment, or more frequently if indicators of impairment exist. Such indicators include, but are not limited to, significant adverse change in legal factors, adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or a significant decline in our expected future cash flows due to changes in companyspecific factors or the broader business climate. The evaluation of such factors requires considerable judgment. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on our consolidated financial statements. We have concluded that our reporting units for goodwill testing are equivalent to our operating segments. Therefore, we test goodwill for impairment at the reporting unit level. The following table illustrates the amount of goodwill carried at each reporting unit:
<table><tr><td></td><td colspan="2">December 31,</td></tr><tr><td></td><td>2015</td><td>2014</td></tr><tr><td>Assurant Solutions</td><td>$529,093</td><td>$539,653</td></tr><tr><td>Assurant Specialty Property</td><td>304,419</td><td>301,586</td></tr><tr><td>Assurant Health</td><td>—</td><td>—</td></tr><tr><td>Assurant Employee Benefits</td><td>—</td><td>—</td></tr><tr><td>Total</td><td>$833,512</td><td>$841,239</td></tr></table>
In 2015, the Company chose the option to perform qualitative assessments for our Assurant Solutions and Assurant Specialty Property reporting units. This option allows us to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the twostep impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test. We initially considered the 2014 quantitative analysis performed by the Company whereby it compared the estimated fair value of the Assurant Solutions and Assurant Specialty Property reporting units with their respective net book values (“Step 1”). Based on the 2014 Step 1 tests, Assurant Solutions had an estimated fair value that exceeded its net book value by 25.4%, and Assurant Specialty Property had an estimated fair value that exceeded its net book value by 33.3%. Based on our qualitative assessments, having considered the factors in totality we determined that it was not necessary to perform a Step 1 quantitative goodwill impairment test for the Assurant Solutions and Assurant Specialty Property reporting units and that it is more-likely-than-not that the fair value of each reporting unit continues to exceed its net book value in 2015. Significant changes in the external environment or substantial declines in the operating performance of Assurant Solutions and Assurant Specialty Property could cause us to reevaluate this conclusion in the future. In undertaking our qualitative assessments for the Assurant Solutions and Assurant Specialty Property reporting units, we considered macro-economic, industry and reporting unitspecific factors. These included (i. ) the effect of the current interest rate environment on our cost of capital; (ii. ) each reporting unit’s ability to sustain market share over the year; (iii. ) lack of turnover in key management; (iv. )2015 actual performance as compared to expected 2015 performance from our 2014 Step 1 assessment; and, (v. ) the overall market position and share price of Assurant, Inc. Recent Accounting Pronouncements Please see Note 2 of the Notes to the Consolidated Financial Statements. criteria in FASB ASC 360-20 related to the terms of the transactions and any continuing involvement in the form of management or financial assistance from the seller associated with the properties. We make judgments based on the specific terms of each transaction as to the amount of the total profit from the transaction that we recognize considering factors such as continuing ownership interest we may have with the buyer (“partial sales”) and our level of future involvement with the property or the buyer that acquires the assets. If the full accrual sales criteria are not met, we defer gain recognition and account for the continued operations of the property by applying the finance, installment or cost recovery methods, as appropriate, until the full accrual sales criteria are met. Estimated future costs to be incurred after completion of each sale are included in the determination of the gain on sales. To the extent that a property has had operations prior to sale, and that we do not have continuing involvement with the property, gains from sales of depreciated property are included in discontinued operations and the proceeds from the sale of these held-for-rental properties are classified in the investing activities section of the Consolidated Statements of Cash Flows. Gains or losses from our sale of properties that were developed or repositioned with the intent to sell and not for long-term rental (“Build-for-Sale” properties) are classified as gain on sale of properties in the Consolidated Statements of Operations. Other rental properties that do not meet the criteria for presentation as discontinued operations are also classified as gain on sale of properties in the Consolidated Statements of Operations. Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common shareholders, less dividends on sharebased awards expected to vest, by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per common share is computed by dividing the sum of basic net income (loss) attributable to common shareholders and the noncontrolling interest in earnings allocable to Units not owned by us (to the extent the Units are dilutive), by the sum of the weighted average number of common shares outstanding and, to the extent they are dilutive, partnership Units outstanding, as well as any potential dilutive securities for the period. During the first quarter of 2009, we adopted a new accounting standard (FASB ASC 260-10) on participating securities, which we have applied retrospectively to prior period calculations of basic and diluted earnings per common share. Pursuant to this new standard, certain of our share-based awards are considered participating securities because they earn dividend equivalents that are not forfeited even if the underlying award does not vest. The following table reconciles the components of basic and diluted net income (loss) per common share (in thousands):
<table><tr><td></td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Net income (loss) attributable to common shareholders</td><td>$-14,108</td><td>$-333,601</td><td>$50,408</td></tr><tr><td>Less: Dividends on share-based awards expected to vest</td><td>-2,513</td><td>-1,759</td><td>-1,631</td></tr><tr><td>Basic net income (loss) attributable to common shareholders</td><td>-16,621</td><td>-335,360</td><td>48,777</td></tr><tr><td>Noncontrolling interest in earnings of common unitholders</td><td>-</td><td>-</td><td>2,640</td></tr><tr><td>Diluted net income (loss) attributable to common shareholders</td><td>$-16,621</td><td>$-335,360</td><td>$51,417</td></tr><tr><td>Weighted average number of common shares outstanding</td><td>238,920</td><td>201,206</td><td>146,915</td></tr><tr><td>Weighted average partnership Units outstanding</td><td>-</td><td>-</td><td>7,619</td></tr><tr><td>Other potential dilutive shares</td><td>-</td><td>-</td><td>19</td></tr><tr><td>Weighted average number of common shares and potential dilutive securities</td><td>238,920</td><td>201,206</td><td>154,553</td></tr></table>
PRUDENTIAL FINANCIAL, INC. Notes to Consolidated Financial Statements 20. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Fair Value of Financial Instruments The Company is required by U. S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. For the following financial instruments the carrying amount equals or approximates fair value: fixed maturities classified as available for sale, trading account assets supporting insurance liabilities, other trading account assets, equity securities, securities purchased under agreements to resell, short-term investments, cash and cash equivalents, accrued investment income, separate account assets, investment contracts included in separate account liabilities, securities sold under agreements to repurchase, and cash collateral for loaned securities, as well as certain items recorded within other assets and other liabilities such as broker-dealer related receivables and payables. See Note 21 for a discussion of derivative instruments. The following table discloses the Company’s financial instruments where the carrying amounts and fair values may differ:
<table><tr><td></td><td colspan="2"> December 31, 2010</td><td colspan="2"> December 31, 2009</td></tr><tr><td></td><td> Carrying Amount</td><td> Fair Value</td><td> Carrying Amount</td><td> Fair Value</td></tr><tr><td></td><td colspan="4"> (in millions)</td></tr><tr><td> Assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>Fixed maturities, held to maturity</td><td>$5,226</td><td>$5,477</td><td>$5,120</td><td>$5,198</td></tr><tr><td>Commercial mortgage and other loans-1</td><td>31,831</td><td>33,129</td><td>31,384</td><td>30,693</td></tr><tr><td>Policy loans</td><td>10,667</td><td>12,781</td><td>10,146</td><td>11,837</td></tr><tr><td> Liabilities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Policyholders’ account balances - investment contracts</td><td>$77,254</td><td>$78,757</td><td>$73,674</td><td>$74,353</td></tr><tr><td>Short-term and long-term debt-1</td><td>25,635</td><td>27,094</td><td>24,159</td><td>24,054</td></tr><tr><td>Debt of consolidated VIEs</td><td>382</td><td>265</td><td>413</td><td>239</td></tr><tr><td>Bank customer liabilities</td><td>1,754</td><td>1,775</td><td>1,523</td><td>1,538</td></tr></table>
The fair values presented above for those financial instruments where the carrying amounts and fair values may differ have been determined by using available market information and by applying market valuation methodologies, as described in more detail below. Fixed Maturities, held to maturity The fair values of public fixed maturity securities are generally based on prices from third party pricing services, which are reviewed to validate reasonability. However, for certain public fixed maturity securities and investments in private placement fixed maturity securities, this information is either not available or not reliable. For these public fixed maturity securities the fair value is based on non-binding broker quotes, if available, or determined using a discounted cash flow model or internally developed values. For private fixed maturities fair value is determined using a discounted cash flow model, which utilizes a discount rate based 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 and industry sector of the issuer and the reduced liquidity associated with private placements. In determining the fair value of certain fixed maturity securities, the discounted cash flow model may also use unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the security. Commercial Mortgage and Other Loans The fair value of commercial mortgage and other loans, other than those held by the Company’s commercial mortgage operations, is primarily based upon the present value of the expected future cash flows discounted at the appropriate U. S. Treasury rate or Japanese Government Bond rate for yen based loans, adjusted for the current market spread for similar quality loans. The fair value of commercial mortgage and other loans held by the Company’s commercial mortgage operations is based upon various factors, including the terms of the loans, the principal exit markets for the loans, prevailing interest rates, and credit risk. Policy Loans The fair value of U. S. insurance policy loans is calculated using a discounted cash flow model based upon current U. S. Treasury rates and historical loan repayment patterns, while Japanese insurance policy loans use the risk-free proxy based on the Yen LIBOR. For group corporate-, bank- and trust-owned life insurance contracts and group universal life contracts, the fair value of the policy loans is the amount due as of the reporting date. WASTE MANAGEMENT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) estimated accruals for these liabilities could be affected if future occurrences or loss development significantly differ from the assumptions used. As of December 31, 2008, our general liability insurance program carried selfinsurance exposures of up to $2.5 million per incident and our workers’ compensation insurance program carried self-insurance exposures of up to $5 million per incident. As of December 31, 2008, our auto liability insurance program included a per-incident base deductible of $1 million, subject to additional aggregate deductibles in the $1 million to $5 million layer and the $5 million to $10 million layer of $2.4 million and $2.5 million, respectively. Self-insurance claims reserves acquired as part of our acquisition of WM Holdings in July 1998 were discounted at 2.25% at December 31, 2008 and 4.0% at December 31, 2007. The changes to our net insurance liabilities for the years ended December 31, 2007 and 2008 are summarized below (in millions):
<table><tr><td></td><td>Gross Claims Liability</td><td>Estimated Insurance Recoveries(a)</td><td>Net Claims Liability</td></tr><tr><td>Balance, December 31, 2005</td><td>$660</td><td>$-311</td><td>$349</td></tr><tr><td>Self-insurance expense (benefit)</td><td>233</td><td>-31</td><td>202</td></tr><tr><td>Cash (paid) received</td><td>-241</td><td>75</td><td>-166</td></tr><tr><td>Balance, December 31, 2006</td><td>652</td><td>-267</td><td>385</td></tr><tr><td>Self-insurance expense (benefit)</td><td>144</td><td>-1</td><td>143</td></tr><tr><td>Cash (paid) received</td><td>-225</td><td>54</td><td>-171</td></tr><tr><td>Balance, December 31, 2007</td><td>571</td><td>-214</td><td>357</td></tr><tr><td>Self-insurance expense (benefit)</td><td>169</td><td>-28</td><td>141</td></tr><tr><td>Cash (paid) received</td><td>-209</td><td>51</td><td>-158</td></tr><tr><td>Balance, December 31, 2008</td><td>$531</td><td>$-191</td><td>$340</td></tr><tr><td>Current portion at December 31, 2008</td><td>$142</td><td>$-63</td><td>$79</td></tr><tr><td>Long-term portion at December 31, 2008</td><td>$389</td><td>$-128</td><td>$261</td></tr></table>
(a) Amounts reported as estimated insurance recoveries are related to both paid and unpaid claims liabilities. For the 14 months ended January 1, 2000, we insured certain risks, including auto, general liability and workers’ compensation, with Reliance National Insurance Company, whose parent filed for bankruptcy in June 2001. In October 2001, the parent and certain of its subsidiaries, including Reliance National Insurance Company, were placed in liquidation. We believe that because of probable recoveries from the liquidation, currently estimated to be $15 million, it is unlikely that events relating to Reliance will have a material adverse impact on our financial statements. We do not expect the impact of any known casualty, property, environmental or other contingency to have a material impact on our financial condition, results of operations or cash flows. Operating leases — Rental expense for leased properties was $114 million, $135 million and $122 million during 2008, 2007 and 2006, respectively. These amounts primarily include rents under operating leases. Minimum contractual payments due for our operating lease obligations are $81 million in 2009, $71 million in 2010, $58 million in 2011, $57 million in 2012 and $46 million in 2013. Our minimum contractual payments for lease agreements during future periods is significantly less than current year rent expense because our significant lease agreements at landfills have variable terms based either on a percentage of revenue or a rate per ton of waste received. Other commitments — We have the following unconditional obligations: ? Fuel Supply — We have purchase agreements expiring at various dates through 2011 that require us to purchase minimum amounts of wood waste, anthracite coal waste (culm) and conventional fuels at our independent power production plants. These fuel supplies are used to produce steam that is sold to industrial |
74 | What was the sum of U.S. without those U.S. smaller than 15 in 2018 for Pension Benefits? (in million) | <table><tr><td></td><td>2009</td><td>2008</td></tr><tr><td> E&P Operating Statistics</td><td></td><td></td></tr><tr><td>Average Realizations<sup>(d)</sup></td><td></td><td></td></tr><tr><td>Liquid Hydrocarbons (per bbl)</td><td></td><td></td></tr><tr><td>United States</td><td>$54.67</td><td>$86.68</td></tr><tr><td>Europe</td><td>64.46</td><td>90.60</td></tr><tr><td>Africa</td><td>53.91</td><td>89.85</td></tr><tr><td>Total International</td><td>59.31</td><td>90.14</td></tr><tr><td>Worldwide Continuing Operations</td><td>58.09</td><td>89.07</td></tr><tr><td>Discontinued Operations<sup>(b)</sup></td><td>56.47</td><td>96.41</td></tr><tr><td>Worldwide</td><td>$58.06</td><td>$89.29</td></tr><tr><td>Natural Gas (per mcf)</td><td></td><td></td></tr><tr><td>United States</td><td>$4.14</td><td>$7.01</td></tr><tr><td>Europe</td><td>4.90</td><td>7.67</td></tr><tr><td>Africa</td><td>0.25</td><td>0.25</td></tr><tr><td>Total International</td><td>1.38</td><td>2.50</td></tr><tr><td>Worldwide Continuing Operations</td><td>2.47</td><td>4.56</td></tr><tr><td>Discontinued Operations<sup>(b)</sup></td><td>8.54</td><td>9.62</td></tr><tr><td>Worldwide</td><td>$2.58</td><td>$4.75</td></tr></table>
(a) Includes crude oil, condensate and natural gas liquids. The amounts correspond with the basis for fiscal settlements with governments, representing equity tanker liftings and direct deliveries of liquid hydrocarbons. (b) Our businesses in Ireland and Gabon were sold in 2009. All periods have been recast to reflect these businesses as discontinued operations. (c) Includes natural gas acquired for injection and subsequent resale of 22 mmcfd and 32 mmcfd in 2009 and 2008. (d) Excludes gains and losses on derivative instruments and the unrealized effects of U. K. natural gas contracts that are accounted for as derivatives. E&P segment revenues included derivative losses of $13 million in 2009 and gains of $22 million in 2008. Excluded from E&P segment revenues were gains of $72 million in 2009 and $218 million in 2008 related to natural gas sales contracts in the U. K. that were accounted for as derivative instruments. These U. K contracts expired in September 2009. OSM segment revenues decreased $455 million from 2008 to 2009. Revenues were impacted by net gains of $12 million in 2009 and $48 million in 2008 on derivative instruments, which expired December 2009. Excluding the derivatives, the decrease in revenue reflects the almost 40 percent decline in synthetic crude oil realizations. Synthetic crude oil sales volumes were consistent between the years. RM&T segment revenues decreased $18,951 million from 2008 to 2009 matching relative price level changes. While our overall refined product sales volumes in 2009 were relatively unchanged compared to 2008, the level of average petroleum prices declined significantly as shown in Item 1. Business—Refining, Marketing and Transportation. The level of crude oil prices has a direct influence on our refined product prices. The table below shows the average annual refined product benchmark prices for our marketing area.
<table><tr><td><i>(Dollars per gallon)</i></td><td>2009</td><td>2008</td></tr><tr><td>Chicago Spot Unleaded regular gasoline</td><td>$1.68</td><td>$2.50</td></tr><tr><td>Chicago Spot Ultra-low sulfur diesel</td><td>$1.66</td><td>$2.95</td></tr><tr><td>U.S. Gulf Coast Spot Unleaded regular gasoline</td><td>$1.64</td><td>$2.48</td></tr><tr><td>U.S. Gulf Coast Spot Ultra-low sulfur diesel</td><td>$1.66</td><td>$2.93</td></tr></table>
Sales to related parties decreased in 2009 as a result of the sale of our interest in Pilot Travel Centers LLC (“PTC”) during the fourth quarter of 2008. Income from equity method investments decreased $467 million in 2009 from 2008 primarily as the result of lower commodity prices on the earnings of many of our equity investees in 2009 and the sale of our equity method investment in PTC during the fourth quarter of 2008. Net gain on disposal of assets in 2009 includes our gain on the sale of our operated and a portion of our outside-operated Permian Basin producing assets in New Mexico and west Texas, plus sales of other oil and gas properties and retail stores. In 2008, we sold our outside-operated interests (24 percent of Heimdal field, 47 percent MARATHON OIL CORPORATIONNotes to Consolidated Financial Statements90Stock-based performance unit awards – During 2018, 2017 and 2016 we granted 754,140, 563,631 and 1,205,517 stockbased performance unit awards to officers. At December 31, 2018, there were 1,196,176 units outstanding. Total stock-based performance unit awards expense was $13 million in 2018, $8 million in 2017 and $6 million in 2016. The key assumptions used in the Monte Carlo simulation to determine the fair value of stock-based performance units granted in 2018, 2017 and 2016 were:
<table><tr><td></td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>Valuation date stock price</td><td>$14.17</td><td>$14.17</td><td>$14.17</td></tr><tr><td>Expected annual dividend yield</td><td>1.4%</td><td>1.4%</td><td>1.4%</td></tr><tr><td>Expected volatility</td><td>39%</td><td>43%</td><td>52%</td></tr><tr><td>Risk-free interest rate</td><td>2.5%</td><td>2.6%</td><td>2.4%</td></tr><tr><td>Fair value of stock-based performance units outstanding</td><td>$19.60</td><td>$19.45</td><td>$21.51</td></tr></table>
18. Defined Benefit Postretirement Plans and Defined Contribution PlanWe have noncontributory defined benefit pension plans covering substantially all domestic employees, as well as U. K. employees who were hired before April 2010. Certain employees located in E. G. , who are U. S. or U. K. based, also participate in these plans. Benefits under these plans are based on plan provisions specific to each plan. For the U. K. pension plan, the principal employer and plan trustees reached a decision to close the plan to future benefit accruals effective December 31, 2015. We also have defined benefit plans for other postretirement benefits covering our U. S. employees. Health care benefits are provided up to age 65 through comprehensive hospital, surgical and major medical benefit provisions subject to various costsharing features. Post-age 65 health care benefits are provided to certain U. S. employees on a defined contribution basis. Life insurance benefits are provided to certain retiree beneficiaries. These other postretirement benefits are not funded in advance. Employees hired after 2016 are not eligible for any postretirement health care or life insurance benefits. MARATHON OIL CORPORATION Notes to Consolidated Financial Statements 92 Components of net periodic benefit cost from continuing operations and other comprehensive (income) loss – The following summarizes the net periodic benefit costs and the amounts recognized as other comprehensive (income) loss for our defined benefit pension and other postretirement plans
<table><tr><td></td><td colspan="6">Pension Benefits Year Ended December 31,</td><td colspan="3">Other Benefits Year Ended December 31,</td></tr><tr><td></td><td colspan="2">2018</td><td colspan="2">2017</td><td colspan="2">2016</td><td>2018</td><td>2017</td><td>2016</td></tr><tr><td>(In millions)</td><td>U.S.</td><td>Int’l</td><td>U.S.</td><td>Int’l</td><td>U.S.</td><td>Int’l</td><td>U.S.</td><td>U.S.</td><td>U.S.</td></tr><tr><td>Components of net periodic benefit cost:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Service cost</td><td>$18</td><td>$—</td><td>$22</td><td>$—</td><td>$25</td><td>$—</td><td>$2</td><td>$2</td><td>$2</td></tr><tr><td>Interest cost</td><td>12</td><td>14</td><td>13</td><td>17</td><td>16</td><td>23</td><td>7</td><td>8</td><td>11</td></tr><tr><td>Expected return on plan assets</td><td>-11</td><td>-24</td><td>-13</td><td>-30</td><td>-18</td><td>-35</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Amortization:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>- prior service cost (credit)</td><td>-10</td><td>—</td><td>-10</td><td>—</td><td>-10</td><td>1</td><td>-8</td><td>-7</td><td>-3</td></tr><tr><td>- actuarial loss</td><td>11</td><td>—</td><td>8</td><td>1</td><td>14</td><td>—</td><td>1</td><td>—</td><td>—</td></tr><tr><td>Net settlement loss<sup>(a)</sup></td><td>18</td><td>3</td><td>28</td><td>4</td><td>97</td><td>6</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net periodic benefit cost<sup>(b)</sup></td><td>$38</td><td>$-7</td><td>$48</td><td>$-8</td><td>$124</td><td>$-5</td><td>$2</td><td>$3</td><td>$10</td></tr><tr><td>Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss (pretax):</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Actuarial loss (gain)</td><td>$-4</td><td>$8</td><td>$28</td><td>$-26</td><td>$70</td><td>$41</td><td>$-15</td><td>$5</td><td>$11</td></tr><tr><td>Amortization of actuarial gain (loss)</td><td>-29</td><td>-3</td><td>-36</td><td>-4</td><td>-111</td><td>-6</td><td>-1</td><td>—</td><td>—</td></tr><tr><td>Prior service cost (credit)</td><td>—</td><td>3</td><td>—</td><td>—</td><td>—</td><td>1</td><td>-99</td><td>—</td><td>-38</td></tr><tr><td>Amortization of prior service credit (cost)</td><td>10</td><td>—</td><td>10</td><td>—</td><td>10</td><td>-1</td><td>8</td><td>7</td><td>3</td></tr><tr><td>Total recognized in other comprehensive (income) loss</td><td>$-23</td><td>$8</td><td>$2</td><td>$-30</td><td>$-31</td><td>$35</td><td>$-107</td><td>$12</td><td>$-24</td></tr><tr><td>Total recognized in net periodic benefit cost and other comprehensive (income) loss</td><td>$15</td><td>$1</td><td>$50</td><td>$-38</td><td>$93</td><td>$30</td><td>$-105</td><td>$15</td><td>$-14</td></tr></table>
(a) Settlements are recognized as they occur, once it is probable that lump sum payments from a plan for a given year will exceed the plan’s total service and interest costs for that year. (b) Net periodic benefit cost reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years. The estimated net loss and prior service credit for our defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2019 are $7 million and $7 million. The estimated net loss and prior service credit for our other defined benefit postretirement plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2019 are $1 million and $18 million. Plan assumptions – The following summarizes the assumptions used to determine the benefit obligations at December 31, and net periodic benefit cost for the defined benefit pension and other postretirement plans for 2018, 2017 and 2016. |
981,666 | What is the sum of the Time deposits in the years where Taxable greater than 0 ? (in thousand) | Kimco Realty Corporation and Subsidiaries
<table><tr><td></td><td>2006</td><td>2005</td></tr><tr><td>Remaining net rentals</td><td>$62.3</td><td>$68.9</td></tr><tr><td>Estimated unguaranteed residual value</td><td>40.5</td><td>43.8</td></tr><tr><td>Non-recourse mortgage debt</td><td>-48.4</td><td>-52.8</td></tr><tr><td>Unearned and deferred income</td><td>-50.7</td><td>-55.9</td></tr><tr><td>Net investment in leveraged lease</td><td>$3.7</td><td>$4.0</td></tr></table>
9. Mortgages and Other Financing Receivables: During January 2006, the Company provided approximately $16.0 million as its share of a $50.0 million junior participation in a $700.0 million first mortgage loan, in connection with a private investment firm’s acquisition of a retailer. This loan participation bore interest at LIBOR plus 7.75% per annum and had a two-year term with a one-year extension option and was collateralized by certain real estate interests of the retailer. During June 2006, the borrower elected to pre-pay the outstanding loan balance of approximately $16.0 million in full satisfaction of this loan. Additionally, during January 2006, the Company provided approximately $5.2 million as its share of an $11.5 million term loan to a real estate developer for the acquisition of a 59 acre land parcel located in San Antonio, TX. This loan is interest only at a fixed rate of 11.0% for a term of two years payable monthly and collateralized by a first mortgage on the subject property. As of December 31, 2006, the outstanding balance on this loan was approximately $5.2 million. During February 2006, the Company committed to provide a one year $17.2 million credit facility at a fixed rate of 8.0% for a term of nine months and 9.0% for the remaining term to a real estate investor for the recapitalization of a discount and entertainment mall that it currently owns. During 2006, this facility was fully paid and was terminated. During April 2006, the Company provided two separate mortgages aggregating $14.5 million on a property owned by a real estate investor. Proceeds were used to payoff the existing first mortgage, buyout the existing partner and for redevelopment of the property. The mortgages bear interest at 8.0% per annum and mature in 2008 and 2013. These mortgages are collateralized by the subject property. As of December 31, 2006, the aggregate outstanding balance on these mortgages was approximately $15.0 million, including $0.5 million of accrued interest. During May 2006, the Company provided a CAD $23.5 million collateralized credit facility at a fixed rate of 8.5% per annum for a term of two years to a real estate company for the execution of its property acquisitions program. The credit facility is guaranteed by the real estate company. The Company was issued 9,811 units, valued at approximately USD $0.1 million, and warrants to purchase up to 0.1 million shares of the real estate company as a loan origination fee. During August 2006, the Company increased the credit facility to CAD $45.0 million and received an additional 9,811 units, valued at approximately USD $0.1 million, and warrants to purchase up to 0.1 million shares of the real estate company. As of December 31, 2006, the outstanding balance on this credit facility was approximately CAD $3.6 million (approximately USD $3.1 million). During September 2005, a newly formed joint venture, in which the Company had an 80% interest, acquired a 90% interest in a $48.4 million mortgage receivable for a purchase price of approximately $34.2 million. This loan bore interest at a rate of three-month LIBOR plus 2.75% per annum and was scheduled to mature on January 12, 2010. A 626-room hotel located in Lake Buena Vista, FL collateralized the loan. The Company had determined that this joint venture entity was a VIE and had further determined that the Company was the primary beneficiary of this VIE and had therefore consolidated it for financial reporting purposes. During March 2006, the joint venture acquired the remaining 10% of this mortgage receivable for a purchase price of approximately $3.8 million. During June 2006, the joint venture accepted a pre-payment of approximately $45.2 million from the borrower as full satisfaction of this loan. During August 2006, the Company provided $8.8 million as its share of a $13.2 million 12-month term loan to a retailer for general corporate purposes. This loan bears interest at a fixed rate of 12.50% with interest payable monthly and a balloon payment for the principal balance at maturity. The loan is collateralized by the underlying real estate of the retailer. Additionally, the Company funded $13.3 million as its share of a $20.0 million revolving Debtor-in-Possession facility to this retailer. The facility bears interest at LIBOR plus 3.00% and has an unused line fee of 0.375%. This credit facility is collateralized by a first priority lien on all the retailer’s assets. As of December 31, 2006, the Company’s share of the outstanding balance on this loan and credit facility was approximately $7.6 million and $4.9 million, respectively. During September 2006, the Company provided a MXP 57.3 million (approximately USD $5.3 million) loan to an owner of an operating property in Mexico. The loan, which is collateralized by the property, bears interest at 12.0% per annum and matures in 2016. The Company is entitled to a participation feature of 25% of annual cash flows after debt service and 20% of the gain on sale of the property. As of December 31, 2006, the outstanding balance on this loan was approximately MXP 57.8 million (approximately USD $5.3 million). During November 2006, the Company committed to provide a MXP 124.8 million (approximately USD $11.5 million) loan to an owner of a land parcel in Acapulco, Mexico. The loan, which is collateralized with an operating property owned by the borrower, bears interest at 10% per annum and matures in 2016. The Company is entitled to a participation feature of 20% of excess cash flows and gains on sale of the property. As of December 31, 2006, the outstanding balance on this loan was MXP 12.8 million (approximately USD $1.2 million). Table of Contents requiring more management judgment to estimate the appropriate fair value measurement. Accordingly, the degree of judgment exercised by management in determining fair value is greater for financial assets and liabilities categorized as Level 3. Our valuation processes include a number of key controls that are designed to ensure that fair value is measured appropriately. The following table summarizes our financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2011 and 2010:
<table><tr><td></td><td colspan="4"> December 31,</td></tr><tr><td></td><td colspan="2">2011</td><td colspan="2"> 2010</td></tr><tr><td> (Dollars in thousands)</td><td>Total Balance</td><td>Level 3</td><td>Total Balance</td><td> Level 3</td></tr><tr><td>Assets carried at fair value</td><td>$11,372,081</td><td>$799,962</td><td>$8,546,528</td><td>$547,608</td></tr><tr><td>As a percentage of total assets</td><td>56.9%</td><td>4.0%</td><td>48.8%</td><td>3.1%</td></tr><tr><td>Liabilities carried at fair value</td><td>$16,868</td><td>$—</td><td>$10,267</td><td>$—</td></tr><tr><td>As a percentage of total liabilities</td><td>0.1%</td><td>—%</td><td>0.1%</td><td>—%</td></tr><tr><td></td><td>Level 1 and 2</td><td>Level 3</td><td>Level 1 and 2</td><td>Level 3</td></tr><tr><td>Percentage of assets measured at fair value</td><td>93.0%</td><td>7.0%</td><td>93.6%</td><td>6.4%</td></tr></table>
As of December 31, 2011, our available-for-sale securities portfolio, consisting of agency-issued mortgage-backed securities, agency-issued collateralized mortgage obligations, U. S. agency debentures, U. S. treasury securities and municipal bonds and notes, represented $10.5 billion, or 92.6 percent of our portfolio of assets measured at fair value on a recurring basis, compared to $7.9 billion, or 92.6 percent, as of December 31, 2010. These instruments were classified as Level 2 because their valuations were based on indicative prices corroborated by observable market quotes or valuation techniques with all significant inputs derived from or corroborated by observable market data. The fair value of our available-for-sale securities portfolio is sensitive to changes in levels of market interest rates and market perceptions of credit quality of the underlying securities. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis. Assets valued using Level 2 measurements also include equity warrant assets in shares of public company capital stock, marketable securities, interest rate swaps, foreign exchange forward and option contracts, loan conversion options and client interest rate derivatives. To the extent available-for-sale securities are used to secure borrowings, changes in the fair value of those securities could have an impact on the total amount of secured financing available. We pledge securities to the Federal Home Loan Bank of San Francisco and the discount window at the Federal Reserve Bank. The market value of collateral pledged to the Federal Home Loan Bank of San Francisco (comprised entirely of U. S. agency debentures) at December 31, 2011 totaled $1.5 billion, all of which was unused and available to support additional borrowings. The market value of collateral pledged at the discount window of the Federal Reserve Bank in accordance with our liquidity risk management practices at December 31, 2011 totaled $100.5 million, all of which was unused and available to support additional borrowings. We have repurchase agreements in place with multiple securities dealers, which allow us to access short-term borrowings by using available-for-sale securities as collateral. At December 31, 2011, we had not utilized any of our repurchase lines to secure borrowed funds. Financial assets valued using Level 3 measurements consist primarily of our investments in venture capital and private equity funds and direct equity investments in privately held companies. Our managed funds and debt fund that hold these investments qualify as investment companies under the American Institute of Certified Public Accountants (“AICPA”) Audit and Accounting Guide for Investment Companies and accordingly, these funds report their investments at estimated fair value, with unrealized gains and losses resulting from changes in fair value reflected as investment gains or losses in our consolidated statements of income. Assets valued using Level 3 measurements also include equity warrant assets in shares of private company capital stock. Table of Contents Average Balances, Yields and Rates Paid (Fully Taxable Equivalent Basis) The average yield earned on interest-earning assets is the amount of annualized fully taxable equivalent interest income expressed as a percentage of average interest-earning assets. The average rate paid on funding sources is the amount of annualized interest expense expressed as a percentage of average funding sources. The following tables set forth average assets, liabilities, noncontrolling interests and SVBFG stockholders’ equity, interest income, interest expense, annualized yields and rates, and the composition of our annualized net interest margin in 2011, 2010 and 2009.
<table><tr><td></td><td colspan="9"> Year ended December 31,</td></tr><tr><td></td><td colspan="3">2011</td><td colspan="3">2010</td><td colspan="3"> 2009</td></tr><tr><td> (Dollars in thousands)</td><td>Average Balance</td><td>Interest Income/ Expense</td><td>Yield/ Rate</td><td>Average Balance</td><td>Interest Income/ Expense</td><td>Yield/ Rate</td><td>Average Balance</td><td>Interest Income/ Expense</td><td> Yield/ Rate</td></tr><tr><td>Interest-earning assets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities-1</td><td>$1,974,001</td><td>$6,486</td><td>0.33%</td><td>$3,869,781</td><td>$10,960</td><td>0.28%</td><td>$3,333,182</td><td>$9,790</td><td>0.29%</td></tr><tr><td>Available-for-sale securities: -2</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Taxable</td><td>9,256,688</td><td>165,449</td><td>1.79</td><td>5,249,884</td><td>127,422</td><td>2.43</td><td>2,179,181</td><td>81,536</td><td>3.74</td></tr><tr><td>Non-taxable -3</td><td>93,693</td><td>5,574</td><td>5.95</td><td>97,443</td><td>5,860</td><td>6.01</td><td>103,150</td><td>6,298</td><td>6.11</td></tr><tr><td>Total loans, net of unearned income -4</td><td>5,815,071</td><td>389,830</td><td>6.70</td><td>4,435,911</td><td>319,540</td><td>7.20</td><td>4,699,696</td><td>335,806</td><td>7.15</td></tr><tr><td>Total interest-earning assets</td><td>17,139,453</td><td>567,339</td><td>3.31</td><td>13,653,019</td><td>463,782</td><td>3.40</td><td>10,315,209</td><td>433,430</td><td>4.20</td></tr><tr><td>Cash and due from banks</td><td>283,596</td><td></td><td></td><td>232,058</td><td></td><td></td><td>238,911</td><td></td><td></td></tr><tr><td>Allowance for loan losses</td><td>-88,104</td><td></td><td></td><td>-77,999</td><td></td><td></td><td>-107,512</td><td></td><td></td></tr><tr><td>Goodwill</td><td>—</td><td></td><td></td><td>—</td><td></td><td></td><td>1,000</td><td></td><td></td></tr><tr><td>Other assets -5</td><td>1,335,554</td><td></td><td></td><td>1,051,158</td><td></td><td></td><td>878,733</td><td></td><td></td></tr><tr><td>Total assets</td><td>$18,670,499</td><td></td><td></td><td>$14,858,236</td><td></td><td></td><td>$11,326,341</td><td></td><td></td></tr><tr><td>Funding sources:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest-bearing liabilities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>NOW deposits</td><td>$87,099</td><td>$270</td><td>0.31%</td><td>$51,423</td><td>$208</td><td>0.40%</td><td>$42,022</td><td>$160</td><td>0.38%</td></tr><tr><td>Money market deposits</td><td>2,508,279</td><td>5,131</td><td>0.20</td><td>1,818,113</td><td>5,308</td><td>0.29</td><td>1,183,848</td><td>6,152</td><td>0.52</td></tr><tr><td>Money market deposits in foreign offices</td><td>130,693</td><td>294</td><td>0.22</td><td>83,253</td><td>272</td><td>0.33</td><td>62,440</td><td>416</td><td>0.67</td></tr><tr><td>Time deposits</td><td>258,810</td><td>1,102</td><td>0.43</td><td>361,921</td><td>1,786</td><td>0.49</td><td>355,602</td><td>2,445</td><td>0.69</td></tr><tr><td>Sweep deposits in foreign offices</td><td>2,346,076</td><td>2,065</td><td>0.09</td><td>2,496,649</td><td>7,204</td><td>0.29</td><td>1,860,899</td><td>12,173</td><td>0.65</td></tr><tr><td>Total interest-bearing deposits</td><td>5,330,957</td><td>8,862</td><td>0.17</td><td>4,811,359</td><td>14,778</td><td>0.31</td><td>3,504,811</td><td>21,346</td><td>0.61</td></tr><tr><td>Short-term borrowings</td><td>16,994</td><td>25</td><td>0.15</td><td>49,972</td><td>92</td><td>0.18</td><td>46,133</td><td>72</td><td>0.16</td></tr><tr><td>5.375% Senior Notes</td><td>347,689</td><td>19,244</td><td>5.53</td><td>98,081</td><td>5,345</td><td>5.45</td><td>—</td><td>—</td><td>—</td></tr><tr><td>3.875% Convertible Notes</td><td>71,108</td><td>4,210</td><td>5.92</td><td>248,056</td><td>14,147</td><td>5.70</td><td>245,756</td><td>14,043</td><td>5.71</td></tr><tr><td>Junior Subordinated Debentures</td><td>55,467</td><td>3,325</td><td>5.99</td><td>55,706</td><td>3,061</td><td>5.49</td><td>55,948</td><td>3,465</td><td>6.19</td></tr><tr><td>5.70% Senior Note and 6.05% Subordinated Notes</td><td>317,855</td><td>3,151</td><td>0.99</td><td>559,915</td><td>5,895</td><td>1.05</td><td>560,398</td><td>9,166</td><td>1.64</td></tr><tr><td>Other long-term debt</td><td>4,704</td><td>294</td><td>6.25</td><td>6,620</td><td>278</td><td>4.20</td><td>61,752</td><td>984</td><td>1.59</td></tr><tr><td>Total interest-bearing liabilities</td><td>6,144,774</td><td>39,111</td><td>0.64</td><td>5,829,709</td><td>43,596</td><td>0.75</td><td>4,474,798</td><td>49,076</td><td>1.10</td></tr><tr><td>Portion of noninterest-bearing funding sources</td><td>10,994,679</td><td></td><td></td><td>7,823,310</td><td></td><td></td><td>5,840,411</td><td></td><td></td></tr><tr><td>Total funding sources</td><td>17,139,453</td><td>39,111</td><td>0.23</td><td>13,653,019</td><td>43,596</td><td>0.32</td><td>10,315,209</td><td>49,076</td><td>0.47</td></tr><tr><td>Noninterest-bearing funding sources:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Demand deposits</td><td>10,237,844</td><td></td><td></td><td>7,216,968</td><td></td><td></td><td>5,289,288</td><td></td><td></td></tr><tr><td>Other liabilities</td><td>268,721</td><td></td><td></td><td>189,475</td><td></td><td></td><td>179,795</td><td></td><td></td></tr><tr><td>SVBFG stockholders’ equity</td><td>1,448,398</td><td></td><td></td><td>1,230,569</td><td></td><td></td><td>1,063,175</td><td></td><td></td></tr><tr><td>Noncontrolling interests</td><td>570,762</td><td></td><td></td><td>391,515</td><td></td><td></td><td>319,285</td><td></td><td></td></tr><tr><td>Portion used to fund interest-earning assets</td><td>-10,994,679</td><td></td><td></td><td>-7,823,310</td><td></td><td></td><td>-5,840,411</td><td></td><td></td></tr><tr><td>Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity stockholders’ equity</td><td>$18,670,499</td><td></td><td></td><td>$14,858,236</td><td></td><td></td><td>$11,326,341</td><td></td><td></td></tr><tr><td>Net interest income and margin</td><td></td><td>$528,228</td><td>3.08%</td><td></td><td>$420,186</td><td>3.08%</td><td></td><td>$384,354</td><td>3.73%</td></tr><tr><td>Total deposits</td><td>$15,568,801</td><td></td><td></td><td>$12,028,327</td><td></td><td></td><td>$8,794,099</td><td></td><td></td></tr><tr><td>Reconciliation to reported net interest income:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Adjustment for tax-equivalent basis</td><td></td><td>-1,951</td><td></td><td></td><td>-2,051</td><td></td><td></td><td>-2,204</td><td></td></tr><tr><td>Net interest income, as reported</td><td></td><td>$526,277</td><td></td><td></td><td>$418,135</td><td></td><td></td><td>$382,150</td><td></td></tr></table>
(1) Includes average interest-earning deposits in other financial institutions of $324.2 million, $217.4 million and $176.5 million in 2011, 2010 and 2009, respectively. For 2011, 2010 and 2009, balances also include $1.4 billion, $3.5 billion and $3.1 billion, respectively, deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate. |
0.20532 | the specific reserves in the alll as of december 31 , 2012 were what percent of the tdr portfolio? | Table 41: Bank-Owned Consumer Real Estate Related Loan Modifications Re-Default by Vintage (a) (b)
<table><tr><td></td><td colspan="2">Six Months</td><td colspan="2">Nine Months</td><td colspan="2">Twelve Months</td><td colspan="2">Fifteen Months</td><td></td></tr><tr><td>December 31, 2012Dollars in millions</td><td>Number of Accounts Re-defaulted</td><td>% of Vintage Re-defaulted</td><td>Number ofAccounts Re-defaulted</td><td>% of Vintage Re-defaulted</td><td>Number ofAccounts Re-defaulted</td><td>% of Vintage Re-defaulted</td><td>Number ofAccounts Re-defaulted</td><td>% of Vintage Re-defaulted</td><td>UnpaidPrincipal Balance (c)</td></tr><tr><td> Permanent Modifications</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> Home Equity</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Second Quarter 2012</td><td>36</td><td>2.0%</td><td></td><td></td><td></td><td></td><td></td><td></td><td>$2,340</td></tr><tr><td>First Quarter 2012</td><td>24</td><td>2.2</td><td>42</td><td>3.8%</td><td></td><td></td><td></td><td></td><td>2,519</td></tr><tr><td>Fourth Quarter 2011</td><td>9</td><td>2.0</td><td>18</td><td>3.9</td><td>25</td><td>5.4%</td><td></td><td></td><td>2,149</td></tr><tr><td>Third Quarter 2011</td><td>23</td><td>4.0</td><td>31</td><td>5.4</td><td>37</td><td>6.5</td><td>49</td><td>8.6%</td><td>3,514</td></tr><tr><td>Second Quarter 2011</td><td>20</td><td>5.4</td><td>29</td><td>7.8</td><td>38</td><td>10.2</td><td>42</td><td>11.3</td><td>2,588</td></tr><tr><td> Residential Mortgages</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Second Quarter 2012</td><td>192</td><td>18.7</td><td></td><td></td><td></td><td></td><td></td><td></td><td>32,842</td></tr><tr><td>First Quarter 2012</td><td>181</td><td>17.7</td><td>238</td><td>23.2</td><td></td><td></td><td></td><td></td><td>38,753</td></tr><tr><td>Fourth Quarter 2011</td><td>206</td><td>21.8</td><td>281</td><td>29.7</td><td>318</td><td>33.6</td><td></td><td></td><td>53,211</td></tr><tr><td>Third Quarter 2011</td><td>260</td><td>21.6</td><td>350</td><td>29.1</td><td>442</td><td>36.7</td><td>471</td><td>39.1</td><td>75,420</td></tr><tr><td>Second Quarter 2011</td><td>338</td><td>25.5</td><td>424</td><td>31.9</td><td>469</td><td>35.3</td><td>533</td><td>40.1</td><td>83,804</td></tr><tr><td> Non-Prime Mortgages</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Second Quarter 2012</td><td>39</td><td>20.1</td><td></td><td></td><td></td><td></td><td></td><td></td><td>5,014</td></tr><tr><td>First Quarter 2012</td><td>46</td><td>21.3</td><td>57</td><td>26.4</td><td></td><td></td><td></td><td></td><td>8,344</td></tr><tr><td>Fourth Quarter 2011</td><td>38</td><td>14.7</td><td>59</td><td>22.9</td><td>81</td><td>31.4</td><td></td><td></td><td>11,390</td></tr><tr><td>Third Quarter 2011</td><td>85</td><td>23.0</td><td>103</td><td>27.8</td><td>133</td><td>35.9</td><td>144</td><td>38.9</td><td>19,836</td></tr><tr><td>Second Quarter 2011</td><td>105</td><td>17.8</td><td>143</td><td>24.2</td><td>163</td><td>27.6</td><td>189</td><td>32.0</td><td>28,585</td></tr><tr><td> Residential Construction</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Second Quarter 2012</td><td>4</td><td>3.0</td><td></td><td></td><td></td><td></td><td></td><td></td><td>–</td></tr><tr><td>First Quarter 2012</td><td>2</td><td>1.6</td><td>5</td><td>3.9</td><td></td><td></td><td></td><td></td><td>1,522</td></tr><tr><td>Fourth Quarter 2011</td><td>5</td><td>5.6</td><td>7</td><td>7.8</td><td>13</td><td>14.4</td><td></td><td></td><td>4,598</td></tr><tr><td>Third Quarter 2011</td><td>2</td><td>1.8</td><td>2</td><td>1.8</td><td>6</td><td>5.5</td><td>14</td><td>12.7</td><td>2,644</td></tr><tr><td>Second Quarter 2011</td><td>4</td><td>3.9</td><td>4</td><td>3.9</td><td>3</td><td>2.9</td><td>5</td><td>4.9</td><td>1,915</td></tr><tr><td> Temporary Modifications</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> Home Equity</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Second Quarter 2012</td><td>33</td><td>11.0%</td><td></td><td></td><td></td><td></td><td></td><td></td><td>$3,384</td></tr><tr><td>First Quarter 2012</td><td>33</td><td>7.1</td><td>46</td><td>9.9%</td><td></td><td></td><td></td><td></td><td>3,388</td></tr><tr><td>Fourth Quarter 2011</td><td>26</td><td>5.2</td><td>39</td><td>7.8</td><td>53</td><td>10.6%</td><td></td><td></td><td>4,688</td></tr><tr><td>Third Quarter 2011</td><td>42</td><td>9.8</td><td>50</td><td>11.7</td><td>65</td><td>15.2</td><td>76</td><td>17.8%</td><td>8,158</td></tr><tr><td>Second Quarter 2011</td><td>63</td><td>10.7</td><td>92</td><td>15.6</td><td>113</td><td>19.2</td><td>135</td><td>22.9</td><td>14,077</td></tr></table>
(a) An account is considered in re-default if it is 60 days or more delinquent after modification. The data in this table represents loan modifications completed during the quarters ending June 30, 2011 through June 30, 2012 and represents a vintage look at all quarterly accounts and the number of those modified accounts (for each quarterly vintage) 60 days or more delinquent at six, nine, twelve, and fifteen months after modification. Account totals include active and inactive accounts that were delinquent when they achieved inactive status. (b) Vintage refers to the quarter in which the modification occurred. (c) Reflects December 31, 2012 unpaid principal balances of the re-defaulted accounts for the Second Quarter 2012 Vintage at Six Months, for the First Quarter 2012 Vintage at Nine Months, for the Fourth Quarter 2011 Vintage at Twelve Months, and for the Third and Second Quarter 2011 at Fifteen Months. In addition to temporary loan modifications, we may make available to a borrower a payment plan or a HAMP trial payment period. Under a payment plan or a HAMP trial payment period, there is no change to the loan’s contractual terms so the borrower remains legally responsible for payment of the loan under its original terms. A payment plan involves the borrower paying the past due amounts over a short period of time, generally three months, in addition to the contractual payment amounts over that period upon which a borrower is brought current. Due to the short term nature of the payment plan there is a minimal impact to the ALLL. Under a HAMP trial payment period, we establish an alternate payment, generally at an amount less than the contractual payment amount, for the borrower during this short time period. This allows a borrower to demonstrate successful payment performance before permanently restructuring the loan into a HAMP modification. Subsequent to successful In April 2011, the FASB issued ASU 2011-03 Transfers and Servicing (Topic 860), Reconsideration of Effective Control for Repurchase Agreements. This ASU removes from the assessment of effective control (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control have not been changed by this ASU. The adoption of ASU 2011-03 on January 1, 2012 did not have a material effect on our results of operations or financial position. NOTE 2 ACQUISITION AND DIVESTITURE ACTIVITY RBC BANK (USA) ACQUISITION On March 2, 2012, PNC acquired 100% of the issued and outstanding common stock of RBC Bank (USA), the US retail banking subsidiary of Royal Bank of Canada. As part of the acquisition, PNC also purchased a credit card portfolio from RBC Bank (Georgia), National Association. PNC paid $3.6 billion in cash as consideration for the acquisition of both RBC Bank (USA) and the credit card portfolio. The transactions added approximately $18.1 billion of deposits and $14.5 billion of loans to PNC’s Consolidated Balance Sheet. RBC Bank (USA), based in Raleigh, North Carolina, operated more than 400 branches in North Carolina, Florida, Alabama, Georgia, Virginia and South Carolina. The primary reasons for the acquisition of RBC were to enhance shareholder value, to improve PNC’s competitive position in the financial services industry, and to further expand PNC’s existing branch network in the states where it currently operates as well as expanding into new markets. The RBC Bank (USA) transactions noted above were accounted for using the acquisition method of accounting and, as such, assets acquired, liabilities assumed and consideration exchanged were recorded at their estimated fair value on the acquisition date. All acquired loans were also recorded at fair value. No allowance for loan losses was carried over and no allowance was created at acquisition. In connection with the acquisition, the assets acquired, and the liabilities assumed, were recorded at fair value on the date of acquisition, as summarized in the following table: Table 55: RBC Bank (USA) Purchase Accounting (a) (b)
<table><tr><td></td><td colspan="3">As of March 2, 2012</td></tr><tr><td>Intangible Assets (in millions)</td><td rowspan="3">FairValue $16 164</td><td rowspan="3">WeightedLife 68 months 144 months</td><td rowspan="3">Amortization Method (a) Accelerated</td></tr><tr><td>Residential mortgage servicing rights</td></tr><tr><td>Core deposits</td></tr><tr><td>Total</td><td>$180</td><td></td><td></td></tr></table>
(a) The table above has been updated to reflect certain immaterial adjustments, including final purchase price settlement. (b) These amounts include assets and deposits related to Smartstreet, which was sold effective October 26, 2012. (c) These items are considered as non-cash activity for the Consolidated Statement of Cash Flows. In many cases the determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. The most significant of these determinations related to the fair valuation of acquired loans. See Note 6 Purchased Loans for further discussion of the accounting for purchased impaired and purchased non-impaired loans, including the determination of fair value for acquired loans. The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition, and represents the excess purchase price over the estimated fair value of the net assets acquired by PNC. The goodwill was assigned primarily to PNC’s Retail Banking and Corporate & Institutional Banking segments, and is not deductible for income tax purposes. Other intangible assets acquired, as of March 2, 2012 consisted of the following: Table 56: RBC Bank (USA) Intangible Assets
<table><tr><td> Purchase price as of March 2, 2012</td><td>$3,599</td></tr><tr><td> Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value (c)</td><td></td></tr><tr><td>Cash due from banks</td><td>305</td></tr><tr><td>Trading assets, interest-earning deposits with banks, and other short-term investments</td><td>1,493</td></tr><tr><td>Loans held for sale</td><td>97</td></tr><tr><td>Investment securities</td><td>2,349</td></tr><tr><td>Net loans</td><td>14,512</td></tr><tr><td>Other intangible assets</td><td>180</td></tr><tr><td>Equity investments</td><td>35</td></tr><tr><td>Other assets</td><td>3,383</td></tr><tr><td>Deposits</td><td>-18,094</td></tr><tr><td>Other borrowed funds</td><td>-1,321</td></tr><tr><td>Other liabilities</td><td>-290</td></tr><tr><td>Total fair value of identifiable net assets</td><td>2,649</td></tr><tr><td> Goodwill</td><td>$950</td></tr></table>
(a) Intangible asset accounted for at fair value. TROUBLED DEBT RESTRUCTURINGS (TDRS) A TDR is a loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from our loss mitigation activities and include rate reductions, principal forgiveness, postponement/reduction of scheduled amortization, extensions, and bankruptcy discharges where no formal reaffirmation was provided by the borrower and therefore a concession has been granted based upon discharge from personal liability, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. In those situations where principal is forgiven, the amount of such principal forgiveness is immediately charged off. Some TDRs may not ultimately result in the full collection of principal and interest, as restructured, and result in potential incremental losses. These potential incremental losses have been factored into our overall ALLL estimate. The level of any subsequent defaults will likely be affected by future economic conditions. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is ultimately repaid in full, the collateral is foreclosed upon, or it is fully charged off. We held specific reserves in the ALLL of $587 million and $580 million at December 31, 2012 and December 31, 2011, respectively, for the total TDR portfolio. Table 71: Summary of Troubled Debt Restructurings
<table><tr><td>In millions</td><td>Dec. 312012</td><td>Dec. 312011</td></tr><tr><td>Total consumer lending (a)</td><td>$2,318</td><td>$1,798</td></tr><tr><td>Total commercial lending</td><td>541</td><td>405</td></tr><tr><td>Total TDRs</td><td>$2,859</td><td>$2,203</td></tr><tr><td>Nonperforming</td><td>$1,589</td><td>$1,141</td></tr><tr><td>Accruing (b)</td><td>1,037</td><td>771</td></tr><tr><td>Credit card (c)</td><td>233</td><td>291</td></tr><tr><td>Total TDRs</td><td>$2,859</td><td>$2,203</td></tr></table>
(a) Pursuant to regulatory guidance issued in the third quarter of 2012, additional troubled debt restructurings related to changes in treatment of certain loans of $366 million in 2012, net of charge-offs, resulting from bankruptcy where no formal reaffirmation was provided by the borrower and therefore a concession has been granted based upon discharge from personal liability were added to the consumer lending population. The additional TDR population increased nonperforming loans by $288 million. Charge-offs have been taken where the fair value less costs to sell the collateral was less than the recorded investment of the loan and were $128.1 million. Of these nonperforming loans, approximately 78% were current on their payments at December 31, 2012. (b) Accruing loans have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans. (c) Includes credit cards and certain small business and consumer credit agreements whose terms have been restructured and are TDRs. However, since our policy is to exempt these loans from being placed on nonaccrual status as permitted by regulatory guidance as generally these loans are directly charged off in the period that they become 180 days past due, these loans are excluded from nonperforming loans. The following table quantifies the number of loans that were classified as TDRs as well as the change in the recorded investments as a result of the TDR classification during the years ended December 31, 2012 and 2011. Additionally, the table provides information about the types of TDR concessions. The Principal Forgiveness TDR category includes principal forgiveness and accrued interest forgiveness. These types of TDRs result in a write down of the recorded investment and a charge-off if such action has not already taken place. The Rate Reduction TDR category includes reduced interest rate and interest deferral. The TDRs within this category would result in reductions to future interest income. The Other TDR category primarily includes postponement/reduction of scheduled amortization, as well as contractual extensions. In some cases, there have been multiple concessions granted on one loan. When there have been multiple concessions granted, the principal forgiveness TDR was prioritized for purposes of determining the inclusion in the table below. For example, if there is principal forgiveness in conjunction with lower interest rate and postponement of amortization, the type of concession will be reported as Principal Forgiveness. Second in priority would be rate reduction. For example, if there is an interest rate reduction in conjunction with postponement of amortization, the type of concession will be reported as a Rate Reduction. We sold $2.2 billion of commercial mortgages held for sale carried at the lower of cost or market in 2012. The comparable amount in 2011 was $2.4 billion. The increase in these loans to $620 million at December 31, 2012, compared to $451 million at December 31, 2011, was due to an increase in loans awaiting sale to government agencies. We recognized total net gains of $41 million in 2012 and $48 million in 2011 on the valuation and sale of commercial mortgage loans held for sale, net of hedges. Residential mortgage loan origination volume was $15.2 billion in 2012 compared with $11.4 billion in 2011. Substantially all such loans were originated under agency or Federal Housing Administration (FHA) standards. We sold $13.8 billion of loans and recognized related gains of $747 million during 2012. The comparable amounts for 2011 were $11.9 billion and $384 million, respectively. Interest income on loans held for sale was $168 million in 2012 and $193 million in 2011. These amounts are included in Other interest income on our Consolidated Income Statement. Additional information regarding our loan sale and servicing activities is included in Note 3 Loan Sale and Servicing Activities and Variable Interest Entities in our Notes To Consolidated Financial Statements included in Item 8 of this Report. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets totaled $10.9 billion at December 31, 2012 and $10.1 billion at December 31, 2011. During 2012, we recorded goodwill of $950 million and other intangible assets of $180 million associated with the RBC Bank (USA) acquisition. In the fourth quarter of 2012, we sold certain deposits and assets of the Smartstreet business unit, which was acquired by PNC as part of the RBC Bank (USA) acquisition, which resulted in a reduction of goodwill and core deposit intangibles by approximately $46 million and $13 million, respectively. Also in the fourth quarter of 2012, we recorded a $45 million noncash charge for goodwill impairment related to PNC’s Residential Mortgage Banking business segment. See Note 2 Acquisition and Divestiture Activity and Note 10 Goodwill and Other Intangible Assets in the Notes To Consolidated Financial Statements included in Item 8 of this Report. FUNDING AND CAPITAL SOURCES Table 16: Details Of Funding Sources |
-252 | In the year with largest amount of U.S. Government and agency obligations, what's the sum of Qualified Plans for U.S. plans for Pension plans? (in million) | 9. RETIREMENT BENEFITS The Company has several non-contributory defined benefit pension plans covering certain U. S. employees and has various defined benefit pension and termination indemnity plans covering employees outside the United States. The U. S. qualified defined benefit plan provides benefits under a cash balance formula. However, employees satisfying certain age and service requirements remain covered by a prior final average pay formula under that plan. Effective January1, 2008, the U. S. qualified pension plan was frozen for most employees. Accordingly, no additional compensation-based contributions were credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered Net (Benefit) Expense under the prior final pay plan formula continue to accrue benefits. The Company also offers postretirement health care and life insurance benefits to certain eligible U. S. retired employees, as well as to certain eligible employees outside the United States. The following tables summarize the components of net (benefit) expense recognized in the Consolidated Statement of Income and the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s U. S. qualified and nonqualified pension plans, postretirement plans and plans outside the United States. The Company uses a December31 measurement date for the U. S. plans as well as the plans outside the United States.
<table><tr><td></td><td colspan="6">Pension plans</td><td colspan="6">Postretirement benefit plans</td></tr><tr><td></td><td colspan="3">U.S. plans</td><td colspan="3">Non-U.S. plans</td><td colspan="3">U.S. plans</td><td colspan="3">Non-U.S. plans</td></tr><tr><td>In millions of dollars</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td><td>2010</td><td>2009</td><td>2008</td></tr><tr><td>Qualified Plans</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Benefits earned during the year</td><td>$14</td><td>$18</td><td>$23</td><td>$167</td><td>$148</td><td>$201</td><td>$1</td><td>$1</td><td>$1</td><td>$23</td><td>$26</td><td>$36</td></tr><tr><td>Interest cost on benefit obligation</td><td>644</td><td>649</td><td>674</td><td>342</td><td>301</td><td>354</td><td>59</td><td>61</td><td>62</td><td>105</td><td>89</td><td>96</td></tr><tr><td>Expected return on plan assets</td><td>-874</td><td>-912</td><td>-949</td><td>-378</td><td>-336</td><td>-487</td><td>-8</td><td>-10</td><td>-12</td><td>-100</td><td>-77</td><td>-109</td></tr><tr><td>Amortization of unrecognized</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net transition obligation</td><td>—</td><td>—</td><td>—</td><td>-1</td><td>-1</td><td>1</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Prior service cost (benefit)</td><td>-1</td><td>-1</td><td>-2</td><td>4</td><td>4</td><td>4</td><td>-3</td><td>-1</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net actuarial loss</td><td>47</td><td>10</td><td>—</td><td>57</td><td>60</td><td>24</td><td>11</td><td>2</td><td>4</td><td>20</td><td>18</td><td>21</td></tr><tr><td>Curtailment loss-1</td><td>—</td><td>47</td><td>56</td><td>13</td><td>22</td><td>108</td><td>—</td><td>—</td><td>16</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Net qualified (benefit) expense</td><td>$-170</td><td>$-189</td><td>$-198</td><td>$204</td><td>$198</td><td>$205</td><td>$60</td><td>$53</td><td>$71</td><td>$48</td><td>$56</td><td>$44</td></tr><tr><td>Nonqualified (benefit) expense</td><td>$41</td><td>$41</td><td>$38</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr><tr><td>Total net (benefit) expense</td><td>$-129</td><td>$-148</td><td>$-160</td><td>$204</td><td>$198</td><td>$205</td><td>$60</td><td>$53</td><td>$71</td><td>$48</td><td>$56</td><td>$44</td></tr></table>
(1) The 2009 curtailment loss in the non-U. S pension plans includes an $18 million gain reflecting the sale of Citigroup’s Nikko operations. See Note 3 to the Consolidated Financial Statements for further discussion of the sale of Nikko operations. The estimated net actuarial loss, prior service cost and net transition obligation that will be amortized from Accumulated other comprehensive income (loss) into net expense in 2011 are approximately $147 million, $2 million and $(1) million, respectively, for defined benefit pension plans. For postretirement plans, the estimated 2011 net actuarial loss and prior service cost amortizations are approximately $41 million and $(3) million, respectively SPECIAL ASSET POOL Special Asset Pool (SAP), which constituted approximately 22% of Citi Holdings by assets as of December 31, 2010, is a portfolio of securities, loans and other assets that Citigroup intends to actively reduce over time through asset sales and portfolio run-off. At December 31, 2010, SAP had $80 billion of assets. SAP assets have declined by $248 billion, or 76%, from peak levels in 2007 reflecting cumulative write-downs, asset sales and portfolio run-off.
<table><tr><td>In millions of dollars</td><td>2010</td><td>2009</td><td>2008</td><td>% Change 2010 vs. 2009</td><td>% Change 2009 vs. 2008</td></tr><tr><td>Net interest revenue</td><td>$1,219</td><td>$2,754</td><td>$2,676</td><td>-56%</td><td>3%</td></tr><tr><td>Non-interest revenue</td><td>1,633</td><td>-6,014</td><td>-42,375</td><td>NM</td><td>86</td></tr><tr><td>Revenues, net of interest expense</td><td>$2,852</td><td>$-3,260</td><td>$-39,699</td><td>NM</td><td>92%</td></tr><tr><td>Total operating expenses</td><td>$548</td><td>$824</td><td>$893</td><td>-33%</td><td>-8%</td></tr><tr><td>Net credit losses</td><td>$2,013</td><td>$5,399</td><td>$906</td><td>-63%</td><td>NM</td></tr><tr><td>Provision (releases) for unfunded lending commitments</td><td>-76</td><td>111</td><td>-172</td><td>NM</td><td>NM</td></tr><tr><td>Credit reserve builds (releases)</td><td>-1,711</td><td>-530</td><td>2,677</td><td>NM</td><td>NM</td></tr><tr><td>Provisions for credit losses and for benefits and claims</td><td>$226</td><td>$4,980</td><td>$3,411</td><td>-95%</td><td>46%</td></tr><tr><td>Income (loss) from continuing operations before taxes</td><td>$2,078</td><td>$-9,064</td><td>$-44,003</td><td>NM</td><td>79%</td></tr><tr><td>Income taxes (benefits)</td><td>905</td><td>-3,695</td><td>-16,714</td><td>NM</td><td>78</td></tr><tr><td>Net income (loss) from continuing operations</td><td>$1,173</td><td>$-5,369</td><td>$-27,289</td><td>NM</td><td>80%</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>188</td><td>-16</td><td>-205</td><td>NM</td><td>92</td></tr><tr><td>Net income (loss)</td><td>$985</td><td>$-5,353</td><td>$-27,084</td><td>NM</td><td>80%</td></tr><tr><td>EOP assets(in billions of dollars)</td><td>$80</td><td>$136</td><td>$219</td><td>-41%</td><td>-38%</td></tr></table>
2010 vs. 2009 Revenues, net of interest expense increased $6.1 billion, primarily due to the improvement of revenue marks in 2010. Aggregate marks were negative $2.6 billion in 2009 as compared to positive marks of $3.4 billion in 2010 (see “Items Impacting SAP Revenues” below). Revenue in the current year included positive marks of $2.0 billion related to sub-prime related direct exposure, a positive $0.5 billion CVA related to the monoline insurers, and $0.4 billion on private equity positions. These positive marks were partially offset by negative revenues of $0.5 billion on Alt-A mortgages and $0.4 billion on commercial real estate. Operating expenses decreased 33% in 2010, mainly driven by the absence of the U. S. government loss-sharing agreement, lower compensation, and lower transaction expenses. Provisions for credit losses and for benefits and claims decreased $4.8 billion due to a decrease in net credit losses of $3.4 billion and a higher release of loan loss reserves and unfunded lending commitments of $1.4 billion. Assets declined 41% from the prior year, primarily driven by sales and amortization and prepayments. Asset sales of $39 billion for the year of 2010 generated pretax gains of approximately $1.3 billion.2009 vs. 2008 Revenues, net of interest expense increased $36.4 billion in 2009, primarily due to the absence of significant negative revenue marks occurring in the prior year. Total negative marks were $2.6 billion in 2009 as compared to $37.4 billion in 2008. Revenue in 2009 included positive marks of $0.8 billion on subprime-related direct exposures. These positive revenues were partially offset by negative revenues of $1.5 billion on Alt-A mortgages, $0.8 billion of write-downs on commercial real estate, and a negative $1.6 billion CVA on the monoline insurers and fair value option liabilities. Revenue was also affected by negative marks on private equity positions and write-downs on highly leveraged finance commitments. Operating expenses decreased 8% in 2009, mainly driven by lower compensation and lower volumes and transaction expenses, partially offset by costs associated with the U. S. government loss-sharing agreement exited in the fourth quarter of 2009. Provisions for credit losses and for benefits and claims increased $1.6 billion, primarily driven by $4.5 billion in increased net credit losses, partially offset by a lower provision for loan losses and unfunded lending commitments of $2.9 billion. Assets declined 38% versus the prior year, primarily driven by amortization and prepayments, sales, marks and charge-offs. Investment Securities Investment securities totaled $5,215.4 million, or 40% of total assets at December 31, 2008, and $4,650.4 million, or 36% of total assets at December 31, 2007. Debt securities, detailed below, comprised over 99% of this investment portfolio. The fair value of debt securities were as follows at December 31, 2008 and 2007:
<table><tr><td></td><td> December 31, 2008</td><td>Percentage of Total</td><td> December 31, 2007</td><td> Percentage of Total</td></tr><tr><td></td><td colspan="4"> (dollars in thousands)</td></tr><tr><td>U.S. Government and agency obligations</td><td>$1,883,378</td><td>36.2%</td><td>$984,003</td><td>21.2%</td></tr><tr><td>Tax exempt municipal securities</td><td>1,689,462</td><td>32.5%</td><td>1,864,991</td><td>40.2%</td></tr><tr><td>Mortgage and asset-backed securities</td><td>766,202</td><td>14.7%</td><td>910,662</td><td>19.6%</td></tr><tr><td>Corporate securities</td><td>841,397</td><td>16.2%</td><td>863,866</td><td>18.6%</td></tr><tr><td>Redeemable preferred stocks</td><td>19,702</td><td>0.4%</td><td>15,558</td><td>0.4%</td></tr><tr><td>Total debt securities</td><td>$5,200,141</td><td>100.0%</td><td>$4,639,080</td><td>100.0%</td></tr></table>
More than 98% of our debt securities were of investment-grade quality, with an average credit rating of AA+ by S&P at December 31, 2008. Most of the debt securities that are below investment grade are rated at the higher end (BB or better) of the non-investment grade spectrum. Our investment policy limits investments in a single issuer and requires diversification among various asset types. U. S. Government and agency obligations include $1,431.6 million at December 31, 2008 and $791.8 million at December 31, 2007 of debt securities issued by agencies of the U. S. Government including Federal National Mortgage Association, or Fannie Mae, and Federal Home Loan Mortgage Association, or Freddie Mac, whose principal payment is guaranteed by the U. S. Government. Tax exempt municipal securities included pre-refunded bonds of $694.8 million at December 31, 2008 and $182.2 million at December 31, 2007. These pre-refunded bonds are secured by an escrow fund consisting of U. S. government obligations sufficient to pay off all amounts outstanding at maturity. The ratings of these pre-refunded bonds generally assume the rating of the government obligations (AAA by S&P) at the time the fund is established. In addition, certain monoline insurers guarantee the timely repayment of bond principal and interest when a bond issuer defaults and generally provide credit enhancement for bond issues related to our tax exempt municipal securities. We have no direct exposure to these monoline insurers. We owned $452.4 million and $662.4 million at December 31, 2008 and 2007, respectively of tax exempt securities guaranteed by monoline insurers. The equivalent S&P credit rating of these tax-exempt securities without the guarantee from the monoline insurer was AA-. Our direct exposure to subprime mortgage lending is limited to investment in residential mortgage-backed securities and asset-backed securities backed by home equity loans. The fair value of securities backed by Alt-A and subprime loans was $7.6 million at December 31, 2008 and $22.0 million at December 31, 2007. There are no collateralized debt obligations or structured investment vehicles in our investment portfolio. The percentage of corporate securities associated with the financial services industry was 42.4% at December 31, 2008 and 48.4% at December 31, 2007. Duration is indicative of the relationship between changes in market value and changes in interest rates, providing a general indication of the sensitivity of the fair values of our debt securities to changes in interest rates. However, actual market values may differ significantly from estimates based on duration. The average duration of our debt securities was approximately 4.2 years at December 31, 2008. Including cash equivalents, the average duration was approximately 3.4 years. Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the fair value of our securities by approximately $229 million. |
6,329 | What is the sum of the Case reserves in the years in gross where Case reserves is positive? (in million) | The following table illustrates the effect that a 10% unfavorable or favorable movement in foreign currency exchange rates, relative to the U. S. dollar, would have on the fair value of our forward exchange contracts as of October 30, 2010 and October 31, 2009:
<table><tr><td></td><td>October 30, 2010</td><td>October 31, 2009</td></tr><tr><td>Fair value of forward exchange contracts asset</td><td>$7,256</td><td>$8,367</td></tr><tr><td>Fair value of forward exchange contracts after a 10% unfavorable movement in foreign currency exchange rates asset</td><td>$22,062</td><td>$20,132</td></tr><tr><td>Fair value of forward exchange contracts after a 10% favorable movement in foreign currency exchange rates liability</td><td>$-7,396</td><td>$-6,781</td></tr></table>
The calculation assumes that each exchange rate would change in the same direction relative to the U. S. dollar. In addition to the direct effects of changes in exchange rates, such changes typically affect the volume of sales or the foreign currency sales price as competitors’ products become more or less attractive. Our sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) ACE Limited and Subsidiaries Under Swiss corporate law, the Company may not generally issue Common Shares below their par value. In the event there is a need to raise common equity at a time when the trading price of the Company’s Common Shares is below par value, the Company will need to obtain shareholder approval to decrease the par value of the Common Shares. b) Shares issued, outstanding, authorized, and conditional Following is a table of changes in Common Shares issued and outstanding for the years ended December 31, 2009, 2008, and 2007:
<table><tr><td></td><td>2009</td><td>2008</td><td>2007</td></tr><tr><td>Shares issued, beginning of year</td><td>335,413,501</td><td>329,704,531</td><td>326,455,468</td></tr><tr><td>Shares issued, net</td><td>2,000,000</td><td>3,140,194</td><td>1,213,663</td></tr><tr><td>Exercise of stock options</td><td>168,720</td><td>2,365,401</td><td>1,830,004</td></tr><tr><td>Shares issued under Employee Stock Purchase Plan</td><td>259,395</td><td>203,375</td><td>205,396</td></tr><tr><td>Shares issued, end of year</td><td>337,841,616</td><td>335,413,501</td><td>329,704,531</td></tr><tr><td>Common Shares in treasury, end of year</td><td>-1,316,959</td><td>-1,768,030</td><td>–</td></tr><tr><td>Shares issued and outstanding, end of year</td><td>336,524,657</td><td>333,645,471</td><td>329,704,531</td></tr><tr><td> <i>Common Shares issued to employee trust</i></td><td></td><td></td><td></td></tr><tr><td>Balance, beginning of year</td><td>-108,981</td><td>-117,231</td><td>-166,425</td></tr><tr><td>Shares redeemed</td><td>7,500</td><td>8,250</td><td>49,194</td></tr><tr><td>Balance, end of year</td><td>-101,481</td><td>-108,981</td><td>-117,231</td></tr></table>
In July 2008, prior to the Continuation, the Company issued and placed 2,000,000 Common Shares in treasury principally for issuance upon the exercise of employee stock options. At December 31, 2009, 1,316,959 Common Shares remain in treasury after net shares redeemed under employee share-based compensation plans. Common Shares issued to employee trust are the shares issued by the Company to a rabbi trust for deferred compensation obligations as discussed in Note 12 f) below. Shares authorized The Board is currently authorized to increase the share capital from time to time through the issuance of up to 99,750,000 fully paid up Common Shares with a par value of CHF 31.88 each. Conditional share capital for bonds and similar debt instruments The share capital of the Company may be increased through the issuance of a maximum of 33,000,000 Common Shares with a par value of CHF 31.88 each, payable in full, through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes, or similar instruments, issued or to be issued by the Company, including convertible debt instruments. Conditional share capital for employee benefit plans The share capital of the Company may be increased through the issuance of a maximum of 30,401,725 Common Shares with a par value of CHF 31.88 each, payable in full, in connection with the exercise of option rights granted to any employee of the Company, and any consultant, director, or other person providing services to the Company. c) ACE Limited securities repurchase authorization In November 2001, the Board authorized the repurchase of any ACE issued debt or capital securities, which includes ACE’s Common Shares, up to an aggregate total of $250 million. These purchases may take place from time to time in the open market or in private purchase transactions. At December 31, 2009, this authorization had not been utilized. d) General restrictions The holders of the Common Shares are entitled to receive dividends as proposed by the Board and approved by the shareholders. Holders of Common Shares are allowed one vote per share provided that, if the controlled shares of any shareholder constitute ten percent or more of the outstanding Common Shares of the Company, only a fraction of the vote will be allowed The process of establishing loss reserves for property and casualty claims can be complex and is subject to considerable uncertainty as it requires the use of informed estimates and judgments based on circumstances known at the date of accrual. The following table shows our total reserves segregated between case reserves (including loss expense reserves) and IBNR reserves at December 31, 2009 and 2008.
<table><tr><td></td><td colspan="3"> 2009</td><td colspan="3">2008</td></tr><tr><td>(in millions of U.S. dollars)</td><td> Gross</td><td> Ceded</td><td> Net</td><td>Gross</td><td>Ceded</td><td>Net</td></tr><tr><td>Case reserves</td><td>$17,307</td><td>$6,664</td><td>$10,643</td><td>$16,583</td><td>$6,539</td><td>$10,044</td></tr><tr><td>IBNR reserves</td><td>20,476</td><td>6,081</td><td>14,395</td><td>20,593</td><td>6,396</td><td>14,197</td></tr><tr><td>Total</td><td>$37,783</td><td>$12,745</td><td>$25,038</td><td>$37,176</td><td>$12,935</td><td>$24,241</td></tr></table>
The following table segregates loss reserves by line of business including property and all other, casualty, and personal accident (A&H) at December 31, 2009 and 2008. In the table, loss expenses are defined to include unallocated and allocated loss adjustment expenses. For certain lines, in particular ACE International and ACE Bermuda products, loss adjustment expenses are partially included in IBNR and partially included in loss expenses.
<table><tr><td></td><td colspan="3"> 2009</td><td colspan="3">2008</td></tr><tr><td>(in millions of U.S. dollars)</td><td> Gross</td><td> Ceded</td><td> Net</td><td>Gross</td><td>Ceded</td><td>Net</td></tr><tr><td><i>Property and all other</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Case reserves</td><td>$3,149</td><td>$1,600</td><td>$1,549</td><td>$3,180</td><td>$1,367</td><td>$1,813</td></tr><tr><td>Loss expenses</td><td>260</td><td>81</td><td>179</td><td>264</td><td>92</td><td>172</td></tr><tr><td>IBNR reserves</td><td>2,028</td><td>815</td><td>1,213</td><td>2,456</td><td>1,084</td><td>1,372</td></tr><tr><td>Subtotal</td><td>5,437</td><td>2,496</td><td>2,941</td><td>5,900</td><td>2,543</td><td>3,357</td></tr><tr><td><i>Casualty</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Case reserves</td><td>9,506</td><td>3,177</td><td>6,329</td><td>8,700</td><td>3,178</td><td>5,522</td></tr><tr><td>Loss expenses</td><td>3,773</td><td>1,661</td><td>2,112</td><td>3,871</td><td>1,779</td><td>2,092</td></tr><tr><td>IBNR reserves</td><td>17,777</td><td>5,110</td><td>12,667</td><td>17,455</td><td>5,144</td><td>12,311</td></tr><tr><td>Subtotal</td><td>31,056</td><td>9,948</td><td>21,108</td><td>30,026</td><td>10,101</td><td>19,925</td></tr><tr><td><i>A&H</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Case reserves</td><td>588</td><td>144</td><td>444</td><td>536</td><td>121</td><td>415</td></tr><tr><td>Loss expenses</td><td>31</td><td>1</td><td>30</td><td>32</td><td>2</td><td>30</td></tr><tr><td>IBNR reserves</td><td>671</td><td>156</td><td>515</td><td>682</td><td>168</td><td>514</td></tr><tr><td>Subtotal</td><td>1,290</td><td>301</td><td>989</td><td>1,250</td><td>291</td><td>959</td></tr><tr><td><i>Total</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Case reserves</td><td>13,243</td><td>4,921</td><td>8,322</td><td>12,416</td><td>4,666</td><td>7,750</td></tr><tr><td>Loss expenses</td><td>4,064</td><td>1,743</td><td>2,321</td><td>4,167</td><td>1,873</td><td>2,294</td></tr><tr><td>IBNR reserves</td><td>20,476</td><td>6,081</td><td>14,395</td><td>20,593</td><td>6,396</td><td>14,197</td></tr><tr><td>Total</td><td>$37,783</td><td>$12,745</td><td>$25,038</td><td>$37,176</td><td>$12,935</td><td>$24,241</td></tr></table>
The judgments used to estimate unpaid loss and loss expense reserves require different considerations depending upon the individual circumstances underlying the insured loss. For example, the reserves established for high excess casualty claims, A&E claims, claims from major catastrophic events, or the IBNR for our various product lines each require different assumptions and judgments to be made. Necessary judgments are based on numerous factors and may be revised as additional experience and other data become available and are reviewed, as new or improved methods are developed, or as laws change. Hence, ultimate loss payments may differ from the estimate of the ultimate liabilities made at the balance sheet date. Changes to our previous estimates of prior period loss reserves impact the reported calendar year underwriting results by worsening our reported results if the prior year reserves prove to be deficient or improving our reported results if the prior year reserves prove to be redundant. The potential for variation in loss reserves is impacted by numerous factors, which we discuss below. We establish loss and loss expense reserves for our liabilities from claims for all of the insurance and reinsurance business that we write. For those claims reported by insureds or ceding companies to us prior to the balance sheet date, and |
2,071,126 | What's the sum of Share repurchase program in the range of 1000000 and 2000000 in October, 2013? | PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades principally on The New York Stock Exchange under the trading symbol AMP. As of February 14, 2014, we had approximately 16,877 common shareholders of record. Price and dividend information concerning our common shares may be found in Note 27 to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. Information regarding our equity compensation plans can be found in Part III, Item 12 of this Annual Report on Form 10-K. Information comparing the cumulative total shareholder return on our common stock to the cumulative total return for certain indices is set forth under the heading ‘‘Performance Graph’’ provided in our 2013 Annual Report to Shareholders and is incorporated herein by reference. We are primarily a holding company and, as a result, our ability to pay dividends in the future will depend on receiving dividends from our subsidiaries. For information regarding our ability to pay dividends, see the information set forth under the heading ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources’’ contained in Part II, Item 7 of this Annual Report on Form 10-K. Share Repurchases The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any ‘‘affiliated purchaser’’ (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during the fourth quarter of 2013:
<table><tr><td>Period</td><td>(a)(b) Total Number of Shares Purchased</td><td>Average Price Paid Per Share</td><td>(c)(d) Total Number of Shares Purchased as part of Publicly Announced Plans or Programs<sup>(1)</sup></td><td>Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs<sup>-1</sup></td></tr><tr><td>October 1 to October 31, 2013</td><td></td><td></td><td></td><td></td></tr><tr><td>Share repurchase program<sup>-1</sup></td><td>1,035,563</td><td>$95.18</td><td>1,035,563</td><td>$922,140,624</td></tr><tr><td>Employee transactions<sup>-2</sup></td><td>33,527</td><td>$98.27</td><td>N/A</td><td>N/A</td></tr><tr><td>November 1 to November 30, 2013</td><td></td><td></td><td></td><td></td></tr><tr><td>Share repurchase program<sup>-1</sup></td><td>1,197,675</td><td>$105.06</td><td>1,197,675</td><td>$796,314,230</td></tr><tr><td>Employee transactions<sup>-2</sup></td><td>169,513</td><td>$103.71</td><td>N/A</td><td>N/A</td></tr><tr><td>December 1 to December 31, 2013</td><td></td><td></td><td></td><td></td></tr><tr><td>Share repurchase program<sup>-1</sup></td><td>1,337,802</td><td>$109.88</td><td>1,337,802</td><td>$649,313,523</td></tr><tr><td>Employee transactions<sup>-2</sup></td><td>34,373</td><td>$109.58</td><td>N/A</td><td>N/A</td></tr><tr><td>Totals</td><td></td><td></td><td></td><td></td></tr><tr><td>Share repurchase program<sup>-1</sup></td><td>3,571,040</td><td>$104.00</td><td>3,571,040</td><td></td></tr><tr><td>Employee transactions<sup>-2</sup></td><td>237,413</td><td>$103.79</td><td>N/A</td><td></td></tr><tr><td></td><td>3,808,453</td><td></td><td>3,571,040</td><td></td></tr></table>
N/A Not applicable. (1) On October 24, 2012, we announced that our board of directors authorized us to repurchase up to $2.0 billion worth of our common stock through 2014. The share repurchase program does not require the purchase of any minimum number of shares, and depending on market conditions and other factors, these purchases may be commenced or suspended at any time without prior notice. Acquisitions under the share repurchase program may be made in the open market, through privately negotiated transactions or block trades or other means. (2) Includes restricted shares withheld pursuant to the terms of awards under the Company’s share-based compensation plans to offset tax withholding obligations that occur upon vesting and release of restricted shares. The value of the restricted shares withheld is the closing price of common stock of Ameriprise Financial, Inc. on the date the relevant transaction occurs. Also includes shares withheld pursuant to the net settlement of Non-Qualified Stock Option (‘‘NQSO’’) exercises to offset tax withholding obligations that occur upon exercise and to cover the strike price of the NQSO. The value of the shares withheld pursuant to the net settlement of NQSO exercises is the closing price of common stock of Ameriprise Financial, Inc. on the day prior to the date the relevant transaction occurs. expectancy of the U. S. , the Netherlands, Canada, and U. K. plan members. We amortize any prior service expense or credits that arise as a result of plan changes over a period consistent with the amortization of gains and losses. As of December 31, 2014, our pension plans have deferred losses that have not yet been recognized through income in the Consolidated Financial Statements. We amortize unrecognized actuarial losses outside of a corridor, which is defined as 10% of the greater of market-related value of plan assets or projected benefit obligation. To the extent not offset by future gains, incremental amortization as calculated above will continue to affect future pension expense similarly until fully amortized. The following table discloses our unrecognized actuarial gains and losses, the number of years over which we are amortizing the experience loss, and the estimated 2015 amortization of loss by country (amounts in millions):
<table><tr><td></td><td>U.K.</td><td>U.S.</td><td>Other</td></tr><tr><td>Unrecognized actuarial gains and losses</td><td>$1,687</td><td>$1,737</td><td>$456</td></tr><tr><td>Amortization period (in years)</td><td>8 - 30</td><td>7 - 26</td><td>15 - 42</td></tr><tr><td>Estimated 2015 amortization of loss</td><td>$42</td><td>$54</td><td>$12</td></tr></table>
The unrecognized prior service cost at December 31, 2014 was $11 million, $22 million, and $3 million in the U. S. , U. K. and Other plans. For the U. S. pension plans we use a market-related valuation of assets approach to determine the expected return on assets, which is a component of net periodic benefit cost recognized in the Consolidated Statements of Income. This approach recognizes 20% of any gains or losses in the current year's value of market-related assets, with the remaining 80% spread over the next four years. As this approach recognizes gains or losses over a five-year period, the future value of assets and therefore, our net periodic benefit cost will be impacted as previously deferred gains or losses are recorded. As of December 31, 2014, the market-related value of assets was $2.0 billion. We do not use the market-related valuation approach to determine the funded status of the U. S. plans recorded in the Consolidated Statements of Financial Position. Instead, we record and present the funded status in the Consolidated Statements of Financial Position based on the fair value of the plan assets. As of December 31, 2014, the fair value of plan assets was $2.0 billion. Our non-U. S. plans use fair value to determine expected return on assets. Rate of return on plan assets and asset allocation The following table summarizes the expected long-term rate of return on plan assets for future pension expense and the related target asset mix as of December 31, 2014:
<table><tr><td></td><td>U.K.</td><td>U.S.</td><td>Other</td></tr><tr><td>Expected return (in total)</td><td>5.2%</td><td>8.8%</td><td>4.7 - 5.6%</td></tr><tr><td>Expected return on equities -1</td><td>7.7%</td><td>9.7%</td><td>6.3 - 7.8%</td></tr><tr><td>Expected return on fixed income</td><td>4.6%</td><td>6.5%</td><td>4.0 - 4.2%</td></tr><tr><td>Asset mix:</td><td></td><td></td><td></td></tr><tr><td>Target equity -1</td><td>18.1%</td><td>70.0%</td><td>32.3 - 40%</td></tr><tr><td>Target fixed income</td><td>81.9%</td><td>30.0%</td><td>60 - 67.7%</td></tr></table>
(1) Includes investments in infrastructure, real estate, limited partnerships and hedge funds. In determining the expected rate of return for the plan assets, we analyzed investment community forecasts and current market conditions to develop expected returns for each of the asset classes used by the plans. In particular, we surveyed multiple third party financial institutions and consultants to obtain long-term expected returns on each asset class, considered historical performance data by asset class over long periods, and weighted the expected returns for each asset class by target asset allocations of the plans. The U. S. pension plan asset allocation is based on approved allocations following adopted investment guidelines. The actual asset allocation at December 31, 2014 was 61% equity and 39% fixed income securities for the qualified plan. The investment policy for each U. K. and non-U. S. pension plans is generally determined by the plans' trustees. Because there are several pension plans maintained in the U. K. and non-U. S. category, our target allocation presents a range of the target allocation of each plan. Further, target allocations are subject to change. As of December 31, 2014, the U. K. and non-U. S. plans were invested between 22% and 34% in equity and between 78% and 66% in fixed income securities. 2014 versus 2013 International segment operating profit increased 15% in 2014 compared to 2013. Operating profit for the International segment in 2014 was impacted by approximately $18.8 million due to unfavorable foreign currency translation. Furthermore, 2014 segment operating profit includes $6.1 million of restructuring charges. Operating profit margin increased to 13.4% of segment net revenues in 2014 from 12.6% of segment net revenues in 2013. The increase in operating profit in 2014 was the result of higher net revenues and favorable product mix, partially offset by higher expense levels. The improvement in operating profit margin in 2014 is primarily due to both revenue volume and mix, along with better expense leverage from higher net revenues. Entertainment and Licensing 2015 versus 2014 Entertainment and Licensing segment operating profit increased 27% in 2015 compared to 2014 and operating profit margin increased to 31.4% of net revenues in 2015 compared to 27.6% in 2014. Higher entertainment revenues related to a multi-year digital distribution agreement contributed to improved operating profit. Operating profit and operating profit margin also improved on lower amortization of intangibles and program production cost amortization. Lower amortization of intangibles reflects certain digital gaming rights which became fully amortized during the second quarter of 2015 whereas lower program product cost amortization reflects a higher level of programming write downs occurring in the second half of 2014 compared to 2015. These increases were partially offset by higher selling, distribution and administration expenses reflecting investment in expanding the global footprint of the Company’s consumer products licensing teams.2014 versus 2013 Entertainment and Licensing segment operating profit increased 33% in 2014 compared to 2013. The increase in operating profit is primarily due to the profit impact from higher net revenues from consumer products licensing, partially offset by the profit impact from lower entertainment revenues. Backflip operating losses approximated $8.7 million in 2014 and were primarily due to amortization of acquired intangibles. Other Segments and Corporate and eliminations In the Global Operations segment, operating profit of $12.0 million in 2015 compared to $15.8 million in 2014 and $6.7 million in 2013. In Corporate and eliminations, operating loss of $83.0 million in 2015 compared to operating losses of $46.1 million in 2014 and $134.3 million in 2013. The 2013 operating loss includes the following charges, $46.1 million — settlement of an adverse arbitration award and $40.6 million — other product-related charges.2013 also includes certain charges related to the write-off of early film development costs associated with films that had not yet been moved to production. OPERATING COSTS AND EXPENSES The Company’s operating expenses, stated as percentages of net revenues, are illustrated below for each year in the three fiscal years ended December 27, 2015:
<table><tr><td></td><td>2015</td><td>2014</td><td> 2013</td></tr><tr><td>Cost of sales</td><td>37.7%</td><td>39.7%</td><td>41.0%</td></tr><tr><td>Royalties</td><td>8.5</td><td>7.1</td><td>8.3</td></tr><tr><td>Product development</td><td>5.5</td><td>5.2</td><td>5.1</td></tr><tr><td>Advertising</td><td>9.2</td><td>9.8</td><td>9.8</td></tr><tr><td>Amortization of intangibles</td><td>1.0</td><td>1.2</td><td>1.9</td></tr><tr><td>Program production cost amortization</td><td>1.0</td><td>1.1</td><td>1.2</td></tr><tr><td>Selling, distribution and administration</td><td>21.6</td><td>20.9</td><td>21.3</td></tr></table>
The future minimum lease commitments under these leases at December 31, 2010 are as follows (in thousands):
<table><tr><td>2011</td><td>$62,465</td></tr><tr><td>2012</td><td>54,236</td></tr><tr><td>2013</td><td>47,860</td></tr><tr><td>2014</td><td>37,660</td></tr><tr><td>2015</td><td>28,622</td></tr><tr><td>Thereafter</td><td>79,800</td></tr><tr><td>Future Minimum Lease Payments</td><td>$310,643</td></tr></table>
Rental expense for operating leases was approximately $66.9 million, $57.2 million and $49.0 million during the years ended December 31, 2010, 2009 and 2008, respectively. In connection with the acquisitions of several businesses, we entered into agreements with several sellers of those businesses, some of whom became stockholders as a result of those acquisitions, for the lease of certain properties used in our operations. Typical lease terms under these agreements include an initial term of five years, with three to five five-year renewal options and purchase options at various times throughout the lease periods. We also maintain the right of first refusal concerning the sale of the leased property. Lease payments to an employee who became an officer of the Company after the acquisition of his business were approximately $1.0 million, $0.9 million and $0.9 million during each of the years ended December 31, 2010, 2009 and 2008, respectively. We guarantee the residual values of the majority of our truck and equipment operating leases. The residual values decline over the lease terms to a defined percentage of original cost. In the event the lessor does not realize the residual value when a piece of equipment is sold, we would be responsible for a portion of the shortfall. Similarly, if the lessor realizes more than the residual value when a piece of equipment is sold, we would be paid the amount realized over the residual value. Had we terminated all of our operating leases subject to these guarantees at December 31, 2010, the guaranteed residual value would have totaled approximately $31.4 million. We have not recorded a liability for the guaranteed residual value of equipment under operating leases as the recovery on disposition of the equipment under the leases is expected to approximate the guaranteed residual value. Litigation and Related Contingencies In December 2005 and May 2008, Ford Global Technologies, LLC filed complaints with the International Trade Commission against us and others alleging that certain aftermarket parts imported into the U. S. infringed on Ford design patents. The parties settled these matters in April 2009 pursuant to a settlement arrangement that expires in September 2011. Pursuant to the settlement, we (and our designees) became the sole distributor in the U. S. of aftermarket automotive parts that correspond to Ford collision parts that are covered by a U. S. design patent. We have paid Ford an upfront fee for these rights and will pay a royalty for each such part we sell. The amortization of the upfront fee and the royalty expenses are reflected in Cost of Goods Sold on the accompanying Consolidated Statements of Income. We also have certain other contingencies resulting from litigation, claims and other commitments and are subject to a variety of environmental and pollution control laws and regulations incident to the ordinary course of business. We currently expect that the resolution of such contingencies will not materially affect our financial position, results of operations or cash flows. |
0.35327 | What is the ratio of the Secured debt to the Total debt in 2005 Ended December 31? | Undistributed earnings of $696.9 million from certain foreign subsidiaries are considered to be permanently reinvested abroad and will not be repatriated to the United States in the foreseeable future. Because those earnings are considered to be indefinitely reinvested, no domestic federal or state deferred income taxes have been provided thereon. If we were to make a distribution of any portion of those earnings in the form of dividends or otherwise, we would be subject to both U. S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign jurisdictions. Because of the availability of U. S. foreign tax credit carryforwards, it is not practicable to determine the domestic federal income tax liability that would be payable if such earnings were no longer considered to be reinvested indefinitely. A valuation allowance is provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes to our valuation allowance during the years ended May 31, 2015 and 2014 are summarized below (in thousands):
<table><tr><td>Balance at May 31, 2013</td><td>$-28,464</td></tr><tr><td>Utilization of foreign net operating loss carryforwards</td><td>2,822</td></tr><tr><td>Allowance for foreign tax credit carryforward</td><td>18,061</td></tr><tr><td>Other</td><td>382</td></tr><tr><td>Balance at May 31, 2014</td><td>-7,199</td></tr><tr><td>Utilization of foreign net operating loss carryforwards</td><td>3,387</td></tr><tr><td>Other</td><td>-11</td></tr><tr><td>Balance at May 31, 2015</td><td>$-3,823</td></tr></table>
Net operating loss carryforwards of foreign subsidiaries totaling $12.4 million and U. S. net operating loss carryforwards previously acquired totaling $19.8 million at May 31, 2015 will expire between May 31, 2017 and May 31, 2033 if not utilized. Capital loss carryforwards of U. S. subsidiaries totaling $4.7 million will expire if not utilized by May 31, 2017. Tax credit carryforwards totaling $8.4 million at May 31, 2015 will expire between May 31, 2017 and May 31, 2023 if not utilized. We conduct business globally and file income tax returns in the U. S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities around the world. As a result of events that occurred in the fourth quarter of the year ended May 31, 2015, management concluded that it was more likely than not that the tax positions in a foreign jurisdiction, for which we had recorded estimated liabilities of $65.6 million in other noncurrent liabilities on our consolidated balance sheet, would be sustained on their technical merits based on information available as of May 31, 2015. Therefore, the liability and corresponding deferred tax assets were eliminated as of May 31, 2015. The uncertain tax positions have been subject to an ongoing examination in that foreign jurisdiction by the tax authority. Discussions and correspondence between the tax authority and us during the fourth quarter indicated that the likelihood of the positions being sustained had increased. Subsequent to May 31, 2015, we received a final closure notice regarding the examination resulting in no adjustments to taxable income related to this matter for the tax returns filed for the periods ended May 31, 2010 through May 31, 2013. The unrecognized tax benefits were effectively settled with this final closure notice. We are no longer subjected to state income tax examinations for years ended on or before May 31, 2008, U. S. federal income tax examinations for fiscal years prior to 2012 and United Kingdom federal income tax examinations for years ended on or before May 31, 2013. Item 6. SELECTED FINANCIAL DATA The following table sets forth selected consolidated financial and other information as of and for each of the years in the five-year period ended December 31, 2007. The table should be read in conjunction with our consolidated financial statements and the notes thereto, and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this Report.
<table><tr><td></td><td colspan="5">Years Ended December 31, (In thousands, except per share data and apartment homes owned)</td></tr><tr><td></td><td>2007</td><td>2006</td><td>2005</td><td>2004</td><td>2003</td></tr><tr><td> Operating Data(a)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental income</td><td>$497,474</td><td>$463,719</td><td>$407,038</td><td>$306,691</td><td>$244,758</td></tr><tr><td>Loss before minority interests and discontinued operations</td><td>-100,596</td><td>-91,870</td><td>-63,499</td><td>-58,003</td><td>-59,187</td></tr><tr><td>Income from discontinued operations, net of minority interests</td><td>208,130</td><td>214,102</td><td>214,126</td><td>150,073</td><td>123,453</td></tr><tr><td>Net income</td><td>221,349</td><td>128,605</td><td>155,166</td><td>97,152</td><td>70,404</td></tr><tr><td>Distributions to preferred stockholders</td><td>13,911</td><td>15,370</td><td>15,370</td><td>19,531</td><td>26,326</td></tr><tr><td>Net income available to common stockholders</td><td>205,177</td><td>113,235</td><td>139,796</td><td>71,892</td><td>24,807</td></tr><tr><td>Common distributions declared</td><td>177,540</td><td>168,408</td><td>163,690</td><td>152,203</td><td>134,876</td></tr><tr><td>Weighted average number of common shares outstanding — basic</td><td>134,016</td><td>133,732</td><td>136,143</td><td>128,097</td><td>114,672</td></tr><tr><td>Weighted average number of common shares outstanding — diluted</td><td>134,016</td><td>133,732</td><td>136,143</td><td>128,097</td><td>114,672</td></tr><tr><td>Weighted average number of common shares, OP Units, and common stock equivalents outstanding — diluted</td><td>146,936</td><td>147,981</td><td>150,141</td><td>145,842</td><td>136,975</td></tr><tr><td>Per share — basic and diluted:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Loss from continuing operations available to common stockholders, net of minority interests</td><td>$-0.02</td><td>$-0.75</td><td>$-0.54</td><td>$-0.61</td><td>$-0.86</td></tr><tr><td>Income from discontinued operations, net of minority interests</td><td>1.55</td><td>1.60</td><td>1.57</td><td>1.17</td><td>1.08</td></tr><tr><td>Net income available to common stockholders</td><td>1.53</td><td>0.85</td><td>1.03</td><td>0.56</td><td>0.22</td></tr><tr><td>Common distributions declared</td><td>1.32</td><td>1.25</td><td>1.20</td><td>1.17</td><td>1.14</td></tr><tr><td> Balance Sheet Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Real estate owned, at cost</td><td>$5,952,541</td><td>$5,820,122</td><td>$5,512,424</td><td>$5,243,296</td><td>$4,351,551</td></tr><tr><td>Accumulated depreciation</td><td>1,371,759</td><td>1,253,727</td><td>1,123,829</td><td>1,007,887</td><td>896,630</td></tr><tr><td>Total real estate owned, net of accumulated depreciation</td><td>4,580,782</td><td>4,566,395</td><td>4,388,595</td><td>4,235,409</td><td>3,454,921</td></tr><tr><td>Total assets</td><td>4,801,121</td><td>4,675,875</td><td>4,541,593</td><td>4,332,001</td><td>3,543,643</td></tr><tr><td>Secured debt</td><td>1,137,936</td><td>1,182,919</td><td>1,116,259</td><td>1,197,924</td><td>1,018,028</td></tr><tr><td>Unsecured debt</td><td>2,364,740</td><td>2,155,866</td><td>2,043,518</td><td>1,682,058</td><td>1,114,009</td></tr><tr><td>Total debt</td><td>3,502,676</td><td>3,338,785</td><td>3,159,777</td><td>2,879,982</td><td>2,132,037</td></tr><tr><td>Stockholders’ equity</td><td>1,019,393</td><td>1,055,255</td><td>1,107,724</td><td>1,195,451</td><td>1,163,436</td></tr><tr><td>Number of common shares outstanding</td><td>133,318</td><td>135,029</td><td>134,012</td><td>136,430</td><td>127,295</td></tr><tr><td> Other Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> Cash Flow Data</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash provided by operating activities</td><td>$250,578</td><td>$229,613</td><td>$248,186</td><td>$251,747</td><td>$234,945</td></tr><tr><td>Cash used in investing activities</td><td>-71,397</td><td>-149,973</td><td>-219,017</td><td>-595,966</td><td>-304,217</td></tr><tr><td>Cash (used in)/provided by financing activities</td><td>-178,105</td><td>-93,040</td><td>-21,530</td><td>347,299</td><td>70,944</td></tr><tr><td> Funds from Operations(b)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Funds from operations — basic</td><td>$247,210</td><td>$244,471</td><td>$238,254</td><td>$211,670</td><td>$193,750</td></tr><tr><td>Funds from operations — diluted</td><td>250,936</td><td>248,197</td><td>241,980</td><td>219,557</td><td>208,431</td></tr><tr><td> Apartment Homes Owned</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total apartment homes owned at December 31</td><td>65,867</td><td>70,339</td><td>74,875</td><td>78,855</td><td>76,244</td></tr><tr><td>Weighted average number of apartment homes owned during the year</td><td>69,662</td><td>73,731</td><td>76,069</td><td>76,873</td><td>74,550</td></tr></table>
(a) Reclassified to conform to current year presentation in accordance with FASB Statement No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” as described in Note 3 to the consolidated financial statements. (b) Funds from operations, or FFO, is defined as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable property, premiums or original issuance costs associated with preferred stock redemptions, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s definition issued in April 2002. We consider FFO in evaluating property acquisitions and our operating performance and believe that FFO should be considered along with, but not as an alternative to, net income and cash flows as a measure of our activities in accordance with generally accepted accounting principles. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs. RE3 is our subsidiary that focuses on development, land entitlement and short-term hold investments. RE3 tax benefits and gain on sales, net of taxes, is defined as net sales proceeds less a tax provision and the gross investment basis of the asset before accumulated depreciation. We consider FFO with RE3 tax benefits and gain on sales, net of taxes, to be a meaningful supplemental measure of performance because the short-term use of funds produce a profit that differs from the traditional long-term investment in real estate for REITs. For 2005, FFO includes $2.5 million of hurricane related insurance recoveries. For 2004, FFO includes a charge of $5.5 million to cover hurricane related expenses. For the years ended December 31, 2007, 2004 and 2003, distributions to preferred stockholders exclude $2.6 million, $5.7 million and $19.3 million, respectively, related to premiums on preferred stock repurchases. $1,138 per home, and major renovations totaled $71.8 million or $1,045 per home for the year ended December 31, 2007. The following table outlines capital expenditures and repair and maintenance costs for all of our communities, excluding real estate under development, condominium conversions and commercial properties, for the periods presented:
<table><tr><td></td><td colspan="3">Year Ended December 31, (dollars in thousands)</td><td colspan="3">Year Ended December 31, (per home)</td></tr><tr><td></td><td> 2007</td><td> 2006</td><td>% Change</td><td> 2007</td><td> 2006</td><td>% Change</td></tr><tr><td>Turnover capital expenditures</td><td>$13,362</td><td>$14,214</td><td>-6.0%</td><td>$194</td><td>$197</td><td>-1.5%</td></tr><tr><td>Asset preservation expenditures</td><td>31,071</td><td>20,409</td><td>52.2%</td><td>452</td><td>283</td><td>59.7%</td></tr><tr><td>Total recurring capital expenditures</td><td>44,433</td><td>34,623</td><td>28.3%</td><td>646</td><td>480</td><td>34.6%</td></tr><tr><td>Revenue enhancing improvements</td><td>78,209</td><td>144,102</td><td>-45.7%</td><td>1,138</td><td>2,002</td><td>-43.2%</td></tr><tr><td>Major renovations</td><td>71,785</td><td>36,996</td><td>94.0%</td><td>1,045</td><td>514</td><td>103.3%</td></tr><tr><td>Total capital expenditures</td><td>$194,427</td><td>$215,721</td><td>-9.9%</td><td>$2,829</td><td>$2,996</td><td>-5.6%</td></tr><tr><td>Repair and maintenance expense</td><td>$42,518</td><td>$43,498</td><td>-2.3%</td><td>$619</td><td>$604</td><td>2.5%</td></tr></table>
Total capital expenditures for our communities decreased $21.3 million or $167 per home for the year ended December 31, 2007 compared to the same period in 2006. This decrease was attributable to a $65.9 million decrease in revenue enhancing improvements at certain of our properties that was offset by an additional $9.8 million being invested in recurring capital expenditures and an additional $34.8 million being invested in major renovations as compared to the same period in 2006. We will continue to selectively add revenue enhancing improvements which we believe will provide a return on investment substantially in excess of our cost of capital. Recurring capital expenditures during 2008 are currently expected to be approximately $650 per home. Impairment of Long-Lived Assets We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by the future operation and disposition of those assets are less than the net book value of those assets. Our cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and operating conditions and our estimated holding periods. The net book value of impaired assets is reduced to fair market value. Our estimates of fair market value represent our best estimate based upon industry trends and reference to market rates and transactions. Real Estate Investment Properties We purchase real estate investment properties from time to time and allocate the purchase price to various components, such as land, buildings, and intangibles related to in-place leases in accordance with FASB Statement No.141, “Business Combinations. ” The purchase price is allocated based on the relative fair value of each component. The fair value of buildings is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates. As such, the determination of fair value considers the present value of all cash flows expected to be generated from the property including an initial lease-up period. We determine the fair value of in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition. In addition, we consider the cost of acquiring similar leases, the foregone rents associated with the lease-up period, and the carrying costs associated with the lease-up period. The fair value of in-place leases is recorded and amortized as amortization expense over the remaining contractual lease period. |
22,716.28571 | How many loans exceed the average of total loans in 2011? | RECENT ACCOUNTING PRONOUNCEMENTS See Note 1 Accounting Policies in the Notes To Consolidated Financial Statements in Item 8 of this Report for additional information on the following recent accounting pronouncements that are relevant to our business, including a description of each new pronouncement, the required date of adoption, our planned date of adoption, and the expected impact on our consolidated financial statements. All of the following pronouncements were issued by the FASB unless otherwise noted. The following were issued in 2007: ? SFAS 141(R), “Business Combinations” ? SFAS 160, “Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No.51” ? In November 2007, the SEC issued Staff Accounting Bulletin No.109, ? In June 2007, the AICPA issued Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting Guide “Investment Companies” and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. ” The FASB issued a final FSP in February 2008 which indefinitely delays the effective date of AICPA SOP 07-1. ? FASB Staff Position No. (“FSP”) FIN 46(R) 7, “Application of FASB Interpretation No.46(R) to Investment Companies” ? FSP FIN 48-1, “Definition of Settlement in FASB Interpretation (“FIN”) No.48” ? SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No.115” The following were issued during 2006: ? SFAS 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Benefit Plans – an amendment of FASB Statements No.87, 88, 106 and 132(R)”(“SFAS 158”) ? SFAS 157, “Fair Value Measurements” ? FIN 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No.109” ? FSP FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction” ? SFAS 156, “Accounting for Servicing of Financial Assets – an amendment of FASB Statement No.140” ? SFAS 155, “Accounting for Certain Hybrid Financial Instruments – an amendment of FASB Statements No.133 and 140” ? The Emerging Issues Task Force (“EITF”) of the FASB issued EITF Issue 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” STATUS OF DEFINED BENEFIT PENSION PLAN We have a noncontributory, qualified defined benefit pension plan (“plan” or “pension plan”) covering eligible employees. Benefits are derived from a cash balance formula based on compensation levels, age and length of service. Pension contributions are based on an actuarially determined amount necessary to fund total benefits payable to plan participants. Consistent with our investment strategy, plan assets are currently approximately 60% invested in equity investments with most of the remainder invested in fixed income instruments. Plan fiduciaries determine and review the plan’s investment policy. We calculate the expense associated with the pension plan in accordance with SFAS 87, “Employers’ Accounting for Pensions,” and we use assumptions and methods that are compatible with the requirements of SFAS 87, including a policy of reflecting trust assets at their fair market value. On an annual basis, we review the actuarial assumptions related to the pension plan, including the discount rate, the rate of compensation increase and the expected return on plan assets. Neither the discount rate nor the compensation increase assumptions significantly affects pension expense. The expected long-term return on assets assumption does significantly affect pension expense. The expected long-term return on plan assets for determining net periodic pension cost for 2007 was 8.25%, unchanged from 2006. Under current accounting rules, the difference between expected long-term returns and actual returns is accumulated and amortized to pension expense over future periods. Each one percentage point difference in actual return compared with our expected return causes expense in subsequent years to change by up to $4 million as the impact is amortized into results of operations. The table below reflects the estimated effects on pension expense of certain changes in assumptions, using 2008 estimated expense as a baseline.
<table><tr><td>Change in Assumption</td><td>EstimatedIncrease to 2008PensionExpense(In millions)</td></tr><tr><td>.5% decrease in discount rate</td><td>$1</td></tr><tr><td>.5% decrease in expected long-term return on assets</td><td>$10</td></tr><tr><td>.5% increase in compensation rate</td><td>$2</td></tr></table>
We currently estimate a pretax pension benefit of $26 million in 2008 compared with a pretax benefit of $30 million in The following tables display the delinquency status of our loans and our nonperforming assets at December 31, 2011 and December 31, 2010. Age Analysis of Past Due Accruing Loans
<table><tr><td></td><td colspan="5">Accruing</td><td></td><td></td><td></td><td></td></tr><tr><td>In millions</td><td>Current or Less Than 30 Days Past Due</td><td>30-59 Days Past Due</td><td>60-89 Days Past Due</td><td>90 Days Or More Past Due</td><td>Total Past Due (a)</td><td>Nonperforming Loans</td><td>Purchased Impaired</td><td>Total Loans</td><td></td></tr><tr><td> December 31, 2011</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$64,437</td><td>$122</td><td>$47</td><td>$49</td><td>$218</td><td>$899</td><td>$140</td><td>$65,694</td><td> </td></tr><tr><td>Commercial real estate</td><td>14,010</td><td>96</td><td>35</td><td>6</td><td>137</td><td>1,345</td><td>712</td><td>16,204</td><td> </td></tr><tr><td>Equipment lease financing</td><td>6,367</td><td>22</td><td>5</td><td></td><td>27</td><td>22</td><td></td><td>6,416</td><td> </td></tr><tr><td>Home equity</td><td>29,288</td><td>173</td><td>114</td><td>221</td><td>508</td><td>529</td><td>2,764</td><td>33,089</td><td> </td></tr><tr><td>Residential real estate (b)</td><td>7,935</td><td>302</td><td>176</td><td>2,281</td><td>2,759</td><td>726</td><td>3,049</td><td>14,469</td><td> </td></tr><tr><td>Credit card</td><td>3,857</td><td>38</td><td>25</td><td>48</td><td>111</td><td>8</td><td></td><td>3,976</td><td> </td></tr><tr><td>Other consumer (c)</td><td>18,355</td><td>265</td><td>145</td><td>368</td><td>778</td><td>31</td><td>2</td><td>19,166</td><td> </td></tr><tr><td>Total</td><td>$144,249</td><td>$1,018</td><td>$547</td><td>$2,973</td><td>$4,538</td><td>$3,560</td><td>$6,667</td><td>$159,014</td><td> </td></tr><tr><td>Percentage of total loans</td><td>90.72%</td><td>.64%</td><td>.34%</td><td>1.87%</td><td>2.85%</td><td>2.24%</td><td>4.19%</td><td>100.00</td><td> %</td></tr><tr><td>December 31, 2010</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Commercial</td><td>$53,273</td><td>$251</td><td>$92</td><td>$59</td><td>$402</td><td>$1,253</td><td>$249</td><td>$55,177</td><td></td></tr><tr><td>Commercial real estate</td><td>14,713</td><td>128</td><td>62</td><td>43</td><td>233</td><td>1,835</td><td>1,153</td><td>17,934</td><td></td></tr><tr><td>Equipment lease financing</td><td>6,276</td><td>37</td><td>2</td><td>1</td><td>40</td><td>77</td><td></td><td>6,393</td><td></td></tr><tr><td>Home equity</td><td>30,334</td><td>159</td><td>91</td><td>174</td><td>424</td><td>448</td><td>3,020</td><td>34,226</td><td></td></tr><tr><td>Residential real estate (b)</td><td>9,150</td><td>331</td><td>225</td><td>2,121</td><td>2,677</td><td>818</td><td>3,354</td><td>15,999</td><td></td></tr><tr><td>Credit card</td><td>3,765</td><td>46</td><td>32</td><td>77</td><td>155</td><td></td><td></td><td>3,920</td><td></td></tr><tr><td>Other consumer (c)</td><td>16,312</td><td>260</td><td>101</td><td>234</td><td>595</td><td>35</td><td>4</td><td>16,946</td><td></td></tr><tr><td>Total</td><td>$133,823</td><td>$1,212</td><td>$605</td><td>$2,709</td><td>$4,526</td><td>$4,466</td><td>$7,780</td><td>$150,595</td><td></td></tr><tr><td>Percentage of total loans</td><td>88.86%</td><td>.81%</td><td>.40%</td><td>1.80%</td><td>3.01%</td><td>2.97%</td><td>5.16%</td><td>100.00%</td><td></td></tr></table>
(a) Past due loan amounts exclude purchased impaired loans as they are considered current loans due to the accretion of interest income. (b) Past due loan amounts at December 31, 2011, include government insured or guaranteed residential real estate mortgages, totaling $.1 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $2.1 billion for 90 days or more past due. Past due loan amounts at December 31, 2010, include government insured or guaranteed residential real estate mortgages, totaling $.1 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $2.0 billion for 90 days or more past due. (c) Past due loan amounts at December 31, 2011, include government insured or guaranteed other consumer loans, totaling $.2 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $.3 billion for 90 days or more past due. Past due loan amounts at December 31, 2010, include government insured or guaranteed other consumer loans, totaling $.2 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $.2 billion for 90 days or more past due. RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES Management's Discussion and Analysis 57 Certain statistical disclosures by bank holding companies As a financial holding company, we are required to provide certain statistical disclosures by bank holding companies pursuant to the SEC’s Industry Guide 3. The following table provides certain of those disclosures for the periods indicated below. The disclosures for years ended September 30, 2016 and 2015 have been revised from those previously reported to conform to our current presentation which includes the impact of the deconsolidation of certain VIEs (see Note 2 of the Notes to Consolidated Financial Statements in this Form 10-K for additional information regarding the deconsolidation).
<table><tr><td></td><td colspan="3">Year ended September 30,</td></tr><tr><td></td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>RJF return on average assets</td><td>1.9%</td><td>1.9%</td><td>2.0%</td></tr><tr><td>RJF return on average equity</td><td>12.2%</td><td>11.3%</td><td>11.5%</td></tr><tr><td>Average equity to average assets</td><td>15.9%</td><td>16.6%</td><td>17.7%</td></tr><tr><td>Dividend payout ratio</td><td>20.3%</td><td>21.9%</td><td>21.0%</td></tr></table>
RJF return on average assets is computed as net income attributable to RJF for the year indicated, divided by average assets for each respective fiscal year. Average assets is computed by adding the total assets as of each quarter-end date during the indicated fiscal year, plus the beginning of the year total, divided by five. RJF return on average equity is computed by utilizing the net income attributable to RJF for the year indicated, divided by the average equity attributable to RJF for each respective fiscal year. Average equity is computed by adding the total equity attributable to RJF as of each quarter-end date during the indicated fiscal year, plus the beginning of the year total, divided by five. Average equity to average assets is computed as average equity divided by average assets as calculated in the above explanations. Dividend payout ratio is computed as dividends declared per common share during the fiscal year as a percentage of diluted earnings per common share. Refer to the RJ Bank and Risk Management sections of this MD&A and the Notes to Consolidated Financial Statements in this Form 10-K for the other required disclosures. Liquidity and Capital Resources Liquidity is essential to our business. The primary goal of our liquidity management activities is to ensure adequate funding to conduct our business over a range of market environments. Senior management establishes our liquidity and capital management framework. This framework includes senior management’s review of short- and long-term cash flow forecasts, review of monthly capital expenditures, monitoring of the availability of alternative sources of financing, and daily monitoring of liquidity in our significant subsidiaries. Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk and impact on future liquidity needs. Our treasury department assists in evaluating, monitoring and controlling the impact that our business activities have on our financial condition, liquidity and capital structure and maintains our relationships with various lenders. The objective of this framework is to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity. Liquidity is provided primarily through our business operations and financing activities. Financing activities could include bank borrowings, repurchase agreement transactions or additional capital raising activities under our universal shelf registration statement. Cash provided by operating activities during the year ended September 30, 2017 was $1.31 billion. In addition to operating cash flows related to net income, other increases in cash from operations included: ? A $1.43 billion decrease in assets segregated pursuant to regulations and other segregated assets, primarily resulting from the decrease in client cash balances in part due to a significant number of client accounts from the September 2016 Alex. Brown acquisition electing into our RJBDP program during the current fiscal year. ? $189 million of proceeds from sales of securitizations and loans held for sale, net of purchases and originations of loans and securitizations. ? Accrued compensation, commissions and benefits increased $160 million as a result of the increased financial results we achieved in fiscal year 2017. |
2,006 | As As the chart 2 shows,the Weighted average exercise price for Balance on December 31 in which year ranks first? | Japanese Yen (approximately $63 million and $188 million, respectively, based on applicable exchange rates at that time). The cash paid of approximately $63 million during the quarter ended March 31, 2010 as a result of the purchase of Sumitomo 3M shares from SEI is classified as “Other financing activities” in the consolidated statement of cash flows. The remainder of the purchase financed by the note payable to SEI is considered non-cash financing activity in the first quarter of 2010. As discussed in Note 2, during the second quarter of 2010, 3M recorded a financed liability of 1.7 billion Japanese yen (approximately $18 million based on applicable exchange rates at that time) related to the A-One acquisition, which is also considered a non-cash financing activity. Off-Balance Sheet Arrangements and Contractual Obligations: As of December 31, 2012, the Company has not utilized special purpose entities to facilitate off-balance sheet financing arrangements. Refer to the section entitled “Warranties/Guarantees” in Note 13 for discussion of accrued product warranty liabilities and guarantees. In addition to guarantees, 3M, in the normal course of business, periodically enters into agreements that require the Company to indemnify either major customers or suppliers for specific risks, such as claims for injury or property damage arising out of the use of 3M products or the negligence of 3M personnel, or claims alleging that 3M products infringe thirdparty patents or other intellectual property. While 3M’s maximum exposure under these indemnification provisions cannot be estimated, these indemnifications are not expected to have a material impact on the Company’s consolidated results of operations or financial condition. A summary of the Company’s significant contractual obligations as of December 31, 2012, follows: Contractual Obligations
<table><tr><td></td><td></td><td>Payments due by year</td></tr><tr><td>(Millions)</td><td>Total</td><td>2013</td><td>2014</td><td>2015</td><td>2016</td><td>2017</td><td>After 2017</td></tr><tr><td>Long-term debt, including current portion (Note 9)</td><td>$5,902</td><td>$986</td><td>$1,481</td><td>$107</td><td>$994</td><td>$648</td><td>$1,686</td></tr><tr><td>Interest on long-term debt</td><td>1,721</td><td>189</td><td>152</td><td>97</td><td>96</td><td>79</td><td>1,108</td></tr><tr><td>Operating leases (Note 13)</td><td>735</td><td>194</td><td>158</td><td>119</td><td>77</td><td>68</td><td>119</td></tr><tr><td>Capital leases (Note 13)</td><td>96</td><td>22</td><td>21</td><td>8</td><td>7</td><td>4</td><td>34</td></tr><tr><td>Unconditional purchase obligations and other</td><td>1,489</td><td>1,060</td><td>209</td><td>111</td><td>48</td><td>33</td><td>28</td></tr><tr><td>Total contractual cash obligations</td><td>$9,943</td><td>$2,451</td><td>$2,021</td><td>$442</td><td>$1,222</td><td>$832</td><td>$2,975</td></tr></table>
Long-term debt payments due in 2013 and 2014 include floating rate notes totaling $132 million (classified as current portion of long-term debt) and $97 million, respectively, as a result of put provisions associated with these debt instruments. Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company. Included in the unconditional purchase obligations category above are certain obligations related to take or pay contracts, capital commitments, service agreements and utilities. These estimates include both unconditional purchase obligations with terms in excess of one year and normal ongoing purchase obligations with terms of less than one year. Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. Contractual capital commitments are included in the preceding table, but these commitments represent a small part of the Company’s expected capital spending in 2013 and beyond. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide a reliable indicator of the Company’s expected future cash outflows on a stand-alone basis. Other obligations, included in the preceding table within the caption entitled “Unconditional purchase obligations and other,” include the current portion of the liability for uncertain tax positions under ASC 740, which is expected to be paid out in cash in the next 12 months. The Company is not able to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time; therefore, the long-term portion of the net tax liability of $170 million is excluded from the preceding table. Refer to Note 7 for further details. Compensation expense was determined from the estimates of fair values of stock options granted using the Black-Scholes option-pricing model. The following summarizes the weighted average of fair value and the significant assumptions used in applying the Black-Scholes model for options granted:
<table><tr><td></td><td> 2006 </td><td> 2005 </td><td> 2004 </td></tr><tr><td>Weighted average of fair value for options granted</td><td>$15.02</td><td>15.33</td><td>11.85</td></tr><tr><td>Weighted average assumptions used:</td><td></td><td></td><td></td></tr><tr><td>Expected dividend yield</td><td>2.0%</td><td>2.0%</td><td>2.0%</td></tr><tr><td>Expected volatility</td><td>18.0%</td><td>25.0%</td><td>26.8%</td></tr><tr><td>Risk-free interest rate</td><td>4.95%</td><td>3.95%</td><td>3.11%</td></tr><tr><td>Expected life (in years)</td><td>4.1</td><td>4.1</td><td>3.8</td></tr></table>
The methodology used to estimate the fair values of stock options is consistent with the estimates used for the pro forma presentation in years prior to the adoption of SFAS 123R. The assumptions for expected dividend yield, expected volatility and expected life reflect management’s judgment and include consideration of historical experience. Expected volatility is based on historical volatility. The risk-free interest rate is based on the U. S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The following summarizes our stock option activity for the three years ended December 31, 2006:
<table><tr><td></td><td> Number of shares </td><td> Weighted average exercise price </td></tr><tr><td>Balance at December 31, 2003</td><td>7,570,645</td><td>$49.51</td></tr><tr><td>Granted</td><td>2,279,621</td><td>57.28</td></tr><tr><td>Exercised</td><td>-1,812,594</td><td>48.32</td></tr><tr><td>Expired</td><td>-170,662</td><td>52.54</td></tr><tr><td>Forfeited</td><td>-233,235</td><td>51.59</td></tr><tr><td>Balance at December 31, 2004</td><td>7,633,775</td><td>51.98</td></tr><tr><td>Granted</td><td>912,905</td><td>71.37</td></tr><tr><td>Assumed in acquisition</td><td>1,559,693</td><td>47.44</td></tr><tr><td>Exercised</td><td>-1,872,753</td><td>50.00</td></tr><tr><td>Expired</td><td>-519,521</td><td>66.53</td></tr><tr><td>Forfeited</td><td>-216,533</td><td>55.46</td></tr><tr><td>Balance at December 31, 2005</td><td>7,497,566</td><td>52.79</td></tr><tr><td>Granted</td><td>979,274</td><td>81.14</td></tr><tr><td>Exercised</td><td>-1,631,012</td><td>49.43</td></tr><tr><td>Expired</td><td>-52,398</td><td>50.00</td></tr><tr><td>Forfeited</td><td>-106,641</td><td>62.89</td></tr><tr><td>Balance at December 31, 2006</td><td>6,686,789</td><td>57.62</td></tr><tr><td>Outstanding options exercisable as of:</td><td></td><td></td></tr><tr><td>December 31, 2006</td><td>4,409,971</td><td>$50.73</td></tr><tr><td>December 31, 2005</td><td>4,663,707</td><td>49.04</td></tr><tr><td>December 31, 2004</td><td>3,711,405</td><td>51.02</td></tr></table>
We issue new authorized shares for the exercise of stock options. During 2006, the total intrinsic value of options exercised was approximately $50.8 million. Additional selected information on stock options at December 31, 2006 follows:
<table><tr><td></td><td colspan="3"> Outstanding options </td><td colspan="2"> Exercisable options </td></tr><tr><td> Exercise price range</td><td> Number of shares </td><td> Weighted average exercise price </td><td> Weighted average remaining contractual life (years) </td><td> Number of shares </td><td> Weighted average exercise price </td></tr><tr><td>$ 0.32 to $ 19.99</td><td>76,164</td><td>$11.63</td><td>0.9-1</td><td>76,164</td><td>$11.63</td></tr><tr><td>$ 20.00 to $ 39.99</td><td>190,986</td><td>27.44</td><td>2.2</td><td>190,986</td><td>27.44</td></tr><tr><td>$ 40.00 to $ 44.99</td><td>1,290,243</td><td>42.23</td><td>2.6</td><td>1,290,243</td><td>42.23</td></tr><tr><td>$ 45.00 to $ 49.99</td><td>356,590</td><td>48.30</td><td>4.6</td><td>356,590</td><td>48.30</td></tr><tr><td>$ 50.00 to $ 54.99</td><td>1,011,382</td><td>53.72</td><td>2.4</td><td>1,006,735</td><td>53.71</td></tr><tr><td>$ 55.00 to $ 59.99</td><td>1,550,516</td><td>56.92</td><td>4.5</td><td>917,585</td><td>57.03</td></tr><tr><td>$ 60.00 to $ 64.99</td><td>172,390</td><td>61.51</td><td>2.7</td><td>102,522</td><td>61.72</td></tr><tr><td>$ 65.00 to $ 69.99</td><td>198,253</td><td>67.30</td><td>6.4</td><td>146,699</td><td>67.42</td></tr><tr><td>$ 70.00 to $ 74.99</td><td>759,814</td><td>70.86</td><td>5.5</td><td>255,919</td><td>70.91</td></tr><tr><td>$ 75.00 to $ 79.99</td><td>116,126</td><td>75.92</td><td>6.0</td><td>57,528</td><td>75.84</td></tr><tr><td>$ 80.00 to $ 82.92</td><td>964,325</td><td>81.14</td><td>6.4</td><td>9,000</td><td>80.65</td></tr><tr><td></td><td>6,686,789</td><td>57.62</td><td>4.2-1</td><td>4,409,971</td><td>50.73</td></tr></table>
1 The weighted average remaining contractual life excludes 35,023 stock options that do not have a fixed expiration date. They expire between the date of termination and one year from the date of termination, depending upon certain circumstances. For outstanding options at December 31, 2006, the aggregate intrinsic value was $166.0 million. For exercisable options at December 31, 2006, the aggregate intrinsic value was $139.9 million and the weighted average remaining contractual life was 3.4 years, excluding the stock options previously noted without a fixed expiration date. The previous tables do not include options for employees to purchase common stock of our subsidiaries, TCBO and NetDeposit. At December 31, 2006 for TCBO, there were options to purchase 87,000 shares at an exercise price of $20.00. At December 31, 2006, there were 1,038,000 issued and outstanding shares of TCBO common stock. For NetDeposit, there were options to purchase 11,739,920 shares at exercise prices from $0.42 to $1.00. At December 31, 2006, there were 100,536,568 issued and outstanding shares of NetDeposit common stock. TCBO and NetDeposit options are included in the previous pro forma disclosure. Net income increased 6.0% to $172.6 million in 2006 compared with $162.9 million for 2005, and $145.8 million for 2004. Loan growth, interest rate risk management, credit management, customer profitability management and expense control were the primary contributors to the positive results of operations for 2006 while the loss of deposits and higher cost of funding negatively impacted earnings. Net interest income for 2006 increased $18.0 million or 4.0% to $469.4 million compared to $451.4 million for 2005 and $410.2 million for 2004. CB&T’s net interest margin was 4.81%, 4.91% and 4.78% for 2006, 2005 and 2004, respectively. The bank strives to maintain a slightly asset-sensitive position with regard to interest rate risk management, meaning that when market interest rates rise, the net interest margin increases. Net interest income in 2006 increased although the margin narrowed due to the flattening yield curve and the competitive pressures of increases in interest rates on deposits and increased reliance on higher cost nondeposit funding. The efficiency ratio has improved in each of the past three years: 44.4% for 2006, 46.3% for 2005, and 47.9% for 2004. CB&T continues to focus on managing operating efficiencies and costs in relation to revenue. Total revenue was $550.1 million, an increase of 4.5% over $526.4 million in 2005. Noninterest expense grew to $244.6 million, an increase of 0.3% over $243.9 million in 2005. This modest expense growth was primarily due to strong controls over staffing levels and other variable expenses. Full-time equivalent employees declined to 1,659 in December 2006 from 1,673 in December 2005. Schedule 15 CALIFORNIA BANK & TRUST
<table><tr><td></td><td> 2006 </td><td> 2005 </td><td> 2004 </td></tr><tr><td> PERFORMANCE RATIOS</td><td></td><td></td><td></td></tr><tr><td>Return on average assets</td><td>1.59%</td><td>1.59%</td><td>1.51%</td></tr><tr><td>Return on average common equity</td><td>15.40%</td><td>15.53%</td><td>14.52%</td></tr><tr><td>Efficiency ratio</td><td>44.42%</td><td>46.29%</td><td>47.93%</td></tr><tr><td>Net interest margin</td><td>4.81%</td><td>4.91%</td><td>4.78%</td></tr><tr><td> OTHER INFORMATION</td><td></td><td></td><td></td></tr><tr><td>Full-time equivalent employees</td><td>1,659</td><td>1,673</td><td>1,722</td></tr><tr><td>Domestic offices:</td><td></td><td></td><td></td></tr><tr><td>Traditional branches</td><td>91</td><td>91</td><td>91</td></tr><tr><td>ATMs</td><td>103</td><td>105</td><td>107</td></tr></table>
Net loans and leases grew $421 million or 5.5% in 2006 compared to 2005. Commercial, small business, real estate construction, and commercial real estate loans grew modestly in 2006 compared to 2005, while consumer loans declined and residential real estate loans remained flat. CB&T does not expect overall loan growth in 2007 to be much different than 2006 given the tenuous business climate particularly in its primary Southern California commercial and residential real estate construction and development markets. Total deposits declined $486 million or 5.5% in 2006 compared to 2005. The ratio of noninterest-bearing deposits to total deposits was 33.6% and 33.2% for 2006 and 2005, respectively. Reflecting general banking conditions in California, CB&T was challenged in its deposit growth in 2006 and expects to continue to be challenged in 2007. Nonperforming assets were $27.1 million at December 31, 2006 compared to $20.0 million one year ago. Nonperforming assets to net loans and other real estate owned at December 31, 2006 was 0.34% compared to 0.26% at December 31, 2005. Net loan and lease charge-offs were $10.9 million for 2006 compared with $4.9 million for 2005. CB&T’s loan loss provision was $15.0 million for 2006 compared to $9.9 million for 2005. The ratio of the allowance for loan losses to nonperforming loans was 360.3% at year-end 2006 compared to 512.1% at year-end 2005. The ratio of the allowance for loan losses to net loans and leases was 1.17% and 1.18% at December 31, 2006 and 2005, respectively. Amegy Corporation Amegy is headquartered in Houston, Texas and operates Amegy Bank, the tenth largest full-service commercial bank in Texas measured by deposits in the state. Amegy operates 64 full-service traditional branches and 8 banking centers in grocery stores in the Houston metropolitan area, and five traditional branches and one loan production office in the Dallas metropolitan area. During the first quarter of 2007, Amegy continued its expansion into the attractive markets in Texas by opening its first location in San Antonio, a loan production office to serve the Central Texas market. Amegy also operates a broker-dealer (Amegy Investments, Inc), a trust and private bank group, and a mortgage bank (Amegy Mortgage Company). The Texas economy is the eleventh largest in the world with two-thirds of all state economic activity occurring in We monitor this risk through the use of two complementary measurement methods: duration of equity and income simulation. In the duration of equity method, we measure the expected changes in the market values of equity in response to changes in interest rates. In the income simulation method, we analyze the expected changes in income in response to changes in interest rates. Duration of equity is derived by first calculating the dollar duration of all assets, liabilities and derivative instruments. Dollar duration is determined by calculating the market value of each instrument assuming interest rates sustain immediate and parallel movements up 1% and down 1%. The average of these two changes in market value is the dollar duration. Subtracting the dollar duration of liabilities from the dollar duration of assets and adding the net dollar duration of derivative instruments results in the dollar duration of equity. Duration of equity is computed by dividing the dollar duration of equity by the market value of equity. Income simulation is an estimate of the net interest income that would be recognized under different rate environments. Net interest income is measured under several parallel and nonparallel interest rate environments and deposit repricing assumptions, taking into account an estimate of the possible exercise of options within the portfolio. Both of these measurement methods require that we assess a number of variables and make various assumptions in managing the Company’s exposure to changes in interest rates. The assessments address loan and security prepayments, early deposit withdrawals, and other embedded options and noncontrollable events. As a result of uncertainty about the maturity and repricing characteristics of both deposits and loans, the Company estimates ranges of duration and income simulation under a variety of assumptions and scenarios. The Company’s interest rate risk position changes as the interest rate environment changes and is managed actively to try to maintain a consistent slightly asset-sensitive position. However, positions at the end of any period may not be reflective of the Company’s position in any subsequent period. We should note that duration of equity is highly sensitive to the assumptions used for deposits that do not have specific maturities, such as checking, savings, and money market accounts and also to prepayment assumptions used for loans with prepayment options. Given the uncertainty of these durations, we view the duration of equity as falling within a range of possibilities. For income simulation, Company policy requires that interest sensitive income from a static balance sheet is expected to decline by no more than 10% during one year if rates were to immediately rise or fall in parallel by 200 basis points. As of the dates indicated, Schedule 41 shows the Company’s estimated range of duration of equity, duration of equity simulation, and percentage change in interest sensitive income in the first year after the rate change if interest rates were to sustain an immediate parallel change of 200 basis points; the “low” and “high” results differ based on the assumed speed of repricing of administered-rate deposits (money market, interest-on-checking, and savings): Schedule 41 DURATION OF EQUITY AND INTEREST SENSITIVE INCOME |
2,015 | When does Projected benefit obligation at beginning of year f Con Edison reach the largest value? | (a) Relates to an increase in CECONY’s pension obligation of $45 million from a 1999 special retirement program. Funded Status The funded status at December 31, 2015, 2014 and 2013 was as follows:
<table><tr><td></td><td colspan="3">Con Edison</td><td colspan="3">CECONY</td></tr><tr><td>(Millions of Dollars)</td><td>2015</td><td>2014</td><td>2013</td><td>2015</td><td>2014</td><td>2013</td></tr><tr><td>CHANGE IN PROJECTED BENEFIT OBLIGATION</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Projected benefit obligation at beginning of year</td><td>$15,081</td><td>$12,197</td><td>$13,406</td><td>$14,137</td><td>$11,429</td><td>$12,572</td></tr><tr><td>Service cost – excluding administrative expenses</td><td>293</td><td>221</td><td>259</td><td>274</td><td>206</td><td>241</td></tr><tr><td>Interest cost on projected benefit obligation</td><td>575</td><td>572</td><td>537</td><td>538</td><td>536</td><td>503</td></tr><tr><td>Net actuarial (gain)/loss</td><td>-996</td><td>2,641</td><td>-1,469</td><td>-931</td><td>2,484</td><td>-1,388</td></tr><tr><td>Plan amendments</td><td>—</td><td>6</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Benefits paid</td><td>-576</td><td>-556</td><td>-536</td><td>-536</td><td>-518</td><td>-499</td></tr><tr><td>PROJECTED BENEFIT OBLIGATION AT END OF YEAR</td><td>$14,377</td><td>$15,081</td><td>$12,197</td><td>$13,482</td><td>$14,137</td><td>$11,429</td></tr><tr><td>CHANGE IN PLAN ASSETS</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$11,495</td><td>$10,755</td><td>$9,135</td><td>$10,897</td><td>$10,197</td><td>$8,668</td></tr><tr><td>Actual return on plan assets</td><td>126</td><td>752</td><td>1,310</td><td>118</td><td>715</td><td>1,241</td></tr><tr><td>Employer contributions</td><td>750</td><td>578</td><td>879</td><td>697</td><td>535</td><td>819</td></tr><tr><td>Benefits paid</td><td>-576</td><td>-556</td><td>-536</td><td>-536</td><td>-518</td><td>-499</td></tr><tr><td>Administrative expenses</td><td>-36</td><td>-34</td><td>-33</td><td>-35</td><td>-32</td><td>-32</td></tr><tr><td>FAIR VALUE OF PLAN ASSETS AT END OF YEAR</td><td>$11,759</td><td>$11,495</td><td>$10,755</td><td>$11,141</td><td>$10,897</td><td>$10,197</td></tr><tr><td>FUNDED STATUS</td><td>$-2,618</td><td>$-3,586</td><td>$-1,442</td><td>$-2,341</td><td>$-3,240</td><td>$-1,232</td></tr><tr><td>Unrecognized net loss</td><td>$3,909</td><td>$4,888</td><td>$2,759</td><td>$3,704</td><td>$4,616</td><td>$2,617</td></tr><tr><td>Unrecognized prior service costs</td><td>16</td><td>20</td><td>17</td><td>3</td><td>4</td><td>6</td></tr><tr><td>Accumulated benefit obligation</td><td>12,909</td><td>13,454</td><td>11,004</td><td>12,055</td><td>12,553</td><td>10,268</td></tr></table>
The decrease in the pension plan’s projected benefit obligation (due primarily to increased discount rates) was the primary cause of the decreased pension liability at Con Edison and CECONY of $968 million and $899 million, respectively, compared with December 31, 2014. For Con Edison, this decrease in pension liability corresponds with a decrease to regulatory assets of $967 million for unrecognized net losses and unrecognized prior service costs associated with the Utilities consistent with the accounting rules for regulated operations, a credit to OCI of $10 million (net of taxes) for the unrecognized net losses, and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs associated with the competitive energy businesses and O&R’s New Jersey and Pennsylvania utility subsidiaries. For CECONY, the decrease in pension liability corresponds with a decrease to regulatory assets of $911 million for unrecognized net losses and unrecognized prior service costs consistent with the accounting rules for regulated operations, a credit to OCI of $1 million (net of taxes) for unrecognized net losses, and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs associated with the competitive energy businesses. A portion of the unrecognized net loss and prior service cost for the pension plan, equal to $603 million and $4 million, respectively, will be recognized from accumulated OCI and the regulatory asset into net periodic benefit cost over the next year for Con Edison. Included in these amounts are $570 million and $2 million, respectively, for CECONY. At December 31, 2015 and 2014, Con Edison’s investments include $243 million and $225 million, respectively, held in external trust accounts for benefit payments pursuant to the supplemental retirement plans. Included in these amounts for CECONY were $221 million and $208 million, respectively. See Note P. The accumulated benefit obligations for the supplemental retirement plans for Con Edison and CECONY were $285 million and $249 million as of December 31, 2015 and $289 million and $250 million as of December 31, 2014, respectively Contract options in our defense businesses represent agreements to perform additional work beyond the products and services associated with firm contracts, if the customer exercises the option. These options are negotiated in conjunction with a firm contract and provide the terms under which the customer may elect to procure additional units or services at a future date. Contract options in the Aerospace group represent options to purchase new aircraft and long-term agreements with fleet customers. We recognize options in backlog when the customer exercises the option and establishes a firm order. On December 31, 2009, the estimated potential value associated with these IDIQ contracts and contract options was approximately $17.6 billion, up from $16.8 billion at the end of 2008. This represents our estimate of the potential value we will receive. The actual amount of funding received in the future may be higher or lower. We expect to realize this value over the next 10 to 15 years. REVIEW OF OPERATING SEGMENTS AEROSPACE Review of 2009 vs. 2008
<table><tr><td> Year Ended December 31</td><td>2009</td><td>2008</td><td colspan="2">Variance</td></tr><tr><td>Revenues</td><td>$5,171</td><td>$5,512</td><td>$-341</td><td>-6.2%</td></tr><tr><td>Operating earnings</td><td>707</td><td>1,021</td><td>-314</td><td>-30.8%</td></tr><tr><td>Operating margin</td><td>13.7%</td><td>18.5%</td><td></td><td></td></tr><tr><td>Gulfstream aircraft deliveries (in units):</td><td></td><td></td><td></td><td></td></tr><tr><td>Green</td><td>94</td><td>156</td><td>-62</td><td>-39.7%</td></tr><tr><td>Completion</td><td>110</td><td>152</td><td>-42</td><td>-27.6%</td></tr></table>
The Aerospace group’s revenues decreased in 2009, the net result of a 24 percent decline in Gulfstream revenues that was offset in part by revenues from Jet Aviation, which we acquired in the fourth quarter of 2008. The combination of the global economic deterioration and credit crisis along with negative business-jet rhetoric had a significant impact on the business-jet market in 2009. To adjust to the economic conditions and weakened demand, we reduced Gulfstream’s 2009 aircraft production and delivery schedule, primarily in the group’s midsize models, to bridge the market downturn. This included a five-week furlough at the group’s production center in Savannah, Georgia, in July and August. As a result, aircraft-manufacturing revenues decreased 28 percent in 2009 compared with 2008. The economic environment also impacted the group’s aircraft services business. Organic aircraftservices revenues were down 15 percent in 2009 resulting from reduced flying hours and customer deferral of aircraft maintenance. The decline in aircraft manufacturing and services revenues was slightly offset by higher pre-owned aircraft revenues in 2009. The group sold six pre-owned aircraft for $124 in 2009 compared with two sales for $18 in 2008. The group’s operating earnings declined in 2009 compared with 2008 due primarily to the factors noted above. The components of the reduction in earnings were as follows:
<table><tr><td>Aircraft manufacturing and completions</td><td>$-220</td></tr><tr><td>Pre-owned aircraft</td><td>-18</td></tr><tr><td>Aircraft services</td><td>1</td></tr><tr><td>Other</td><td>-77</td></tr><tr><td>Total decrease in operating earnings</td><td>$-314</td></tr></table>
The net decrease in the group’s aircraft manufacturing and completions earnings in 2009 resulted from the reduction in Gulfstream aircraft deliveries offset in part by the addition of Jet Aviation’s aircraft completions and refurbishing business. The earnings decline associated with the decreased Gulfstream volume was mitigated by cost-reduction initiatives, a shift in the mix of aircraft deliveries toward large-cabin aircraft, and liquidated damages collected on defaulted aircraft contracts. As a result, aircraft manufacturing margins increased in 2009 over 2008 despite the decline in volume during the year. The group continues to focus on reducing costs through production improvements and operational efficiencies to maintain aircraft-manufacturing margins. In late 2008 and early 2009, the supply in the global pre-owned aircraft market increased significantly, putting considerable pressure on pricing. As a result, the group wrote down the carrying value of its preowned aircraft inventory in 2009. Pricing in the pre-owned market appears to have stabilized in the second half of 2009, particularly for large-cabin aircraft. The group continues to work to minimize its preowned aircraft exposure, with four pre-owned aircraft valued at $60 remaining in inventory at the end of 2009. Aircraft services earnings were steady in 2009 compared with 2008 as the addition of Jet Aviation’s maintenance and repair activities, fixedbase operations and aircraft management services offset a decrease in organic aircraft services earnings. A significant reduction in flight hours in the business-jet market put competitive pressure on aircraft maintenance and repair earnings in 2009. The group’s operating earnings also were impacted negatively in 2009 by severance costs associated with workforce reduction activities and intangible asset amortization related to the Jet Aviation acquisition. The factors discussed above and the addition of lower-margin Jet Aviation business caused the group’s overall operating margins to decrease 480 basis points in 2009 compared with 2008. Overview Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L. P. , a Delaware limited partnership (the “Operating Partnership”). Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders is dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of, and owned approximately 93.5% of the common limited partnership interest in the Operating Partnership at December 31, 2011. All references to “we,” “us,” “our,” the “Company” and “Vornado” refer to Vornado Realty Trust and its consolidated subsidiaries, including the Operating Partnership. We own and operate office, retail and showroom properties (our “core” operations) with large concentrations of office and retail properties in the New York City metropolitan area and in the Washington, DC / Northern Virginia area. In addition, we have a 32.7% interest in Toys “R” Us, Inc. (“Toys”) which has a significant real estate component, a 32.4% interest in Alexander’s, Inc. (NYSE: ALX) (“Alexander’s”), which has seven properties in the greater New York metropolitan area, as well as interests in other real estate and related investments. Our business objective is to maximize shareholder value, which we measure by the total return provided to our shareholders. Below is a table comparing our performance to the Morgan Stanley REIT Index (“RMS”) and the SNL REIT Index (“SNL”) for the following periods ended December 31, 2011:
<table><tr><td> </td><td colspan="3"> Total Return<sup>-1</sup></td></tr><tr><td> </td><td> Vornado</td><td> RMS</td><td> SNL<sup></sup></td></tr><tr><td>One-year</td><td>-4.6%</td><td>8.7%</td><td>8.3%<sup></sup></td></tr><tr><td>Three-year</td><td>40.2%</td><td>79.6%</td><td>79.9%<sup></sup></td></tr><tr><td>Five-year</td><td>-25.2%</td><td>-7.3%</td><td>-3.9%<sup></sup></td></tr><tr><td>Ten-year</td><td>187.0%</td><td>163.2%</td><td>175.4%<sup></sup></td></tr><tr><td></td><td></td><td></td><td><sup></sup></td></tr><tr><td colspan="2"></td><td></td><td><sup></sup></td></tr></table>
We intend to achieve our business objective by continuing to pursue our investment philosophy and executing our operating strategies through: ? Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit; ? Investing in properties in select markets, such as New York City and Washington, DC, where we believe there is a high likelihood of capital appreciation; ? Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents; ? Investing in retail properties in select under-stored locations such as the New York City metropolitan area; ? Developing and redeveloping existing properties to increase returns and maximize value; and ? Investing in operating companies that have a significant real estate component. We expect to finance our growth, acquisitions and investments using internally generated funds, proceeds from possible asset sales and by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership units in exchange for property and may repurchase or otherwise reacquire these securities in the future. We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments than we are. Principal factors of competition include rents charged, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends. See “Risk Factors” in Item 1A for additional information regarding these factors. Costs under the Transformational Cost Management Program, which were primarily recorded in selling, general and administrative expenses and included in the fiscal year ended August 31, 2019 were as follows (in millions): |
103.7 | from 2014 to 2016 , what was the total amount of money they can deduct from their future income tax due to amortization? | APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 102 Employee Stock Purchase Plans Under the ESPP, substantially all employees may purchase Applied common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of Applied common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Based on the Black-Scholes option pricing model, the weighted average estimated fair value of purchase rights under the ESPP was $3.08 per share for the year ended October 27, 2013, $2.73 per share for the year ended October 28, 2012 and $3.03 per share for the year ended October 30, 2011. The number of shares issued under the ESPP during fiscal 2013, 2012 and 2011 was 7 million, 7 million and 6 million, respectively. At October 27, 2013, there were 40 million available for future issuance under the ESPP. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model for fiscal 2013, 2012 and 2011 are outlined in the following table:
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>ESPP:</td><td></td><td></td><td></td></tr><tr><td>Dividend yield</td><td>2.80%</td><td>3.01%</td><td>2.53%</td></tr><tr><td>Expected volatility</td><td>24.8%</td><td>29.6%</td><td>31.1%</td></tr><tr><td>Risk-free interest rate</td><td>0.09%</td><td>0.13%</td><td>0.09%</td></tr><tr><td>Expected life (in years)</td><td>0.5</td><td>0.5</td><td>0.5</td></tr></table>
Note 13 Employee Benefit Plans Employee Bonus Plans Applied has various employee bonus plans. A discretionary bonus plan provides for the distribution of a percentage of pretax income to Applied employees who are not participants in other performance-based incentive plans, up to a maximum percentage of eligible compensation. Other plans provide for bonuses to Applied’s executives and other key contributors based on the achievement of profitability and/or other specified performance criteria. Charges under these plans were $269 million for fiscal 2013, $271 million for fiscal 2012, and $319 million charges for fiscal 2011. Employee Savings and Retirement Plan Applied’s Employee Savings and Retirement Plan (the 401(k) Plan) is qualified under Sections 401(a) and (k) of the Internal Revenue Code (the Code). Effective as of the close of the stock market on December 31, 2012, the Varian-sponsored 401(k) plan was merged with and into the 401(k) Plan, with the 401(k) Plan being the surviving plan. Eligible employees may make salary deferral and catch-up contributions under the 401(k) Plan on a pre-tax basis and/or (effective as of the first payroll period beginning on or after December 22, 2012) on a Roth basis, subject to an annual dollar limit established by the Code. Applied matches 100% of participant salary and/or Roth deferral contributions up to the first 3% of eligible contribution and then 50% of every dollar between 4% and 6% of eligible contribution. Applied does not make matching contributions on any catch-up contributions made by participants. Plan participants who were employed by Applied or any of its affiliates on or after January 1, 2010 became 100% vested in their Applied matching contribution account balances. Applied’s matching contributions under the 401(k) Plan were approximately $29 million, net of $1 million in forfeitures for fiscal 2013, $37 million for fiscal 2012 and $27 million for fiscal 2011. PART I Item 1: Business Incorporated in 1967, Applied, a Delaware corporation, provides manufacturing equipment, services and software to the global semiconductor, flat panel display, solar photovoltaic (PV) and related industries. Applied’s customers include manufacturers of semiconductor wafers and chips, flat panel liquid crystal and other displays, solar PV cells and modules, and other electronic devices. These customers may use what they manufacture in their own end products or sell the items to other companies for use in advanced electronic components. Applied’s fiscal year ends on the last Sunday in October. Applied operates in four reportable segments: Silicon Systems Group, Applied Global Services, Display, and Energy and Environmental Solutions. Applied manages its business based upon these segments. A summary of financial information for each reportable segment is found in Note 16 of Notes to Consolidated Financial Statements. A discussion of factors that could affect operations is set forth under “Risk Factors” in Item 1A, which is incorporated herein by reference. Net sales by reportable segment for the past three fiscal years were as follows:
<table><tr><td></td><td colspan="2">2014</td><td colspan="2">2013</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="6">(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$5,978</td><td>66%</td><td>$4,775</td><td>64%</td><td>$5,536</td><td>64%</td></tr><tr><td>Applied Global Services</td><td>2,200</td><td>24%</td><td>2,023</td><td>27%</td><td>2,285</td><td>26%</td></tr><tr><td>Display</td><td>615</td><td>7%</td><td>538</td><td>7%</td><td>473</td><td>5%</td></tr><tr><td>Energy and Environmental Solutions</td><td>279</td><td>3%</td><td>173</td><td>2%</td><td>425</td><td>5%</td></tr><tr><td>Total</td><td>$9,072</td><td>100%</td><td>$7,509</td><td>100%</td><td>$8,719</td><td>100%</td></tr></table>
Silicon Systems Group Segment The Silicon Systems Group segment develops, manufactures and sells manufacturing equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs). Most chips are built on a silicon wafer base and include a variety of circuit components, such as transistors and other devices, that are connected by multiple layers of wiring (interconnects). Applied offers systems that perform various processes used in chip fabrication, including chemical vapor deposition (CVD), physical vapor deposition (PVD), etch, electrochemical deposition (ECD), rapid thermal processing (RTP), ion implantation, chemical mechanical planarization (CMP), epitaxy (Epi), wet cleaning, atomic layer deposition (ALD), wafer metrology and inspection, and systems that etch or inspect circuit patterns on masks used in the photolithography process. Applied’s semiconductor manufacturing systems are used by integrated device manufacturers and foundries to build and package memory, logic and other types of chips. The majority of the Company's new equipment sales are for leading-edge technology for advanced 2X nanometer (nm) nodes and smaller dimensions. To build a chip, the transistors, capacitors and other circuit components are first created on the surface of the wafer by performing a series of processes to deposit and selectively remove portions of successive film layers. Similar processes are then used to build the layers of wiring structures on the wafer. As the density of the circuit components increases to enable greater computing capability in the same or smaller physical area, the complexity of building the chip also increases, necessitating more process steps to form smaller transistor structures and more intricate wiring schemes. Advanced chip designs require more than 500 steps involving these and other processes to complete the manufacturing cycle. APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following table summarizes information with respect to options outstanding and exercisable at October 26, 2014:
<table><tr><td></td><td colspan="4">Options Outstanding</td><td colspan="3">Options Exercisable</td></tr><tr><td>Range ofExercise Prices</td><td>Number ofShares (In millions)</td><td>WeightedAverageExercisePrice</td><td>WeightedAverageRemainingContractualLife (In years)</td><td>AggregateIntrinsicValue (In millions)</td><td>Number ofShares (In millions)</td><td>WeightedAverageExercisePrice</td><td>AggregateIntrinsicValue (In millions)</td></tr><tr><td>$3.36 — $9.99</td><td>1</td><td>$5.31</td><td>1.81</td><td>$12</td><td>1</td><td>$5.30</td><td>$12</td></tr><tr><td>$10.00 — $15.06</td><td>1</td><td>$14.96</td><td>5.59</td><td>7</td><td>—</td><td>$14.71</td><td>2</td></tr><tr><td></td><td>2</td><td>$10.87</td><td>3.99</td><td>$19</td><td>1</td><td>$7.97</td><td>$14</td></tr><tr><td>Options exercisable and expected to become exercisable</td><td>2</td><td>$10.87</td><td>3.99</td><td>$19</td><td></td><td></td><td></td></tr></table>
Option prices at the lower end of the range were principally attributable to stock options assumed in connection with the Varian acquisition in fiscal year 2012. Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units Restricted stock units are converted into shares of Applied common stock upon vesting on a one-for-one basis. Restricted stock has the same rights as other issued and outstanding shares of Applied common stock except these shares generally have no right to dividends and are held in escrow until the award vests. Performance shares and performance units are awards that result in a payment to a grantee, generally in shares of Applied common stock on a one-for-one basis if performance goals and/or other vesting criteria established by the Human Resources and Compensation Committee of Applied's Board of Directors (the Committee) are achieved or the awards otherwise vest. Restricted stock units, restricted stock, performance shares and performance units typically vest over four years and vesting is usually subject to the grantee’s continued service with Applied and, in some cases, achievement of specified performance goals. The compensation expense related to the service-based awards is determined using the fair market value of Applied common stock on the date of the grant, and the compensation expense is recognized over the vesting period. Restricted stock, performance shares and performance units granted to certain executive officers are subject to the achievement of specified performance goals (performance-based awards). These performance-based awards become eligible to vest only if performance goals are achieved and then actually will vest only if the grantee remains employed by Applied through each applicable vesting date. These performance-based awards require the achievement of targeted levels of adjusted annual operating profit margin. For the fiscal 2013 performance-based awards, additional shares become eligible for time-based vesting if Applied achieves certain levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Information Technology Index, measured at the end of a two-year period. The fair value of these performance-based awards is estimated on the date of grant and assumes that the specified performance goals will be achieved. If the goals are achieved, these awards vest over a specified remaining service period of generally three or four years, provided that the grantee remains employed by Applied through each scheduled vesting date. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost of each award is reflected over the service period and is reduced for estimated forfeitures. Fiscal 2012 was characterized by significant fluctuations in demand for semiconductor equipment, coupled with an extremely weak market environment for display and solar equipment. Applied completed its acquisition of Varian Semiconductor Equipment Associates, Inc. (Varian) in the first quarter of fiscal 2012. Mobility was the greatest influence on semiconductor industry spending in fiscal 2012. Investment levels for display equipment were low in fiscal 2012 due to decreased capacity requirements for larger flat panel televisions, while demand for mobility products, such as smartphones and tablets, significantly influenced equipment spending. In the solar industry, fiscal 2012 was characterized by excess manufacturing capacity, which led to significantly reduced demand for crystalline-silicon (c-Si) equipment, as well as weak operating performance and outlook. New Orders New orders by reportable segment for the past three fiscal years were as follows:
<table><tr><td></td><td colspan="2">2014</td><td>Change2014 over 2013</td><td colspan="2">2013</td><td>Change2013 over 2012</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="8">(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$6,132</td><td>64%</td><td>11%</td><td>$5,507</td><td>65%</td><td>4%</td><td>$5,294</td><td>66%</td></tr><tr><td>Applied Global Services</td><td>2,433</td><td>25%</td><td>16%</td><td>2,090</td><td>25%</td><td>-8%</td><td>2,274</td><td>28%</td></tr><tr><td>Display</td><td>845</td><td>9%</td><td>20%</td><td>703</td><td>8%</td><td>157%</td><td>274</td><td>4%</td></tr><tr><td>Energy and Environmental Solutions</td><td>238</td><td>2%</td><td>43%</td><td>166</td><td>2%</td><td>-15%</td><td>195</td><td>2%</td></tr><tr><td>Total</td><td>$9,648</td><td>100%</td><td>14%</td><td>$8,466</td><td>100%</td><td>5%</td><td>$8,037</td><td>100%</td></tr></table>
New orders increased in fiscal 2014 from fiscal 2013 across all segments, primarily due to higher demand for semiconductor equipment, semiconductor spares and services, and display equipment. New orders for the Silicon Systems Group and Applied Global Services continued to comprise a majority of Applied's consolidated total new orders. New orders for fiscal 2013 increased compared to fiscal 2012, primarily due to a recovery in demand for display manufacturing equipment and increased demand in semiconductor equipment, partially offset by lower demand for service products, as well as depressed demand for c-Si solar equipment due to excess manufacturing capacity in the solar industry. New orders by geographic region, determined by the product shipment destination specified by the customer, were as follows:
<table><tr><td></td><td colspan="2">2014</td><td>Change2014 over 2013</td><td colspan="2">2013</td><td>Change2013 over 2012</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="8">(In millions, except percentages)</td></tr><tr><td>Taiwan</td><td>$2,740</td><td>28%</td><td>-5%</td><td>$2,885</td><td>34%</td><td>34%</td><td>$2,155</td><td>27%</td></tr><tr><td>China</td><td>1,517</td><td>16%</td><td>13%</td><td>1,339</td><td>16%</td><td>232%</td><td>403</td><td>5%</td></tr><tr><td>Korea</td><td>1,086</td><td>11%</td><td>19%</td><td>915</td><td>11%</td><td>-49%</td><td>1,784</td><td>22%</td></tr><tr><td>Japan</td><td>1,031</td><td>11%</td><td>25%</td><td>822</td><td>10%</td><td>37%</td><td>600</td><td>7%</td></tr><tr><td>Southeast Asia</td><td>412</td><td>4%</td><td>17%</td><td>351</td><td>4%</td><td>24%</td><td>283</td><td>4%</td></tr><tr><td>Asia Pacific</td><td>6,786</td><td>70%</td><td>8%</td><td>6,312</td><td>75%</td><td>21%</td><td>5,225</td><td>65%</td></tr><tr><td>United States</td><td>2,200</td><td>23%</td><td>55%</td><td>1,419</td><td>17%</td><td>-29%</td><td>1,995</td><td>25%</td></tr><tr><td>Europe</td><td>662</td><td>7%</td><td>-10%</td><td>735</td><td>8%</td><td>-10%</td><td>817</td><td>10%</td></tr><tr><td>Total</td><td>$9,648</td><td>100%</td><td>14%</td><td>$8,466</td><td>100%</td><td>5%</td><td>$8,037</td><td>100%</td></tr></table>
The changes in new orders from customers in the United States, Japan, Taiwan and Korea for fiscal 2014 compared to fiscal 2013 primarily reflected changes in customers mix in the Silicon Systems Group, while the increase in new orders from China resulted from increased demand from display manufacturing equipment. The recovery in demand for display manufacturing equipment in fiscal 2013 led to the increase in new orders from customers in China. The change in the composition of new orders from customers in Taiwan, Korea, Japan and the United States was primarily related to changes in customer demand for semiconductor equipment. New Term Loan A Facility, with the remaining unpaid principal amount of loans under the New Term Loan A Facility due and payable in full at maturity on June 6, 2021. Principal amounts outstanding under the New Revolving Loan Facility are due and payable in full at maturity on June 6, 2021, subject to earlier repayment pursuant to the springing maturity date described above. In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total leverage ratio, with a maximum commitment fee of 40% of the applicable margin for Eurocurrency loans. In July 2016, Breakaway Four, Ltd. , as borrower, and NCLC, as guarantor, entered into a Supplemental Agreement, which amended the Breakaway four loan to, among other things, increase the aggregate principal amount of commitments under the multi-draw term loan credit facility from €590.5 million to €729.9 million. In June 2016, we took delivery of Seven Seas Explorer. To finance the payment due upon delivery, we had export credit financing in place for 80% of the contract price. The associated $373.6 million term loan bears interest at 3.43% with a maturity date of June 30, 2028. Principal and interest payments shall be paid semiannually. In December 2016, NCLC issued $700.0 million aggregate principal amount of 4.750% senior unsecured notes due December 2021 (the ¡°Notes¡±) in a private offering (the ¡°Offering¡±) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers¡¯ discount and estimated fees and expenses, together with cash on hand, to purchase its outstanding 5.25% senior notes due 2019 having an aggregate outstanding principal amount of $680 million. The redemption of the 5.25% senior notes due 2019 was completed in January 2017. NCLC will pay interest on the Notes at 4.750% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2017, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2018, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a ¡°make-whole premium. ¡± NCLC may redeem the Notes, in whole or in part, on or after December 15, 2018, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2018, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 104.750% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC¡¯s ability (and its restricted subsidiaries¡¯ ability) to, among other things: (i) incur or guarantee additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain other restricted payments; (iii) create restrictions on the payment of dividends or other distributions to NCLC from its restricted subsidiaries; (iv) create liens on certain assets to secure debt; (v) make certain investments; (vi) engage in transactions with affiliates; (vii) engage in sales of assets and subsidiary stock; and (viii) transfer all or substantially all of its assets or enter into merger or consolidation transactions. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately. Interest expense, net for the year ended December 31, 2016 was $276.9 million which included $34.7 million of amortization of deferred financing fees and a $27.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2015 was $221.9 million which included $36.7 million of amortization of deferred financing fees and a $12.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2014 was $151.8 million which included $32.3 million of amortization of deferred financing fees and $15.4 million of expenses related to financing transactions in connection with the Acquisition of Prestige. Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends. Substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt. We believe we were in compliance with these covenants as of December 31, 2016. The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2016 for each of the next five years (in thousands): |
-0.19879 | In the year with lowest amount of Total writedowns in terms of Fixed Maturity Securities, what's the growth rate of Proceeds in terms of Fixed Maturity Securities? | Gross other postretirement benefit payments for the next ten years, which reflect expected future service where appropriate, and gross subsidies to be received under the Prescription Drug Act are expected to be as follows:
<table><tr><td></td><td> Gross</td><td> Prescription Drug Subsidies (In millions)</td><td> Net</td></tr><tr><td>2009</td><td>$135</td><td>$-15</td><td>$120</td></tr><tr><td>2010</td><td>$140</td><td>$-16</td><td>$124</td></tr><tr><td>2011</td><td>$146</td><td>$-16</td><td>$130</td></tr><tr><td>2012</td><td>$150</td><td>$-17</td><td>$133</td></tr><tr><td>2013</td><td>$154</td><td>$-18</td><td>$136</td></tr><tr><td>2014-2018</td><td>$847</td><td>$-107</td><td>$740</td></tr></table>
Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments are as follows:
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td> 2008</td><td> 2007</td></tr><tr><td></td><td colspan="2"> (In millions)</td></tr><tr><td>Other Assets:</td><td></td><td></td></tr><tr><td>Premium tax offset for future undiscounted assessments</td><td>$50</td><td>$40</td></tr><tr><td>Premium tax offsets currently available for paid assessments</td><td>7</td><td>6</td></tr><tr><td>Receivable for reimbursement of paid assessments -1</td><td>7</td><td>7</td></tr><tr><td></td><td>$64</td><td>$53</td></tr><tr><td>Other Liabilities:</td><td></td><td></td></tr><tr><td>Insolvency assessments</td><td>$83</td><td>$74</td></tr></table>
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement. Assessments levied against the Company were $2 million, ($1) million and $2 million for the years ended December 31, 2008, 2007 and 2006, respectively. Effects of Inflation The Company does not believe that inflation has had a material effect on its consolidated results of operations, except insofar as inflation may affect interest rates. Inflation in the United States has remained contained and been in a general downtrend for an extended period. However, in light of recent and ongoing aggressive fiscal and monetary stimulus measures by the U. S. federal government and foreign governments, it is possible that inflation could increase in the future. An increase in inflation could affect our business in several ways. During inflationary periods, the value of fixed income investments falls which could increase realized and unrealized losses. Inflation also increases expenses for labor and other materials, potentially putting pressure on profitability if such costs can not be passed through in our product prices. Inflation could also lead to increased costs for losses and loss adjustment expenses in our Auto & Home business, which could require us to adjust our pricing to reflect our expectations for future inflation. If actual inflation exceeds the expectations we use in pricing our policies, the profitability of our Auto & Home business would be adversely affected. Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities. Adoption of New Accounting Pronouncements Fair Value Effective January 1, 2008, the Company adopted SFAS No.157, Fair Value Measurements. SFAS 157 which defines fair value, establishes a consistent framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and requires enhanced disclosures about fair value measurements and applied the provisions of the statement prospectively to assets and liabilities measured at fair value. The adoption of SFAS 157 changed the valuation of certain freestanding derivatives by moving from a mid to bid pricing convention as it relates to certain volatility inputs as well as the addition of liquidity adjustments and adjustments for risks inherent in a particular input or valuation technique. The adoption of SFAS 157 also changed the valuation of the Company’s embedded derivatives, most significantly the valuation of embedded derivatives associated with certain riders on variable annuity contracts. The change in valuation of embedded derivatives associated with riders on annuity contracts resulted from the incorporation of risk margins associated with non capital market inputs and the inclusion of the Company’s own credit standing in their valuation. At January 1, 2008, the impact of adopting SFAS 157 on assets and liabilities measured at estimated fair value was $30 million ($19 million, net of income tax) and was recognized as a change in estimate in the accompanying consolidated statement of income where it was presented in the respective income statement caption to which the item measured at estimated fair value is presented. There were no significant changes in estimated fair value of items measured at fair value and reflected in accumulated other comprehensive income (loss). The addition of risk margins and the Company’s own credit spread in the valuation of embedded derivatives associated with annuity contracts may result in significant volatility in the Company’s consolidated net income in future periods. Note 24 of the Notes to the At December 31, 2008 and 2007, the Company’s gross unrealized losses related to its fixed maturity and equity securities of $29.8 billion and $4.7 billion, respectively, were concentrated, calculated as a percentage of gross unrealized loss, as follows:
<table><tr><td></td><td colspan="2"> December 31,</td></tr><tr><td></td><td>2008</td><td> 2007</td></tr><tr><td> Sector:</td><td></td><td></td></tr><tr><td>U.S. corporate securities</td><td>33%</td><td>44%</td></tr><tr><td>Foreign corporate securities</td><td>19</td><td>16</td></tr><tr><td>Residential mortgage-backed securities</td><td>16</td><td>8</td></tr><tr><td>Asset-backed securities</td><td>13</td><td>11</td></tr><tr><td>Commercial mortgage-backed securities</td><td>11</td><td>4</td></tr><tr><td>State and political subdivision securities</td><td>3</td><td>2</td></tr><tr><td>Foreign government securities</td><td>1</td><td>4</td></tr><tr><td>Other</td><td>4</td><td>11</td></tr><tr><td>Total</td><td>100%</td><td>100%</td></tr><tr><td> Industry:</td><td></td><td></td></tr><tr><td>Mortgage-backed</td><td>27%</td><td>12%</td></tr><tr><td>Finance</td><td>24</td><td>33</td></tr><tr><td>Asset-backed</td><td>13</td><td>11</td></tr><tr><td>Consumer</td><td>11</td><td>3</td></tr><tr><td>Utility</td><td>8</td><td>8</td></tr><tr><td>Communication</td><td>5</td><td>2</td></tr><tr><td>Industrial</td><td>4</td><td>19</td></tr><tr><td>Foreign government</td><td>1</td><td>4</td></tr><tr><td>Other</td><td>7</td><td>8</td></tr><tr><td>Total</td><td>100%</td><td>100%</td></tr></table>
Writedowns. The components of fixed maturity and equity securities net investment gains (losses) are as follows:
<table><tr><td></td><td colspan="3">Fixed Maturity Securities</td><td colspan="3">Equity Securities</td><td colspan="3">Total</td></tr><tr><td></td><td>2008</td><td>2007</td><td>2006</td><td>2008</td><td>2007</td><td>2006</td><td>2008</td><td>2007</td><td>2006</td></tr><tr><td></td><td colspan="9">(In millions)</td></tr><tr><td>Proceeds</td><td>$62,495</td><td>$78,001</td><td>$86,725</td><td>$2,107</td><td>$1,112</td><td>$845</td><td>$64,602</td><td>$79,113</td><td>$87,570</td></tr><tr><td>Gross investment gains</td><td>858</td><td>554</td><td>421</td><td>436</td><td>226</td><td>130</td><td>1,294</td><td>780</td><td>551</td></tr><tr><td>Gross investment losses</td><td>-1,511</td><td>-1,091</td><td>-1,484</td><td>-263</td><td>-43</td><td>-22</td><td>-1,774</td><td>-1,134</td><td>-1,506</td></tr><tr><td>Writedowns</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Credit-related</td><td>-1,138</td><td>-58</td><td>-56</td><td>-90</td><td>-19</td><td>-24</td><td>-1,228</td><td>-77</td><td>-80</td></tr><tr><td>Other than credit-related -1</td><td>-158</td><td>-20</td><td>—</td><td>-340</td><td>—</td><td>—</td><td>-498</td><td>-20</td><td>—</td></tr><tr><td>Total writedowns</td><td>-1,296</td><td>-78</td><td>-56</td><td>-430</td><td>-19</td><td>-24</td><td>-1,726</td><td>-97</td><td>-80</td></tr><tr><td>Net investment gains (losses)</td><td>$-1,949</td><td>$-615</td><td>$-1,119</td><td>$-257</td><td>$164</td><td>$84</td><td>$-2,206</td><td>$-451</td><td>$-1,035</td></tr></table>
(1) Other than credit-related writedowns include items such as equity securities where the primary reason for the writedown was the severity and/or the duration of an unrealized loss position and fixed maturity securities where an interest-rate related writedown was taken. Overview of Fixed Maturity and Equity Security Writedowns. Writedowns of fixed maturity and equity securities were $1.7 billion, $97 million and $80 million for the years ended December 31, 2008, 2007 and 2006, respectively. Writedowns of fixed maturity securities were $1.3 billion, $78 million and $56 million for the years ended December 31, 2008, 2007 and 2006, respectively. Writedowns of equity securities were $430 million, $19 million and $24 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s credit-related writedowns of fixed maturity and equity securities were $1.2 billion, $77 million and $80 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s credit-related writedowns of fixed maturity securities were $1.1 billion, $58 million and $56 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company’s creditrelated writedowns of equity securities were $90 million, $19 million and $24 million for the years ended December 31, 2008, 2007 and 2006, respectively. The $90 million of credit-related equity securities writedowns in 2008 were primarily on non-redeemable preferred securities. The Company’s three largest impairments totaled $528 million, $19 million and $33 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company records impairments as investment losses and adjusts the cost basis of the fixed maturity and equity securities accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. Failure to comply with the financial and other covenants under our Credit Facilities, as well as the occurrence of certain material adverse events, would constitute defaults and would allow the lenders under our Credit Facilities to accelerate the maturity of all indebtedness under the related agreements. This could also have an adverse impact on the availability of financial assurances. In addition, maturity acceleration on our Credit Facilities constitutes an event of default under our other debt instruments, including our senior notes, and, therefore, our senior notes would also be subject to acceleration of maturity. If such acceleration were to occur, we would not have sufficient liquidity available to repay the indebtedness. We would likely have to seek an amendment under our Credit Facilities for relief from the financial covenants or repay the debt with proceeds from the issuance of new debt or equity, or asset sales, if necessary. We may be unable to amend our Credit Facilities or raise sufficient capital to repay such obligations in the event the maturities are accelerated. Financial assurance We are required to provide financial assurance to governmental agencies and a variety of other entities under applicable environmental regulations relating to our landfill operations for capping, closure and post-closure costs, and related to our performance under certain collection, landfill and transfer station contracts. We satisfy these financial assurance requirements by providing surety bonds, letters of credit, insurance policies or trust deposits. The amount of the financial assurance requirements for capping, closure and post-closure costs is determined by applicable state environmental regulations. The financial assurance requirements for capping, closure and post-closure costs may be associated with a portion of the landfill or the entire landfill. Generally, states will require a third-party engineering specialist to determine the estimated capping, closure and postclosure costs that are used to determine the required amount of financial assurance for a landfill. The amount of financial assurance required can, and generally will, differ from the obligation determined and recorded under U. S. GAAP. The amount of the financial assurance requirements related to contract performance varies by contract. Additionally, we are required to provide financial assurance for our insurance program and collateral for certain performance obligations. We do not expect a material increase in financial assurance requirements during 2010, although the mix of financial assurance instruments may change. These financial instruments are issued in the normal course of business and are not debt of our company. Since we currently have no liability for these financial assurance instruments, they are not reflected in our consolidated balance sheets. However, we record capping, closure and post-closure liabilities and self-insurance liabilities as they are incurred. The underlying obligations of the financial assurance instruments, in excess of those already reflected in our consolidated balance sheets, would be recorded if it is probable that we would be unable to fulfill our related obligations. We do not expect this to occur. Off-Balance Sheet Arrangements We have no off-balance sheet debt or similar obligations, other than financial assurance instruments and operating leases that are not classified as debt. We do not guarantee any third-party debt. Free Cash Flow We define free cash flow, which is not a measure determined in accordance with U. S. GAAP, as cash provided by operating activities less purchases of property and equipment, plus proceeds from sales of property and equipment as presented in our consolidated statements of cash flows. Our free cash flow for the years ended December 31, 2009, 2008 and 2007 is calculated as follows (in millions): |
2,198 | What was the average amount of Total stock-based compensation for Three Months Ended Dec 31,2009,Three Months Ended Mar 31,2010,Three Months Ended Jun 30,2010? (in thousand) | (2) Includes stock-based compensation expense and asset acquisition related write-offs as follows:
<table><tr><td></td><td colspan="8">Three Months Ended</td></tr><tr><td></td><td>Mar 29,2009</td><td>Jun 28,2009</td><td>Sept 30,2009</td><td>Dec 31,2009</td><td>Mar 31,2010</td><td>Jun 30,2010</td><td>Sept 30,2010</td><td>Dec 31,2010</td></tr><tr><td></td><td colspan="8">($ amounts in 000's)</td></tr><tr><td>Cost of product revenue</td><td>24</td><td>27</td><td>25</td><td>26</td><td>24</td><td>26</td><td>26</td><td>25</td></tr><tr><td>Cost of services revenue</td><td>124</td><td>172</td><td>169</td><td>193</td><td>208</td><td>234</td><td>242</td><td>245</td></tr><tr><td>Research and development</td><td>378</td><td>498</td><td>516</td><td>571</td><td>554</td><td>587</td><td>600</td><td>598</td></tr><tr><td>Sales and marketing</td><td>644</td><td>692</td><td>767</td><td>917</td><td>866</td><td>897</td><td>1,017</td><td>1,030</td></tr><tr><td>General and administrative</td><td>380</td><td>404</td><td>459</td><td>475</td><td>496</td><td>520</td><td>549</td><td>571</td></tr><tr><td>Total stock-based compensation</td><td>1,550</td><td>1,793</td><td>1,936</td><td>2,182</td><td>2,148</td><td>2,264</td><td>2,434</td><td>2,469</td></tr><tr><td>Asset acquisition related write-offs</td><td>—</td><td>631</td><td>93</td><td>1,663</td><td>—</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Total stock based compensation and asset acquisition related write-offs</td><td>1,550</td><td>2,424</td><td>2,029</td><td>3,845</td><td>2,148</td><td>2,264</td><td>2,434</td><td>2,469</td></tr></table>
(3) See Note 7 to the Consolidated Financial Statements. Seasonality, Cyclicality and Quarterly Revenue Trends Our quarterly results reflect seasonality in the sale of our products, subscriptions and services. In general, a pattern of increased customer buying at year-end has positively impacted sales activity in the fourth quarter. In the first quarter we generally experience lower sequential billings and product revenues, which results in lower product revenue. Our product revenue in the third quarter can be negatively affected by reduced economic activity in Europe during the summer months. During fiscal 2010, the growth in the Americas during the third quarter more than offset the slight decline in Europe, but this may not always be the case. Similarly, our gross margins and operating income have been affected by these historical trends because expenses are relatively fixed in the near-term. Although these seasonal factors are common in the technology sector, historical patterns should not be considered a reliable indicator of our future sales activity or performance. On a quarterly basis, we have usually generated the majority of our product revenue in the final month of each quarter and a significant amount in the last two weeks of a quarter. We believe this is due to customer buying patterns typical in this industry. Our total quarterly revenue over the past twelve quarters has increased sequentially in every quarter except for the first quarters of fiscal 2010 and fiscal 2009. We believe these declines in the first and third quarters of fiscal 2010 are based on seasonality as discussed above, which particularly impacts our product revenue. Product revenue in all of the quarters of fiscal 2010 was higher as compared to the same periods in fiscal 2009, which we believe was due in part to the investments made in our sales organization and improvements in overall corporate IT spending. THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES Management’s Discussion and Analysis The Risk Committee of the Board and the Risk Governance Committee approve liquidity risk limits at the firmwide level, consistent with our risk appetite statement. Limits are reviewed frequently and amended, with required approvals, on a permanent and temporary basis, as appropriate, to reflect changing market or business conditions. Our liquidity risk limits are monitored by Treasury and Liquidity Risk Management. Liquidity Risk Management is responsible for identifying and escalating to senior management and/or the appropriate risk committee, on a timely basis, instances where limits have been exceeded. GCLA and Unencumbered Metrics GCLA. Based on the results of our internal liquidity risk models, described above, as well as our consideration of other factors, including, but not limited to, an assessment of our potential intraday liquidity needs and a qualitative assessment of our condition, as well as the financial markets, we believe our liquidity position as of both December 2018 and December 2017 was appropriate. We strictly limit our GCLA to a narrowly defined list of securities and cash because they are highly liquid, even in a difficult funding environment. We do not include other potential sources of excess liquidity in our GCLA, such as less liquid unencumbered securities or committed credit facilities. The table below presents information about our average GCLA
<table><tr><td></td><td colspan="2">Average for the Year Ended December</td></tr><tr><td><i>$ in millions</i></td><td> 2018</td><td>2017</td></tr><tr><td> Denomination</td><td></td><td></td></tr><tr><td>U.S. dollar</td><td> $155,348</td><td>$155,020</td></tr><tr><td>Non-U.S.dollar</td><td> 77,995</td><td>63,528</td></tr><tr><td> Total</td><td> $233,343</td><td>$218,548</td></tr><tr><td> Asset Class</td><td></td><td></td></tr><tr><td>Overnight cash deposits</td><td> $ 98,811</td><td>$ 93,617</td></tr><tr><td>U.S. government obligations</td><td> 79,810</td><td>75,108</td></tr><tr><td>U.S. agency obligations</td><td> 12,171</td><td>11,813</td></tr><tr><td>Non-U.S.governmentobligations</td><td> 42,551</td><td>38,010</td></tr><tr><td> Total</td><td> $233,343</td><td>$218,548</td></tr><tr><td> Entity Type</td><td></td><td></td></tr><tr><td>Group Inc. and Funding IHC</td><td> $ 40,920</td><td>$ 37,507</td></tr><tr><td>Major broker-dealer subsidiaries</td><td> 104,364</td><td>98,160</td></tr><tr><td>Major bank subsidiaries</td><td> 88,059</td><td>82,881</td></tr><tr><td> Total</td><td> $233,343</td><td>$218,548</td></tr></table>
In the table above: ‰ The U. S. dollar-denominated GCLA consists of (i) unencumbered U. S. government and agency obligations (including highly liquid U. S. agency mortgage-backed obligations), all of which are eligible as collateral in Federal Reserve open market operations and (ii) certain overnight U. S. dollar cash deposits. ‰ The non-U. S. dollar-denominated GCLA consists of non-U. S. government obligations (only unencumbered German, French, Japanese and U. K. government obligations) and certain overnight cash deposits in highly liquid currencies. We maintain our GCLA to enable us to meet current and potential liquidity requirements of our parent company, Group Inc. , and its subsidiaries. Our Modeled Liquidity Outflow and Intraday Liquidity Model incorporate a consolidated requirement for Group Inc. , as well as a standalone requirement for each of our major broker-dealer and bank subsidiaries. Funding IHC is required to provide the necessary liquidity to Group Inc. during the ordinary course of business, and is also obligated to provide capital and liquidity support to major subsidiaries in the event of our material financial distress or failure. Liquidity held directly in each of our major broker-dealer and bank subsidiaries is intended for use only by that subsidiary to meet its liquidity requirements and is assumed not to be available to Group Inc. or Funding IHC unless (i) legally provided for and (ii) there are no additional regulatory, tax or other restrictions. In addition, the Modeled Liquidity Outflow and Intraday Liquidity Model also incorporate a broader assessment of standalone liquidity requirements for other subsidiaries and we hold a portion of our GCLA directly at Group Inc. or Funding IHC to support such requirements. Other Unencumbered Assets. In addition to our GCLA, we have a significant amount of other unencumbered cash and financial instruments, including other government obligations, high-grade money market securities, corporate obligations, marginable equities, loans and cash deposits not included in our GCLA. The fair value of our unencumbered assets averaged $177.08 billion for 2018 and $158.41 billion for 2017. We do not consider these assets liquid enough to be eligible for our GCLA. Liquidity Regulatory Framework As a BHC, we are subject to a minimum Liquidity Coverage Ratio (LCR) under the LCR rule approved by the U. S. federal bank regulatory agencies. The LCR rule requires organizations to maintain an adequate ratio of eligible high-quality liquid assets (HQLA) to expected net cash outflows under an acute short-term liquidity stress scenario. Eligible HQLA excludes HQLA held by subsidiaries that is in excess of their minimum requirement and is subject to transfer restrictions. We are required to maintain a minimum LCR of 100%. We expect that fluctuations in client activity, business mix and the market environment will impact our average LCR. The table below presents information about our average daily LCR.
<table><tr><td></td><td colspan="2">Average for the Three Months Ended</td></tr><tr><td><i>$ in millions</i></td><td> December 2018</td><td>September 2018</td></tr><tr><td>Total HQLA</td><td> $226,473</td><td>$233,721</td></tr><tr><td>Eligible HQLA</td><td> $160,016</td><td>$170,621</td></tr><tr><td>Net cash outflows</td><td> $126,511</td><td>$133,126</td></tr><tr><td> LCR</td><td> 127%</td><td>128%</td></tr></table>
Liquidity and Capital Resources |
10,585,684 | What's the greatest value of Premiums earned for Twelve Months Ended December 31, 2015 | CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS):
<table><tr><td>CONSOLIDATED STATEMENTS OF OPERATIONS</td><td colspan="3">Twelve Months Ended December 31, 2015</td><td colspan="3">Twelve Months Ended December 31, 2014</td></tr><tr><td>AND COMPREHENSIVE INCOME (LOSS):</td><td></td><td rowspan="2">Effect of adoption of new accounting policy</td><td></td><td></td><td rowspan="2">Effect of adoption of new accounting policy</td><td></td></tr><tr><td></td><td>As previously reported</td><td>As adopted</td><td>As previously reported</td><td>As adopted</td></tr><tr><td>(Dollars in thousands)</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>REVENUES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Premiums earned</td><td>$5,481,459</td><td>$-188,617</td><td>$5,292,842</td><td>$5,169,135</td><td>$-125,428</td><td>$5,043,707</td></tr><tr><td>Net investment income</td><td>473,825</td><td>-352</td><td>473,473</td><td>530,570</td><td>-85</td><td>530,485</td></tr><tr><td>Other income (expense)</td><td>60,435</td><td>27,845</td><td>88,280</td><td>18,437</td><td>13,871</td><td>32,308</td></tr><tr><td>Total revenues</td><td>5,837,889</td><td>-161,124</td><td>5,676,765</td><td>5,790,589</td><td>-111,642</td><td>5,678,947</td></tr><tr><td>CLAIMS AND EXPENSES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Incurred losses and loss adjustment expenses</td><td>3,101,915</td><td>-37,200</td><td>3,064,715</td><td>2,906,534</td><td>-30,598</td><td>2,875,936</td></tr><tr><td>Commission, brokerage, taxes and fees</td><td>1,202,036</td><td>-18,390</td><td>1,183,646</td><td>1,135,586</td><td>-14,441</td><td>1,121,145</td></tr><tr><td>Other underwriting expenses</td><td>265,984</td><td>-8,915</td><td>257,069</td><td>240,400</td><td>-7,296</td><td>233,104</td></tr><tr><td>Total claims and expenses</td><td>4,629,380</td><td>-64,505</td><td>4,564,875</td><td>4,344,474</td><td>-52,335</td><td>4,292,139</td></tr><tr><td>INCOME (LOSS) BEFORE TAXES</td><td>1,208,509</td><td>-96,619</td><td>1,111,890</td><td>1,446,115</td><td>-59,307</td><td>1,386,808</td></tr><tr><td>NET INCOME (LOSS)</td><td>1,074,488</td><td>-96,619</td><td>977,869</td><td>1,258,463</td><td>-59,307</td><td>1,199,156</td></tr><tr><td>Net income (loss) attributable to noncontrolling interests</td><td>-96,619</td><td>96,619</td><td>-</td><td>-59,307</td><td>59,307</td><td>-</td></tr><tr><td>NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP</td><td>977,869</td><td>-977,869</td><td>-</td><td>1,199,156</td><td>-1,199,156</td><td>-</td></tr></table>
<table><tr><td>CONSOLIDATED STATEMENT OF CASH FLOWS:</td><td colspan="3">Twelve Months Ended December 31, 2015</td><td colspan="3">Twelve Months Ended December 31, 2014</td></tr><tr><td>(Dollars in thousands)</td><td>As previously reported</td><td>Effect of adoption of new accounting policy</td><td>As adopted</td><td>As previously reported</td><td>Effect of adoption of new accounting policy</td><td>As adopted</td></tr><tr><td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net income (loss)</td><td>$1,074,488</td><td>$-96,619</td><td>$977,869</td><td>$1,258,463</td><td>$-59,307</td><td>$1,199,156</td></tr><tr><td>Decrease (increase) in premiums receivable</td><td>-93,837</td><td>-4,374</td><td>-98,211</td><td>45,282</td><td>3,089</td><td>48,371</td></tr><tr><td>Decrease (increase) in funds held by reinsureds, net</td><td>31,225</td><td>-75,000</td><td>-43,775</td><td>-1,835</td><td>-</td><td>-1,835</td></tr><tr><td>Decrease (increase) in reinsurance receivables</td><td>-240,414</td><td>-24,689</td><td>-265,103</td><td>-186,014</td><td>-24,634</td><td>-210,648</td></tr><tr><td>Decrease (increase) in prepaid reinsurance premiums</td><td>-14,486</td><td>-7,333</td><td>-21,819</td><td>-79,086</td><td>956</td><td>-78,130</td></tr><tr><td>Increase (decrease) in other net payable to reinsurers</td><td>38,262</td><td>5,465</td><td>43,727</td><td>29,410</td><td>-1,102</td><td>28,308</td></tr><tr><td>Change in other assets and liabilities, net</td><td>264</td><td>-9,198</td><td>-8,934</td><td>35,419</td><td>-178,054</td><td>-142,635</td></tr><tr><td>Net cash provided by (used in) operating activities</td><td>1,308,382</td><td>-211,748</td><td>1,096,634</td><td>1,313,821</td><td>-259,059</td><td>1,054,762</td></tr><tr><td>CASH FLOWS FROM INVESTING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net change in short-term investments</td><td>-98,903</td><td>440,636</td><td>341,733</td><td>-497,983</td><td>421,500</td><td>-76,483</td></tr><tr><td>Net cash provided by (used in) investing activities</td><td>-1,121,737</td><td>440,636</td><td>-681,101</td><td>-1,180,072</td><td>421,500</td><td>-758,572</td></tr><tr><td>CASH FLOWS FROM FINANCING ACTIVITIES:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Third party investment in redeemable noncontrolling interest</td><td>266,848</td><td>-266,848</td><td>-</td><td>136,200</td><td>-136,200</td><td>-</td></tr><tr><td>Subscription advances for third party redeemable noncontrolling interest</td><td>30,000</td><td>-30,000</td><td>-</td><td>40,000</td><td>-40,000</td><td>-</td></tr><tr><td>Dividends paid on third party investment in redeemable noncontrolling interest</td><td>-68,158</td><td>68,158</td><td>-</td><td>-10,334</td><td>10,334</td><td>-</td></tr><tr><td>Net cash provided by (used in) financing activities</td><td>-332,879</td><td>-228,690</td><td>-561,569</td><td>-312,232</td><td>-165,866</td><td>-478,098</td></tr><tr><td>EFFECT OF EXCHANGE RATE CHANGES ON CASH</td><td>-7,582</td><td>-198</td><td>-7,780</td><td>4,575</td><td>3,425</td><td>8,000</td></tr></table>
CONSOLIDATED STATEMENT OF CASH FLOWS: The following table presents a reconciliation of beginning and ending reserve balances for the periods indicated on a GAAP basis:
<table><tr><td></td><td colspan="3">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Gross reserves at beginning of period</td><td>$9,951.8</td><td>$9,720.8</td><td>$9,673.2</td></tr><tr><td>Incurred related to:</td><td></td><td></td><td></td></tr><tr><td>Current year</td><td>3,434.9</td><td>3,129.7</td><td>2,915.6</td></tr><tr><td>Prior years</td><td>-295.3</td><td>-65.0</td><td>-39.7</td></tr><tr><td>Total incurred losses</td><td>3,139.6</td><td>3,064.7</td><td>2,875.9</td></tr><tr><td>Paid related to:</td><td></td><td></td><td></td></tr><tr><td>Current year</td><td>745.6</td><td>690.0</td><td>755.9</td></tr><tr><td>Prior years</td><td>2,043.0</td><td>2,180.1</td><td>2,088.8</td></tr><tr><td>Total paid losses</td><td>2,788.6</td><td>2,870.1</td><td>2,844.7</td></tr><tr><td>Foreign exchange/translation adjustment</td><td>-99.9</td><td>-190.0</td><td>-160.7</td></tr><tr><td>Change in reinsurance receivables on unpaid losses and LAE</td><td>109.4</td><td>226.4</td><td>176.9</td></tr><tr><td>Gross reserves at end of period</td><td>$10,312.3</td><td>$9,951.8</td><td>$9,720.8</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table>
Incurred prior years’ reserves decreased by $295.3 million, $65.0 million and $39.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. The decrease for 2016 was attributable to favorable development in the reinsurance segments of $468.7 million related primarily to property and short-tail business in the U. S. , property business in Canada, Latin America, Middle East and Africa, as well as favorable development on prior year catastrophe losses, partially offset by $53.9 million of adverse development on A&E reserves. Part of the favorable development in the reinsurance segments related to the 2015 loss from the explosion at the Chinese port of Tianjin. In 2015, this loss was originally estimated to be $60.0 million. At December 31, 2016, this loss was projected to be $16.7 million resulting in $43.3 million of favorable development in 2016. The net favorable development in the reinsurance segments was partially offset by $173.4 million of unfavorable development in the insurance segment primarily related to run-off construction liability and umbrella program business. The decrease for 2015 was attributable to favorable development in the reinsurance segments of $217.2 million related to treaty casualty and treaty property reserves, partially offset by $152.1 million of unfavorable development in the insurance segment primarily related to umbrella program and construction liability business. The decrease for 2014 was attributable to favorable development in the reinsurance segments of $202.4 million related to treaty casualty, treaty property and catastrophe reserves, partially offset by $137.8 million development on A&E reserves and $25.0 million of unfavorable development in the insurance segment primarily related to umbrella program and construction liability business. Since the Company has operations in many countries, part of the Company’s loss and LAE reserves are in foreign currencies and translated to U. S. dollars for each reporting period. Fluctuations in the exchange rates for the currencies, period over period, affect the U. S. dollar amount of outstanding reserves. The translation adjustment line at the bottom of the table eliminates the impact of the exchange fluctuations from the reserve re-estimates. The Company’s loss reserving methodologies continuously monitor the emergence of loss and loss development trends, seeking, on a timely basis, to both adjust reserves for the impact of trend shifts and to factor the impact of such shifts into the Company’s underwriting and pricing on a prospective basis. Reserves for Asbestos and Environmental Losses and LAE. At December 31, 2016, the Company’s gross reserves for A&E claims represented 4.3% of its total reserves. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. Liabilities related to Mt. McKinley’s direct business, which had been ceded to Bermuda Re previously, were retroceded to an affiliate of Clearwater Insurance Company in July 2015, concurrent with the sale of Mt. McKinley to Clearwater Insurance Company. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims and ultimate values cannot be estimated using traditional reserving techniques. See ITEM 7, “Management’s Discussion Other expense, net increased $0.8 million to $7.2 million in 2015 from $6.4 million in 2014. This increase was due to higher net losses on the combined foreign currency exchange rate changes on transactions denominated in foreign currencies and our foreign currency derivative financial instruments in 2015. Provision for income taxes increased $19.9 million to $154.1 million in 2015 from $134.2 million in 2014. Our effective tax rate was 39.9% in 2015 compared to 39.2% in 2014. Our effective tax rate for 2015 was higher than the effective tax rate for 2014 primarily due to increased non-deductible costs incurred in connection with our Connected Fitness acquisitions in 2015. Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 Net revenues increased $752.3 million, or 32.3%, to $3,084.4 million in 2014 from $2,332.1 million in 2013. Net revenues by product category are summarized below: |
0.18193 | What is the growing rate of Amplifiers/Radio frequency in table 0 in the year with the most Converters in table 0? | The year-to-year increase in communications end market revenue in fiscal 2014 was primarily a result of increased wireless base station deployment activity and, to a lesser extent, an increase in revenue as a result of the Acquisition. Industrial end market revenue increased year-over-year in fiscal 2014 as compared to fiscal 2013 as a result of an increase in demand in this end market, which was most significant for products sold into the instrumentation and automation sectors and, to a lesser extent, an increase in revenue as a result of the Acquisition. The year-to-year increase in automotive end market revenue in fiscal 2014 was primarily a result of increasing electronic content in vehicles and higher demand for new vehicles. The year-toyear decrease in revenue in the consumer end market in fiscal 2014 was primarily the result of the sale of our microphone product line in the fourth quarter of fiscal 2013. The year-to-year decrease in revenue in the industrial and consumer end markets in fiscal 2013 was primarily the result of a weak global economic environment and one less week of operations in fiscal 2013 as compared to fiscal 2012. Automotive end market revenue increased in fiscal 2013 primarily as a result of increasing electronic content in vehicles. Revenue Trends by Product Type The following table summarizes revenue by product categories. The categorization of our products into broad categories is based on the characteristics of the individual products, the specification of the products and in some cases the specific uses that certain products have within applications. The categorization of products into categories is therefore subject to judgment in some cases and can vary over time. In instances where products move between product categories, we reclassify the amounts in the product categories for all prior periods. Such reclassifications typically do not materially change the sizing of, or the underlying trends of results within, each product category
<table><tr><td></td><td colspan="3">2014</td><td colspan="2">2013</td><td colspan="2">2012</td></tr><tr><td></td><td>Revenue</td><td>% ofTotalProductRevenue*</td><td>Y/Y%</td><td>Revenue</td><td>% ofTotalProductRevenue*</td><td>Revenue</td><td>% ofTotalProductRevenue*</td></tr><tr><td>Converters</td><td>$1,285,368</td><td>45%</td><td>9%</td><td>$1,180,072</td><td>45%</td><td>$1,192,064</td><td>44%</td></tr><tr><td>Amplifiers/Radio frequency</td><td>806,975</td><td>28%</td><td>18%</td><td>682,759</td><td>26%</td><td>697,687</td><td>26%</td></tr><tr><td>Other analog</td><td>356,406</td><td>12%</td><td>-4%</td><td>372,281</td><td>14%</td><td>397,376</td><td>15%</td></tr><tr><td>Subtotal analog signal processing</td><td>2,448,749</td><td>85%</td><td>10%</td><td>2,235,112</td><td>85%</td><td>2,287,127</td><td>85%</td></tr><tr><td>Power management & reference</td><td>174,483</td><td>6%</td><td>1%</td><td>172,920</td><td>7%</td><td>182,134</td><td>7%</td></tr><tr><td>Total analog products</td><td>$2,623,232</td><td>92%</td><td>9%</td><td>$2,408,032</td><td>91%</td><td>$2,469,261</td><td>91%</td></tr><tr><td>Digital signal processing</td><td>241,541</td><td>8%</td><td>7%</td><td>225,657</td><td>9%</td><td>231,881</td><td>9%</td></tr><tr><td>Total Revenue</td><td>$2,864,773</td><td>100%</td><td>9%</td><td>$2,633,689</td><td>100%</td><td>$2,701,142</td><td>100%</td></tr></table>
The sum of the individual percentages does not equal the total due to rounding. The year-to-year increase in total revenue in fiscal 2014 as compared to fiscal 2013 was the result of improving demand across most product type categories and the result of the Acquisition, which was partially offset by declines in the other analog product category, primarily as a result of the sale of our microphone product line in the fourth quarter of fiscal 2013. The year-to-year decrease in total revenue in fiscal 2013 as compared to fiscal 2012 was the result of one less week of operations in fiscal 2013 as compared to fiscal 2012 and a broad-based decrease in demand across most product type categories. Revenue Trends by Geographic Region Revenue by geographic region, based upon the primary location of our customers' design activity for its products, for fiscal 2014, 2013 and 2012 was as follows. ANALOG DEVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
<table><tr><td>Stock Options</td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Options granted (in thousands)</td><td>2,240</td><td>2,407</td><td>2,456</td></tr><tr><td>Weighted-average exercise price</td><td>$51.52</td><td>$46.40</td><td>$39.58</td></tr><tr><td>Weighted-average grant-date fair value</td><td>$8.74</td><td>$7.38</td><td>$7.37</td></tr><tr><td>Assumptions:</td><td></td><td></td><td></td></tr><tr><td>Weighted-average expected volatility</td><td>24.9%</td><td>24.6%</td><td>28.4%</td></tr><tr><td>Weighted-average expected term (in years)</td><td>5.3</td><td>5.4</td><td>5.3</td></tr><tr><td>Weighted-average risk-free interest rate</td><td>1.7%</td><td>1.0%</td><td>1.1%</td></tr><tr><td>Weighted-average expected dividend yield</td><td>2.9%</td><td>2.9%</td><td>3.0%</td></tr></table>
As it relates to our market-based restricted stock units, the Company utilizes the Monte Carlo simulation valuation model to value these awards. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the performance conditions stipulated in the award grant and calculates the fair market value for the market-based restricted stock units granted. The Monte Carlo simulation model also uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions, including the possibility that the market condition may not be satisfied, and the resulting fair value of the award. Information pertaining to the Company's market-based restricted stock units and the related estimated assumptions used to calculate the fair value of market-based restricted stock units granted using the Monte Carlo simulation model is as follows:
<table><tr><td>Market-based Restricted Stock Units</td><td>2014</td></tr><tr><td>Units granted (in thousands)</td><td>86</td></tr><tr><td>Grant-date fair value</td><td>$50.79</td></tr><tr><td>Assumptions:</td><td></td></tr><tr><td>Historical stock price volatility</td><td>23.2%</td></tr><tr><td>Risk-free interest rate</td><td>0.8%</td></tr><tr><td>Expected dividend yield</td><td>2.8%</td></tr></table>
Market-based restricted stock units were not granted during fiscal 2013 or 2012. Expected volatility — The Company is responsible for estimating volatility and has considered a number of factors, including third-party estimates. The Company currently believes that the exclusive use of implied volatility results in the best estimate of the grant-date fair value of employee stock options because it reflects the market’s current expectations of future volatility. In evaluating the appropriateness of exclusively relying on implied volatility, the Company concluded that: (1) options in the Company’s common stock are actively traded with sufficient volume on several exchanges; (2) the market prices of both the traded options and the underlying shares are measured at a similar point in time to each other and on a date close to the grant date of the employee share options; (3) the traded options have exercise prices that are both near-the-money and close to the exercise price of the employee share options; and (4) the remaining maturities of the traded options used to estimate volatility are at least one year. Expected term — The Company uses historical employee exercise and option expiration data to estimate the expected term assumption for the Black-Scholes grant-date valuation. The Company believes that this historical data is currently the best estimate of the expected term of a new option, and that generally its employees exhibit similar exercise behavior. Risk-free interest rate — The yield on zero-coupon U. S. Treasury securities for a period that is commensurate with the expected term assumption is used as the risk-free interest rate. Expected dividend yield — Expected dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors for the current quarter and dividing that result by the closing stock price on the date of grant. Until such time as the Company’s Board of Directors declares a cash dividend for an amount that is different from the current quarter’s cash dividend, the current dividend will be used in deriving this assumption. Cash dividends are not paid on options, restricted stock or restricted stock units. an adverse development with respect to one claim in 2008 and favorable developments in three cases in 2009. Other costs were also lower in 2009 compared to 2008, driven by a decrease in expenses for freight and property damages, employee travel, and utilities. In addition, higher bad debt expense in 2008 due to the uncertain impact of the recessionary economy drove a favorable year-over-year comparison. Conversely, an additional expense of $30 million related to a transaction with Pacer International, Inc. and higher property taxes partially offset lower costs in 2009. Other costs were higher in 2008 compared to 2007 due to an increase in bad debts, state and local taxes, loss and damage expenses, utility costs, and other miscellaneous expenses totaling $122 million. Conversely, personal injury costs (including asbestos-related claims) were $8 million lower in 2008 compared to 2007. The reduction reflects improvements in our safety experience and lower estimated costs to resolve claims as indicated in the actuarial studies of our personal injury expense and annual reviews of asbestos-related claims in both 2008 and 2007. The year-over-year comparison also includes the negative impact of adverse development associated with one claim in 2008. In addition, environmental and toxic tort expenses were $7 million lower in 2008 compared to 2007. Non-Operating Items |
0.15099 | As As the chart 3 shows,what's the growth rate of the value of Total revenues for Regulated Natural Gas in 2008? | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Union Pacific Corporation and Subsidiary Companies For purposes of this report, unless the context otherwise requires, all references herein to the “Corporation”, “UPC”, “we”, “us”, and “our” mean Union Pacific Corporation and its subsidiaries, including Union Pacific Railroad Company, which will be separately referred to herein as “UPRR” or the “Railroad”.1. Nature of Operations Operations and Segmentation – We are a Class I railroad that operates in the U. S. We have 31,953 route miles, linking Pacific Coast and Gulf Coast ports with the Midwest and eastern U. S. gateways and providing several corridors to key Mexican gateways. We serve the western two-thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from the Atlantic Coast, the Pacific Coast, the Southeast, the Southwest, Canada, and Mexico. Export and import traffic is moved through Gulf Coast and Pacific Coast ports and across the Mexican and Canadian borders. The Railroad, along with its subsidiaries and rail affiliates, is our one reportable operating segment. Although revenues are analyzed by commodity group, we analyze the net financial results of the Railroad as one segment due to the integrated nature of our rail network. The following table provides revenue by commodity group:
<table><tr><td><i>Millions</i></td><td><i>2010</i></td><td><i>2009</i></td><td><i>2008</i></td></tr><tr><td>Agricultural</td><td>$3,018</td><td>$2,666</td><td>$3,174</td></tr><tr><td>Automotive</td><td>1,271</td><td>854</td><td>1,344</td></tr><tr><td>Chemicals</td><td>2,425</td><td>2,102</td><td>2,494</td></tr><tr><td>Energy</td><td>3,489</td><td>3,118</td><td>3,810</td></tr><tr><td>Industrial Products</td><td>2,639</td><td>2,147</td><td>3,273</td></tr><tr><td>Intermodal</td><td>3,227</td><td>2,486</td><td>3,023</td></tr><tr><td>Total freight revenues</td><td>$16,069</td><td>$13,373</td><td>$17,118</td></tr><tr><td>Other revenues</td><td>896</td><td>770</td><td>852</td></tr><tr><td>Total operating revenues</td><td>$16,965</td><td>$14,143</td><td>$17,970</td></tr></table>
Although our revenues are principally derived from customers domiciled in the U. S. , the ultimate points of origination or destination for some products transported are outside the U. S. Basis of Presentation – The Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the U. S. (GAAP) as codified in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).2. Significant Accounting Policies Principles of Consolidation – The Consolidated Financial Statements include the accounts of Union Pacific Corporation and all of its subsidiaries. Investments in affiliated companies (20% to 50% owned) are accounted for using the equity method of accounting. All intercompany transactions are eliminated. We currently have no less than majority-owned investments that require consolidation under variable interest entity requirements. Cash and Cash Equivalents – Cash equivalents consist of investments with original maturities of three months or less. Accounts Receivable – Accounts receivable includes receivables reduced by an allowance for doubtful accounts. The allowance is based upon historical losses, credit worthiness of customers, and current economic conditions. Receivables not expected to be collected in one year and the associated allowances are classified as other assets in our Consolidated Statements of Financial Position. Investments – Investments represent our investments in affiliated companies (20% to 50% owned) that are accounted for under the equity method of accounting and investments in companies (less than 20% owned) accounted for under the cost method of accounting. Arrangement Contains a Lease and SFAS No.13, Accounting for Leases. Future commitments under operating and capital leases for continuing operations are:
<table><tr><td> </td><td> Other Operating Leases</td><td> Purchase Power Agreement Operating Leases<sup>(a)(b)</sup></td><td> Total Operating Leases</td><td>Capital Leases</td></tr><tr><td> </td><td colspan="4">(Millions of Dollars)</td></tr><tr><td>2009</td><td>$26.1</td><td>$160.3</td><td>$186.4</td><td>$6.0</td></tr><tr><td>2010</td><td>22.9</td><td>157.4</td><td>180.3</td><td>5.8</td></tr><tr><td>2011</td><td>20.3</td><td>147.6</td><td>167.9</td><td>5.7</td></tr><tr><td>2012</td><td>17.2</td><td>144.4</td><td>161.6</td><td>5.5</td></tr><tr><td>2013</td><td>16.7</td><td>148.1</td><td>164.8</td><td>5.3</td></tr><tr><td>Thereafter</td><td>38.1</td><td>2,322.0</td><td>2,360.1</td><td>51.5</td></tr><tr><td>Total minimum obligation</td><td></td><td></td><td></td><td>79.8</td></tr><tr><td>Interest component of obligation</td><td></td><td></td><td></td><td>-36.4</td></tr><tr><td>Present value of minimum obligation</td><td></td><td></td><td></td><td>$43.4</td></tr></table>
(a) Amounts not included in purchase power agreement estimated future payments above. (b) Purchase power agreement operating leases contractually expire through 2033. WYCO — Xcel Energy has invested approximately $128 million as of Dec. 31 2008 for construction of WYCO’s High Plains gas pipeline and the related Totem gas storage facilities. The High Plains gas pipeline began operations in 2008 and the Totem gas storage facilities are expected to begin operations in 2009. The gas pipeline and storage facilities will be leased under a FERC-approved agreement to Colorado Interstate Gas Company, a subsidiary of El Paso Corporation. Technology Agreements — Xcel Energy has a contract that extends through 2015 with International Business Machines Corp. (IBM) for information technology services. The contract is cancelable at Xcel Energy’s option, although there are financial penalties for early termination. In 2008, Xcel Energy paid IBM $110.8 million under the contract and $0.2 million for other project business. The contract also has a committed minimum payment each year from 2009 through September 2015. Payments under this obligation are $19.9 million, $19.6 million, $19.1 million, $18.9 million, $18.7 million and $32.5 million for 2009 to 2013 and thereafter, respectively. On Aug. 1, 2008, Xcel Energy entered into a contract with Accenture for information technology services, which begins on Feb. 1, 2009 and extends through 2014. The contract is cancelable at Xcel Energy’s option, although there are financial penalties for early termination. The contract also has a committed minimum payment each year from 2009 through 2014. Payments under this obligation are $11.4 million, $11.6 million, $11.6 million, $11.8 million, $12.0 million and $12.3 million for 2009 to 2013 and thereafter, respectively. Environmental Contingencies Xcel Energy and its subsidiaries have been, or are currently involved with, the cleanup of contamination from certain hazardous substances at several sites. In many situations, the subsidiary involved believes it will recover some portion of these costs through insurance claims. Additionally, where applicable, the subsidiary involved is pursuing, or intends to pursue, recovery from other potentially responsible parties (PRPs) and through the rate regulatory process. New and changing federal and state environmental mandates can also create added financial liabilities for Xcel Energy and its subsidiaries, which are normally recovered through the rate regulatory process. To the extent any costs are not recovered through the options listed above, Xcel Energy would be required to recognize an expense. Site Remediation — Xcel Energy must pay all or a portion of the cost to remediate sites where past activities of its subsidiaries or other parties have caused environmental contamination. Environmental contingencies could arise from various situations, including sites of former MGPs operated by Xcel Energy subsidiaries, predecessors, or other entities; and third-party sites, such as landfills, to which Xcel Energy is alleged to be a PRP that sent hazardous materials and wastes. At Dec. 31, 2008, the liability for the cost of remediating these sites was estimated to be $71.3 million, of which $1.5 million was considered to be a current liability. Accordingly, the recorded amounts of estimated future removal costs are considered regulatory liabilities under SFAS No.71. Removal costs by entity are as follows at Dec. 31:
<table><tr><td> </td><td> 2008</td><td> 2007</td></tr><tr><td> </td><td colspan="2"> (Millions of Dollars) </td></tr><tr><td>NSP-Minnesota</td><td>$354</td><td>$342</td></tr><tr><td>NSP-Wisconsin</td><td>96</td><td>94</td></tr><tr><td>PSCo</td><td>379</td><td>374</td></tr><tr><td>SPS</td><td>96</td><td>96</td></tr><tr><td>Total Xcel Energy</td><td>$925</td><td>$906</td></tr></table>
Nuclear Insurance NSP-Minnesota’s public liability for claims resulting from any nuclear incident is limited to $12.5 billion under the Price-Anderson amendment to the Atomic Energy Act of 1954, as amended. NSP-Minnesota has secured $300 million of coverage for its public liability exposure with a pool of insurance companies. The remaining $12.2 billion of exposure is funded by the Secondary Financial Protection Program, available from assessments by the federal government in case of a nuclear accident. NSP-Minnesota is subject to assessments of up to $117.5 million per reactor per accident for each of its three licensed reactors, to be applied for public liability arising from a nuclear incident at any licensed nuclear facility in the United States. The maximum funding requirement is $17.5 million per reactor during any one year. These maximum assessment amounts are both subject to inflation adjustment by the NRC and state premium taxes. The NRC’s last adjustment was effective Oct. 29, 2008. The next adjustment is due on or before Oct. 29, 2013. NSP-Minnesota purchases insurance for property damage and site decontamination cleanup costs from Nuclear Electric Insurance Ltd. (NEIL). The coverage limits are $2.3 billion for each of NSP-Minnesota’s two nuclear plant sites. NEIL also provides business interruption insurance coverage, including the cost of replacement power obtained during certain prolonged accidental outages of nuclear generating units. Premiums are expensed over the policy term. All companies insured with NEIL are subject to retroactive premium adjustments if losses exceed accumulated reserve funds. Capital has been accumulated in the reserve funds of NEIL to the extent that NSP-Minnesota would have no exposure for retroactive premium assessments in case of a single incident under the business interruption and the property damage insurance coverage. However, in each calendar year, NSP-Minnesota could be subject to maximum assessments of approximately $16.1 million for business interruption insurance and $29.7 million for property damage insurance if losses exceed accumulated reserve funds. Legal Contingencies Lawsuits and claims arise in the normal course of business. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition of them. The ultimate outcome of these matters cannot presently be determined. Accordingly, the ultimate resolution of these matters could have a material adverse effect on Xcel Energy’s financial position and results of operations. Gas Trading Litigation e prime is a wholly owned subsidiary of Xcel Energy. Among other things, e prime was in the business of natural gas trading and marketing. e prime has not engaged in natural gas trading or marketing activities since 2003. Twelve lawsuits have been commenced against e prime and Xcel Energy (and NSP-Wisconsin, in one instance), alleging fraud and anticompetitive activities in conspiring to restrain the trade of natural gas and manipulate natural gas prices. Xcel Energy, e prime, and NSP-Wisconsin deny these allegations and will vigorously defend against these lawsuits, including seeking dismissal and summary judgment. The initial gas-trading lawsuit, a purported class action brought by wholesale natural gas purchasers, was filed in November 2003 in the United States District Court in the Eastern District of California. e prime is one of several defendants named in the complaint. This case is captioned Texas-Ohio Energy vs. CenterPoint Energy et al. The other eleven cases arising out of the same or similar set of facts are captioned Fairhaven Power Company vs. EnCana Corporation et al. ; Ableman Art Glass vs. EnCana Corporation et al. ; Utility Savings and Refund Services LLP vs. Reliant Energy Services Inc. et al. ; Sinclair Oil Corporation vs. e prime and Xcel Energy Inc. ; Ever-Bloom Inc. vs. Xcel Energy Inc. and e prime et al. ; Learjet, Inc. vs. e prime and Xcel Energy Inc et al. ; J. P. Morgan Trust Company vs. e prime and Xcel Energy Inc. et al. ; Breckenridge Brewery vs. e prime and Xcel Energy Inc. et al. ; Missouri Public Service Commission vs. e Revenues from operating segments not included above are below the necessary quantitative thresholds and are therefore included in the all other category. Those primarily include steam revenue, appliance repair services, nonutility real estate activities, revenues associated with processing solid waste into refuse-derived fuel and investments in rental housing projects that qualify for low-income housing tax credits. To report income from continuing operations for regulated electric and regulated natural gas utility segments, Xcel Energy must assign or allocate all costs and certain other income. In general, costs are: ? Directly assigned wherever applicable; ? Allocated based on cost causation allocators wherever applicable; and ? Allocated based on a general allocator for all other costs not assigned by the above two methods. The accounting policies of the segments are the same as those described in Note 1 to the consolidated financial statements.
<table><tr><td> </td><td> Regulated Electric</td><td> Regulated Natural Gas</td><td>All Other</td><td>Reconciling Eliminations</td><td> Consolidated Total</td></tr><tr><td> </td><td colspan="5"> (Thousands of Dollars) </td></tr><tr><td> 2008</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues from external customers</td><td>$8,682,993</td><td>$2,442,988</td><td>$77,175</td><td>$—</td><td>$11,203,156</td></tr><tr><td>Intersegment revenues</td><td>973</td><td>6,793</td><td>—</td><td>-7,766</td><td>—</td></tr><tr><td>Total revenues</td><td>$8,683,966</td><td>$2,449,781</td><td>$77,175</td><td>$-7,766</td><td>$11,203,156</td></tr><tr><td>Depreciation and amortization</td><td>$715,695</td><td>$99,306</td><td>$13,378</td><td>$—</td><td>$828,379</td></tr><tr><td>Interest charges and financing costs</td><td>352,083</td><td>45,819</td><td>131,371</td><td>-15,392</td><td>513,881</td></tr><tr><td>Income tax expense (benefit)</td><td>345,543</td><td>73,647</td><td>-80,504</td><td>—</td><td>338,686</td></tr><tr><td>Income (loss) from continuing operations</td><td>$552,300</td><td>$129,298</td><td>$27,346</td><td>$-63,224</td><td>$645,720</td></tr><tr><td> 2007</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues from external customers</td><td>$7,847,992</td><td>$2,111,732</td><td>$74,446</td><td>$—</td><td>$10,034,170</td></tr><tr><td>Intersegment revenues</td><td>1,000</td><td>16,680</td><td>—</td><td>-17,680</td><td>—</td></tr><tr><td>Total revenues</td><td>$7,848,992</td><td>$2,128,412</td><td>$74,446</td><td>$-17,680</td><td>$10,034,170</td></tr><tr><td>Depreciation and amortization</td><td>$695,571</td><td>$96,323</td><td>$13,837</td><td>$—</td><td>$805,731</td></tr><tr><td>Interest charges and financing costs</td><td>318,937</td><td>43,985</td><td>180,757</td><td>-14,834</td><td>528,845</td></tr><tr><td>Income tax expense (benefit)</td><td>343,184</td><td>50,150</td><td>-98,850</td><td>—</td><td>294,484</td></tr><tr><td>Income (loss) from continuing operations</td><td>$554,670</td><td>$108,054</td><td>$-22,583</td><td>$-64,242</td><td>$575,899</td></tr><tr><td> 2006</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Operating revenues from external customers</td><td>$7,608,018</td><td>$2,155,999</td><td>$76,287</td><td>$—</td><td>$9,840,304</td></tr><tr><td>Intersegment revenues</td><td>820</td><td>12,296</td><td>—</td><td>-13,116</td><td>—</td></tr><tr><td>Total revenues</td><td>$7,608,838</td><td>$2,168,295</td><td>$76,287</td><td>$-13,116</td><td>$9,840,304</td></tr><tr><td>Depreciation and amortization</td><td>$695,321</td><td>$91,965</td><td>$15,612</td><td>$—</td><td>$802,898</td></tr><tr><td>Interest charges and financing costs</td><td>302,114</td><td>44,965</td><td>133,558</td><td>-24,605</td><td>456,032</td></tr><tr><td>Income tax expense (benefit)</td><td>283,552</td><td>37,656</td><td>-139,797</td><td>—</td><td>181,411</td></tr><tr><td>Income (loss) from continuing operations</td><td>$503,119</td><td>$70,609</td><td>$51,570</td><td>$-56,617</td><td>$568,681</td></tr></table>
21. Summarized Quarterly Financial Data (Unaudited) Due to the seasonality of Xcel Energy’s electric and natural gas sales, such interim results are not necessarily an appropriate base from which to project annual results. Summarized quarterly unaudited financial data is as follows:
<table><tr><td> </td><td colspan="4"> Quarter Ended</td></tr><tr><td> </td><td>March 31, 2008</td><td> June 30, 2008</td><td> Sept. 30, 2008</td><td> Dec. 31, 2008</td></tr><tr><td> </td><td colspan="4"> (Thousands of Dollars, except per share amounts) </td></tr><tr><td>Operating revenues</td><td>$3,028,388</td><td>$2,615,515</td><td>$2,851,680</td><td>$2,707,573</td></tr><tr><td>Operating income</td><td>330,118</td><td>259,836</td><td>447,994</td><td>352,843</td></tr><tr><td>Income from continuing operations</td><td>153,994</td><td>105,473</td><td>222,695</td><td>163,558</td></tr><tr><td>Discontinued operations — income (loss)</td><td>-877</td><td>99</td><td>94</td><td>518</td></tr><tr><td>Net income</td><td>153,117</td><td>105,572</td><td>222,789</td><td>164,076</td></tr><tr><td>Earnings available to common shareholders</td><td>152,057</td><td>104,512</td><td>221,729</td><td>163,015</td></tr><tr><td>Earnings per share total — basic</td><td>$0.35</td><td>$0.24</td><td>$0.51</td><td>$0.36</td></tr><tr><td>Earnings per share total — diluted</td><td>0.35</td><td>0.24</td><td>0.51</td><td>0.36</td></tr></table>
Part IV Item 15 — Exhibits, Financial Statement Schedules 1. Consolidated Financial Statements: Management Report on Internal Controls — For the year ended Dec. 31, 2008. Reports of Independent Registered Public Accounting Firm — For the years ended Dec. 31, 2008, 2007 and 2006. Consolidated Statements of Income — For the three years ended Dec. 31, 2008, 2007 and 2006. Consolidated Statements of Cash Flows — For the three years ended Dec. 31, 2008, 2007 and 2006. Consolidated Balance Sheets — As of Dec. 31, 2008 and 2007.2. Schedule I — Condensed Financial Information of Registrant. Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended Dec. 31, 2008, 2007 and 2006.3. Exhibits * Indicates incorporation by reference + Executive Compensation Arrangements and Benefit Plans Covering Executive Officers and Directors
<table><tr><td>1.</td><td>Consolidated Financial Statements:</td></tr><tr><td></td><td>Management Report on Internal Controls — For the year ended Dec. 31, 2008.</td></tr><tr><td></td><td>Reports of Independent Registered Public Accounting Firm — For the years ended Dec. 31, 2008, 2007 and 2006.</td></tr><tr><td></td><td>Consolidated Statements of Income — For the three years ended Dec. 31, 2008, 2007 and 2006.</td></tr><tr><td></td><td>Consolidated Statements of Cash Flows — For the three years ended Dec. 31, 2008, 2007 and 2006.</td></tr><tr><td></td><td>Consolidated Balance Sheets — As of Dec. 31, 2008 and 2007.</td></tr><tr><td>2.</td><td>Schedule I — Condensed Financial Information of Registrant.</td></tr><tr><td></td><td>Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended Dec. 31, 2008, 2007 and 2006.</td></tr><tr><td>3.</td><td>Exhibits</td></tr></table>
Xcel Energy |
6,509.91724 | If Americas develops with the same growth rate in 2004, what will it reach in 2005? (in million) | Management’s Discussion and Analysis Institutional Client Services Our Institutional Client Services segment is comprised of: Fixed Income, Currency and Commodities Client Execution. Includes client execution activities related to making markets in interest rate products, credit products, mortgages, currencies and commodities. ‰ Interest Rate Products. Government bonds, money market instruments such as commercial paper, treasury bills, repurchase agreements and other highly liquid securities and instruments, as well as interest rate swaps, options and other derivatives. ‰ Credit Products. Investment-grade corporate securities, high-yield securities, credit derivatives, bank and bridge loans, municipal securities, emerging market and distressed debt, and trade claims. ‰ Mortgages. Commercial mortgage-related securities, loans and derivatives, residential mortgage-related securities, loans and derivatives (including U. S. government agency-issued collateralized mortgage obligations, other prime, subprime and Alt-A securities and loans), and other asset-backed securities, loans and derivatives. ‰ Currencies. Most currencies, including growth-market currencies. ‰ Commodities. Crude oil and petroleum products, natural gas, base, precious and other metals, electricity, coal, agricultural and other commodity products. Equities. Includes client execution activities related to making markets in equity products and commissions and fees from executing and clearing institutional client transactions on major stock, options and futures exchanges worldwide, as well as OTC transactions. Equities also includes our securities services business, which provides financing, securities lending and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds and foundations, and generates revenues primarily in the form of interest rate spreads or fees. The table below presents the operating results of our Institutional Client Services segment.
<table><tr><td></td><td>Year Ended December</td></tr><tr><td><i>$ in millions</i></td><td>2014</td><td>2013</td><td>2012</td></tr><tr><td>Fixed Income, Currency and Commodities Client Execution</td><td>$ 8,461</td><td>$ 8,651</td><td>$ 9,914</td></tr><tr><td>Equities client execution<sup>1</sup></td><td>2,079</td><td>2,594</td><td>3,171</td></tr><tr><td>Commissions and fees</td><td>3,153</td><td>3,103</td><td>3,053</td></tr><tr><td>Securities services</td><td>1,504</td><td>1,373</td><td>1,986</td></tr><tr><td>Total Equities</td><td>6,736</td><td>7,070</td><td>8,210</td></tr><tr><td>Total net revenues</td><td>15,197</td><td>15,721</td><td>18,124</td></tr><tr><td>Operating expenses</td><td>10,880</td><td>11,792</td><td>12,490</td></tr><tr><td>Pre-tax earnings</td><td>$ 4,317</td><td>$ 3,929</td><td>$ 5,634</td></tr></table>
Notes to consolidated financial statements JPMorgan Chase & Co. 102 JPMorgan Chase & Co. / 2004 Annual Report The following table reflects information about the Firm’s loans held for sale, principally mortgage-related:
<table><tr><td>Year ended December 31, (in millions)<sup>(a)</sup></td><td> 2004</td><td>2003</td><td>2002</td></tr><tr><td>Net gains on sales of loans held for sale</td><td>$368</td><td>$933</td><td>$754</td></tr><tr><td>Lower of cost or market adjustments</td><td>39</td><td>26</td><td>-36</td></tr></table>
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results. All other periods reflect the results of heritage JPMorgan Chase only. Impaired loans JPMorgan Chase accounts for and discloses nonaccrual loans as impaired loans and recognizes their interest income as discussed previously for nonaccrual loans. The Firm excludes from impaired loans its small-balance, homogeneous consumer loans; loans carried at fair value or the lower of cost or fair value; debt securities; and leases. The table below sets forth information about JPMorgan Chase’s impaired loans. The Firm primarily uses the discounted cash flow method for valuing impaired loans:
<table><tr><td>December 31, (in millions)</td><td> 2004</td><td>2003</td><td><sup>(a)</sup></td></tr><tr><td>Impaired loans with an allowance</td><td>$1,496</td><td>$1,597</td><td></td></tr><tr><td>Impairedloans without anallowance<sup>(b)</sup></td><td>284</td><td>406</td><td></td></tr><tr><td>Total impaired loans</td><td>$1,780</td><td>$2,003</td><td></td></tr><tr><td>Allowance for impaired loans under SFAS 114<sup>(c)</sup></td><td>$521</td><td>$595</td><td></td></tr><tr><td>Average balance of impaired loans during the year</td><td>1,883</td><td>2,969</td><td></td></tr><tr><td>Interest income recognized on impairedloans during the year</td><td>8</td><td>4</td><td></td></tr></table>
(a) Heritage JPMorgan Chase only. (b) When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under SFAS 114. (c) The allowance for impaired loans under SFAS 114 is included in JPMorgan Chase’s Allowance for loan losses. Note 12 – Allowance for credit losses JPMorgan Chase’s Allowance for loan losses covers the wholesale (primarily risk-rated) and consumer (primarily scored) loan portfolios and represents management’s estimate of probable credit losses inherent in the Firm’s loan portfolio. Management also computes an Allowance for wholesale lending-related commitments using a methodology similar to that used for the wholesale loans. As a result of the Merger, management modified its methodology for determining the Provision for credit losses for the combined Firm. The effect of conforming methodologies in 2004 was a decrease in the consumer allowance of $254 million and a decrease in the wholesale allowance (including both funded loans and lending-related commitments) of $330 million. In addition, the Bank One seller’s interest in credit card securitizations was decertificated; this resulted in an increase to the provision for loan losses of approximately $1.4 billion (pre-tax) in 2004. The Allowance for loan losses consists of two components: asset-specific loss and formula-based loss. Within the formula-based loss is a statistical calculation and an adjustment to the statistical calculation. The asset-specific loss component relates to provisions for losses on loans considered impaired and measured pursuant to SFAS 114. An allowance is established when the discounted cash flows (or collateral value or observable market price) of the loan are lower than the carrying value of that loan. To compute the asset-specific loss component of the allowance larger impaired loans are evaluated individually, and smaller impaired loans are evaluated as a pool using historical loss experience for the respective class of assets. The formula-based loss component covers performing wholesale and consumer loans and is the product of a statistical calculation, as well as adjustments to such calculation. These adjustments take into consideration model imprecision, external factors and economic events that have occurred but are not yet reflected in the factors used to derive the statistical calculation. The statistical calculation is the product of probability of default and loss given default. For risk-rated loans (generally loans originated by the wholesale lines of business), these factors are differentiated by risk rating and maturity. For scored loans (generally loans originated by the consumer lines of business), loss is primarily determined by applying statistical loss factors and other risk indicators to pools of loans by asset type. Adjustments to the statistical calculation for the risk-rated portfolios are determined by creating estimated ranges using historical experience of both loss given default and probability of default. Factors related to concentrated and deteriorating industries are also incorporated into the calculation where relevant. Adjustments to the statistical calculation for the scored loan portfolios are accomplished in part by analyzing the historical loss experience for each major product segment. The estimated ranges and the determination of the appropriate point within the range are based upon management’s view of uncertainties that relate to current macroeconomic and political conditions, quality of underwriting standards, and other relevant internal and external factors affecting the credit quality of the portfolio. The Allowance for lending-related commitments represents management’s estimate of probable credit losses inherent in the Firm’s process of extending credit. Management establishes an asset-specific allowance for lending-related commitments that are considered impaired and computes a formula-based allowance for performing wholesale lending-related commitments. These are computed using a methodology similar to that used for the wholesale loan portfolio, modified for expected maturities and probabilities of drawdown. At least quarterly, the allowance for credit losses is reviewed by the Chief Risk Officer and the Deputy Chief Risk Officer of the Firm and is discussed with a risk subgroup of the Operating Committee, relative to the risk profile of the Firm’s credit portfolio and current economic conditions. As of December 31, 2004, JPMorgan Chase deemed the allowance for credit losses to be appropriate (i. e. , sufficient to absorb losses that are inherent in the portfolio, including those not yet identifiable). Market risk–average trading and credit portfolio VAR
<table><tr><td>(in millions, except headcount and ratios)</td><td>2004</td><td>2003</td><td>2002</td></tr><tr><td> Revenue by business</td><td></td><td></td><td></td></tr><tr><td>Investment banking fees</td><td>$3,572</td><td>$2,871</td><td>$2,707</td></tr><tr><td>Fixed income markets</td><td>6,314</td><td>6,987</td><td>5,450</td></tr><tr><td>Equities markets</td><td>1,491</td><td>1,406</td><td>1,018</td></tr><tr><td>Credit portfolio</td><td>1,228</td><td>1,420</td><td>1,507</td></tr><tr><td> Total net revenue</td><td>$12,605</td><td>$12,684</td><td>$10,682</td></tr><tr><td> Revenue by region</td><td></td><td></td><td></td></tr><tr><td>Americas</td><td>$6,870</td><td>$7,250</td><td>$6,360</td></tr><tr><td>Europe/Middle East/Africa</td><td>4,082</td><td>4,331</td><td>3,215</td></tr><tr><td>Asia/Pacific</td><td>1,653</td><td>1,103</td><td>1,107</td></tr><tr><td> Total net revenue</td><td>$12,605</td><td>$12,684</td><td>$10,682</td></tr><tr><td> Selected balance sheet (average)</td><td></td><td></td><td></td></tr><tr><td>Total assets</td><td>$473,121</td><td>$436,488</td><td>$429,866</td></tr><tr><td>Tradingassets – debt and equity instruments</td><td>173,086</td><td>156,408</td><td>134,191</td></tr><tr><td>Tradingassets – derivatives receivables</td><td>58,735</td><td>83,361</td><td>70,831</td></tr><tr><td>Loans<sup>(b)</sup></td><td>42,618</td><td>45,037</td><td>55,998</td></tr><tr><td>Adjusted assets<sup>(c)</sup></td><td>393,646</td><td>370,776</td><td>359,324</td></tr><tr><td>Equity</td><td>17,290</td><td>18,350</td><td>19,134</td></tr><tr><td> Headcount</td><td>17,478</td><td>14,691</td><td>15,012</td></tr><tr><td> Credit data and quality statistics</td><td></td><td></td><td></td></tr><tr><td>Net charge-offs</td><td>$47</td><td>$680</td><td>$1,627</td></tr><tr><td>Nonperforming assets:</td><td></td><td></td><td></td></tr><tr><td>Nonperforming loans<sup>(d)(e)</sup></td><td>954</td><td>1,708</td><td>3,328</td></tr><tr><td>Other nonperforming assets</td><td>242</td><td>370</td><td>408</td></tr><tr><td>Allowance for loan losses</td><td>1,547</td><td>1,055</td><td>1,878</td></tr><tr><td>Allowance for lending related commitments</td><td>305</td><td>242</td><td>324</td></tr><tr><td>Net charge-off rate<sup>(b)</sup></td><td>0.13%</td><td>1.65%</td><td>3.15%</td></tr><tr><td>Allowance for loan losses to average loans<sup>(b)</sup></td><td>4.27</td><td>2.56</td><td>3.64</td></tr><tr><td>Allowance for loan losses to nonperforming loans<sup>(d)</sup></td><td>163</td><td>63</td><td>57</td></tr><tr><td>Nonperforming loans to average loans</td><td>2.24</td><td>3.79</td><td>5.94</td></tr><tr><td> Market risk-average trading and credit portfolio VAR</td><td></td><td></td><td></td></tr><tr><td>Trading activities:</td><td></td><td></td><td></td></tr><tr><td>Fixed income<sup>(f)</sup></td><td>$74</td><td>$61</td><td>NA</td></tr><tr><td>Foreign exchange</td><td>17</td><td>17</td><td>NA</td></tr><tr><td>Equities</td><td>28</td><td>18</td><td>NA</td></tr><tr><td>Commodities and other</td><td>9</td><td>8</td><td>NA</td></tr><tr><td>Diversification</td><td>-43</td><td>-39</td><td>NA</td></tr><tr><td> Total trading VAR</td><td>85</td><td>65</td><td>NA</td></tr><tr><td>Credit portfolio VAR<sup>(g)</sup></td><td>14</td><td>18</td><td>NA</td></tr><tr><td>Diversification</td><td>-9</td><td>-14</td><td>NA</td></tr><tr><td> Total trading and credit portfolio VAR</td><td>$90</td><td>$69</td><td>NA</td></tr></table>
(a) 2004 results include six months of the combined Firm’s results and six months of heritage JPMorgan Chase results. All other periods reflect the results of heritage JPMorgan Chase only. (b) The year-to-date average loans held for sale are $6.4 billion, $3.8 billion and $4.3 billion for 2004, 2003 and 2002, respectively. These amounts are not included in the allowance coverage ratios and net charge-off rates. The 2002 net charge-offs and net charge-off rate exclude charge-offs of $212 million taken on lending-related commitments. (c) Adjusted assets equals total average assets minus (1) securities purchased under resale agreements and securities borrowed less securities sold, not yet purchased; (2) assets of variable interest entities (VIEs) consolidated under FIN 46R; (3) cash and securities segregated and on deposit for regulatory and other purposes; and (4) goodwill and intangibles. The amount of adjusted assets is presented to assist the reader in comparing the IB’s asset and capital levels to other investment banks in the securities industry. Asset-to-equity leverage ratios are commonly used as one measure to assess a company’s capital adequacy. The IB believes an adjusted asset amount, which excludes certain assets considered to have a low risk profile, provides a more meaningful measure of balance sheet leverage in the securities industry. See Capital management on pages 50–52 of this Annual Report for a discussion of the Firm’s overall capital adequacy and capital management. (d) Nonperforming loans include loans held for sale of $2 million, $30 million and $16 million as of December 31, 2004, 2003 and 2002, respectively. These amounts are not included in the allowance coverage ratios. (e) Nonperforming loans exclude loans held for sale of $351 million, $22 million and $2 million as of December 31, 2004, 2003, and 2002, respectively, that were purchased as part of the IB’s proprietary investing activities. (f) Includes all mark-to-market trading activities, plus available-for-sale securities held for IB investing purposes. (g) Includes VAR on derivative credit valuation adjustments, credit valuation adjustment hedges and mark-to-market loan hedges, which are reported in Trading revenue. This VAR does not include the accrual loan portfolio, which is not marked to market. NA-Data for 2002 is not available on a comparable basis. According to Thomson Financial, in 2004, the Firm improved its ranking in U. S. announced M&A from #8 to #1, and Global announced M&A from #4 to #2, while increasing its market share significantly. The Firm’s U. S. initial public offerings ranking improved from #16 to #4, with the Firm moving to #6 from #4 in the U. S. Equity & Equity-related category. The Firm maintained its #1 ranking in U. S. syndicated loans, with a 32% market share, and its #3 position in Global Debt, Equity and Equity-related. Market shares and rankings(a)
<table><tr><td></td><td colspan="2"> 2004</td><td colspan="2">2003</td><td colspan="2">2002</td></tr><tr><td>December 31,</td><td>Market Share</td><td>Rankings</td><td>Market Share</td><td>Rankings</td><td>Market Share</td><td>Rankings</td></tr><tr><td>Global debt, equity and equity-related</td><td>7%</td><td> # 3</td><td>8%</td><td># 3</td><td>8%</td><td>#3</td></tr><tr><td>Global syndicated loans</td><td>20</td><td> # 1</td><td>20</td><td># 1</td><td>26</td><td>#1</td></tr><tr><td>Global long-term debt</td><td>7</td><td> # 2</td><td>8</td><td># 2</td><td>8</td><td>#2</td></tr><tr><td>Global equity and equity-related</td><td>6</td><td> # 6</td><td>8</td><td># 4</td><td>4</td><td>#8</td></tr><tr><td>Global announced M&A</td><td>26</td><td> # 2</td><td>16</td><td># 4</td><td>14</td><td>#5</td></tr><tr><td>U.S. debt, equity and equity-related</td><td>8</td><td> # 5</td><td>9</td><td># 3</td><td>10</td><td>#2</td></tr><tr><td>U.S. syndicated loans</td><td>32</td><td> # 1</td><td>35</td><td># 1</td><td>39</td><td>#1</td></tr><tr><td>U.S. long-term debt</td><td>12</td><td> # 2</td><td>10</td><td># 3</td><td>13</td><td>#2</td></tr><tr><td>U.S. equity and equity-related</td><td>8</td><td> # 6</td><td>11</td><td># 4</td><td>6</td><td>#6</td></tr><tr><td>U.S. announced M&A</td><td>33</td><td> # 1</td><td>13</td><td># 8</td><td>14</td><td>#7</td></tr></table>
Management’s discussion and analysis JPMorgan Chase & Co. 78 JPMorgan Chase & Co. / 2004 Annual Report there is little to no subjectivity in determining fair value. When observable market prices and parameters do not exist, management judgment is necessary to estimate fair value. The valuation process takes into consideration factors such as liquidity and concentration concerns and, for the derivatives portfolio, counterparty credit risk (see the discussion of CVA on page 63 of this Annual Report). For example, there is often limited market data to rely on when estimating the fair value of a large or aged position. Similarly, judgment must be applied in estimating prices for less readily observable external parameters. Finally, other factors such as model assumptions, market dislocations and unexpected correlations can affect estimates of fair value. Imprecision in estimating these factors can impact the amount of revenue or loss recorded for a particular position. Trading and available-for-sale portfolios Substantially all of the Firm’s securities held for trading and investment purposes (“long” positions) and securities that the Firm has sold to other parties but does not own (“short” positions) are valued based on quoted market prices. However, certain securities are less actively traded and, therefore, are not always able to be valued based on quoted market prices. The determination of their fair value requires management judgment, as this determination may require benchmarking to similar instruments or analyzing default and recovery rates. Examples include certain collateralized mortgage and debt obligations and high-yield debt securities. As few derivative contracts are listed on an exchange, the majority of the Firm’s derivative positions are valued using internally developed models that use as their basis readily observable market parameters – that is, parameters that are actively quoted and can be validated to external sources, including industry-pricing services. Certain derivatives, however, are valued based on models with significant unobservable market parameters – that is, parameters that may be estimated and are, therefore, subject to management judgment to substantiate the model valuation. These instruments are normally either less actively traded or trade activity is one-way. Examples include long-dated interest rate or currency swaps, where swap rates may be unobservable for longer maturities, and certain credit products, where correlation and recovery rates are unobservable. Due to the lack of observable market data, the Firm defers the initial trading profit for these financial instruments. The deferred profit is recognized in Trading revenue on a systematic basis and when observable market data becomes available. Management judgment includes recording fair value adjustments (i. e. , reductions) to model valuations to account for parameter uncertainty when valuing complex or less actively traded derivative transactions. The following table summarizes the Firm’s trading and available-for-sale portfolios by valuation methodology at December 31, 2004: |
0.61628 | what percentage of the company's receivable balances in puerto rico as of december 31 , 2017 was past due? | THE AES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2017, 2016, AND 2015 163 was dispatched starting in February 2018. AES Puerto Rico continues to be the lowest cost and EPA compliant energy provider in Puerto Rico. Therefore, we expect AES Puerto Rico to continue to be a critical supplier to PREPA. Starting prior to the hurricanes, PREPA has been facing economic challenges that could impact the Company, and on July 2, 2017, filed for bankruptcy under Title III. As a result of the bankruptcy filing, AES Puerto Rico and AES Ilumina’s non-recourse debt of $365 million and $36 million, respectively, is in default and has been classified as current as of December 31, 2017. In November 2017, AES Puerto Rico signed a Forbearance and Standstill Agreement with its lenders to prevent the lenders from taking any action against the company due to the default events. This agreement will expire on March 22, 2018. The Company's receivable balances in Puerto Rico as of December 31, 2017 totaled $86 million, of which $53 million was overdue. After the filing of Title III protection, and up until the disruption caused by the hurricanes, AES in Puerto Rico was collecting the overdue amounts from PREPA in line with historic payment patterns. Considering the information available as of the filing date, management believes the carrying amount of our assets in Puerto Rico of $627 million is recoverable as of December 31, 2017 and no reserve on the receivables is required. Foreign Currency Risks — AES operates businesses in many foreign countries and such operations could be impacted by significant fluctuations in foreign currency exchange rates. Fluctuations in currency exchange rate between U. S. dollar and the following currencies could create significant fluctuations in earnings and cash flows: the Argentine peso, the Brazilian real, the Dominican Republic peso, the Euro, the Chilean peso, the Colombian peso, and the Philippine peso. Concentrations — Due to the geographical diversity of its operations, the Company does not have any significant concentration of customers or sources of fuel supply. Several of the Company's generation businesses rely on PPAs with one or a limited number of customers for the majority of, and in some cases all of, the relevant businesses' output over the term of the PPAs. However, no single customer accounted for 10% or more of total revenue in 2017, 2016 or 2015. The cash flows and results of operations of our businesses depend on the credit quality of our customers and the continued ability of our customers and suppliers to meet their obligations under PPAs and fuel supply agreements. If a substantial portion of the Company's long-term PPAs and/or fuel supply were modified or terminated, the Company would be adversely affected to the extent that it would be unable to replace such contracts at equally favorable terms.26. RELATED PARTY TRANSACTIONS Certain of our businesses in Panama and the Dominican Republic are partially owned by governments either directly or through state-owned institutions. In the ordinary course of business, these businesses enter into energy purchase and sale transactions, and transmission agreements with other state-owned institutions which are controlled by such governments. At two of our generation businesses in Mexico, the offtakers exercise significant influence, but not control, through representation on these businesses' Boards of Directors. These offtakers are also required to hold a nominal ownership interest in such businesses. In Chile, we provide capacity and energy under contractual arrangements to our investment which is accounted for under the equity method of accounting. Additionally, the Company provides certain support and management services to several of its affiliates under various agreements. The Company's Consolidated Statements of Operations included the following transactions with related parties for the periods indicated (in millions):
<table><tr><td>Years Ended December 31,</td><td>2017</td><td>2016</td><td>2015</td></tr><tr><td>Revenue—Non-Regulated</td><td>$1,297</td><td>$1,100</td><td>$1,099</td></tr><tr><td>Cost of Sales—Non-Regulated</td><td>220</td><td>210</td><td>330</td></tr><tr><td>Interest income</td><td>8</td><td>4</td><td>25</td></tr><tr><td>Interest expense</td><td>36</td><td>39</td><td>33</td></tr></table>
Principal Financial Group, Inc. Notes to Consolidated Financial Statements — (continued) 1. Nature of Operations and Significant Accounting Policies — (continued) revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing DPAC, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing DPAC, sales inducement costs or unearned revenue balance associated with the replaced contract is not written off, but instead is carried over to the new contract. Long-Term Debt Long-term debt includes notes payable, nonrecourse mortgages and other debt with a maturity date greater than one year at the date of issuance. Current maturities of long-term debt are classified as long-term debt in our statement of financial position. Reinsurance We enter into reinsurance agreements with other companies in the normal course of business. We may assume reinsurance from or cede reinsurance to other companies. Assets and liabilities related to reinsurance ceded are reported on a gross basis. Premiums and expenses are reported net of reinsurance ceded. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. At December 31, 2009 and 2008, our largest exposures to a single third-party reinsurer in our individual life insurance business was $22.0 billion and $18.5 billion of life insurance in force, representing 14% and 11% of total net individual life insurance in force, respectively. The financial statement exposure is limited to the reinsurance recoverable related to this single third party reinsurer, which was $26.8 million and $18.1 million at December 31, 2009 and 2008, respectively. The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows:
<table><tr><td></td><td colspan="3">For the year ended December 31,</td></tr><tr><td></td><td>2009</td><td>2008</td><td>2007</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>Premiums and other considerations:</td><td></td><td></td><td></td></tr><tr><td>Direct</td><td>$4,047.6</td><td>$4,495.1</td><td>$4,751.3</td></tr><tr><td>Assumed</td><td>5.2</td><td>9.7</td><td>160.0</td></tr><tr><td>Ceded</td><td>-302.2</td><td>-295.6</td><td>-277.2</td></tr><tr><td>Net premiums and other considerations</td><td>$3,750.6</td><td>$4,209.2</td><td>$4,634.1</td></tr><tr><td>Benefits, claims and settlement expenses:</td><td></td><td></td><td></td></tr><tr><td>Direct</td><td>$5,564.5</td><td>$6,440.8</td><td>$6,489.7</td></tr><tr><td>Assumed</td><td>38.9</td><td>43.5</td><td>190.4</td></tr><tr><td>Ceded</td><td>-268.9</td><td>-264.4</td><td>-244.8</td></tr><tr><td>Net benefits, claims and settlement expenses</td><td>$5,334.5</td><td>$6,219.9</td><td>$6,435.3</td></tr></table>
Separate Accounts The separate account assets presented in the consolidated financial statements represent the fair market value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments. The separate account contract owner, rather than us, bears the investment risk of these funds. The separate account assets are legally segregated and are not subject to claims that arise out of any of our other business. We receive fees for mortality, withdrawal, and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses on the separate accounts are not reflected in the consolidated statements of operations. At December 31, 2009 and 2008, the separate accounts include a separate account valued at $191.5 million and $207.4 million, respectively, which primarily includes shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability to eligible participants of the qualified plan. Changes in fair Principal Financial Group, Inc. Notes to Consolidated Financial Statements — (continued) 12. Employee and Agent Benefits — (continued) Estimated Future Benefit Payments The estimated future benefit payments, which reflect expected future service, and the expected amount of tax-free subsidy receipts under Medicare Part D are:
<table><tr><td> </td><td> Pension benefits</td><td> Other postretirement benefits (gross benefit payments, including prescription drug benefits)</td><td> Amount of Medicare Part D subsidy receipts</td></tr><tr><td> </td><td colspan="3"><i>(in millions)</i> </td></tr><tr><td>Year ending December 31:</td><td></td><td></td><td></td></tr><tr><td>2010</td><td>$71.9</td><td>$23.7</td><td>$1.1</td></tr><tr><td>2011</td><td>75.9</td><td>25.8</td><td>1.2</td></tr><tr><td>2012</td><td>81.5</td><td>28.1</td><td>1.5</td></tr><tr><td>2013</td><td>87.1</td><td>30.7</td><td>1.6</td></tr><tr><td>2014</td><td>93.4</td><td>33.5</td><td>1.9</td></tr><tr><td>2015-2019</td><td>559.2</td><td>217.7</td><td>13.5</td></tr></table>
The above table reflects the total estimated future benefits to be paid from the plan, including both our share of the benefit cost and the participants’ share of the cost, which is funded by their contributions to the plan. The assumptions used in calculating the estimated future benefit payments are the same as those used to measure the benefit obligation for the year ended December 31, 2009. The information that follows shows supplemental information for our defined benefit pension plans. Certain key summary data is shown separately for qualified and non-qualified plans.
<table><tr><td> </td><td colspan="6">For the year ended December 31,</td></tr><tr><td> </td><td colspan="3">2009</td><td colspan="3">2008</td></tr><tr><td> </td><td>Qualified plan</td><td>Nonqualified plans</td><td>Total</td><td>Qualified plan</td><td>Nonqualified plans</td><td>Total</td></tr><tr><td> </td><td colspan="6">(in millions)</td></tr><tr><td> Amount recognized in statement of financial position</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Other assets</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td><td>$—</td></tr><tr><td>Other liabilities</td><td>-249.9</td><td>-297.2</td><td>-547.1</td><td>-399.1</td><td>-302.5</td><td>-701.6</td></tr><tr><td>Total</td><td>$-249.9</td><td>$-297.2</td><td>$-547.1</td><td>$-399.1</td><td>$-302.5</td><td>$-701.6</td></tr><tr><td> Amount recognized in accumulated other comprehensive loss</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Total net actuarial loss</td><td>$495.0</td><td>$69.9</td><td>$564.9</td><td>$690.3</td><td>$77.9</td><td>$768.2</td></tr><tr><td>Prior service cost benefit</td><td>-33.9</td><td>-18.8</td><td>-52.7</td><td>-28.6</td><td>-10.9</td><td>-39.5</td></tr><tr><td>Total pre-tax accumulated other comprehensive loss</td><td>$461.1</td><td>$51.1</td><td>$512.2</td><td>$661.7</td><td>$67.0</td><td>$728.7</td></tr><tr><td> Components of net periodic benefit cost</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Service cost</td><td>$41.8</td><td>$9.6</td><td>$51.4</td><td>$50.5</td><td>$11.5</td><td>$62.0</td></tr><tr><td>Interest cost</td><td>83.0</td><td>17.8</td><td>100.8</td><td>100.2</td><td>24.1</td><td>124.3</td></tr><tr><td>Expected return on plan assets</td><td>-79.5</td><td>—</td><td>-79.5</td><td>-162.8</td><td>—</td><td>-162.8</td></tr><tr><td>Amortization of prior service cost benefit</td><td>-5.4</td><td>-2.3</td><td>-7.7</td><td>-6.7</td><td>-2.9</td><td>-9.6</td></tr><tr><td>Recognized net actuarial (gain) loss</td><td>86.5</td><td>6.1</td><td>92.6</td><td>-9.4</td><td>10.9</td><td>1.5</td></tr><tr><td>Net periodic benefit cost (income)</td><td>$126.4</td><td>$31.2</td><td>$157.6</td><td>$-28.2</td><td>$43.6</td><td>$15.4</td></tr><tr><td> Other changes recognized in accumulated other comprehensive (income) loss</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net actuarial (gain) loss</td><td>$-108.8</td><td>$-1.9</td><td>$-110.7</td><td>$740.6</td><td>$-13.4</td><td>$727.2</td></tr><tr><td>Prior service benefit</td><td>-10.7</td><td>-10.2</td><td>-20.9</td><td>—</td><td>—</td><td>—</td></tr><tr><td>Amortization of net gain (loss)</td><td>-86.5</td><td>-6.1</td><td>-92.6</td><td>9.4</td><td>-10.9</td><td>-1.5</td></tr><tr><td>Amortization of prior service cost benefit</td><td>5.4</td><td>2.3</td><td>7.7</td><td>6.7</td><td>2.9</td><td>9.6</td></tr><tr><td>Total recognized in pre-tax accumulated other comprehensive (income) loss</td><td>$-200.6</td><td>$-15.9</td><td>$-216.5</td><td>$756.7</td><td>$-21.4</td><td>$735.3</td></tr><tr><td> Total recognized in net periodic benefit cost and pre-tax accumulated other comprehensive (income) loss</td><td>$-74.2</td><td>$15.3</td><td>$-58.9</td><td>$728.5</td><td>$22.2</td><td>$750.7</td></tr></table>
In addition, we have defined contribution plans that are generally available to all U. S. employees and agents. Eligible participants could not contribute more than $16,500 of their compensation to the plans in 2009. Effective January 1, 2006, we made several changes to the retirement programs. In general, the pension and supplemental executive retirement plan benefit formulas were reduced, and the 401(k) matching contribution was increased. Employees who were ages 47 or |
469.3 | What's the total amount of the Diluted: Weighted-average common shares outstanding for Denominator in the years where Total revenues for Revenues is greater than 0? (in million) | Certain property fund limited partnerships that the Company consolidates have floating rate revolving credit borrowings of $381 million as of December 31, 2009. Certain Threadneedle subsidiaries guarantee the repayment of outstanding borrowings up to the value of the assets of the partnerships. The debt is secured by the assets of the partnerships and there is no recourse to Ameriprise Financial.24. Earnings per Share Attributable to Ameriprise Financial Common Shareholders The computations of basic and diluted earnings (loss) per share attributable to Ameriprise Financial common shareholders are as follows:
<table><tr><td> </td><td colspan="3"> Years Ended December 31,</td></tr><tr><td> </td><td> 2009</td><td>2008</td><td> 2007</td></tr><tr><td> </td><td colspan="3"> (in millions, except per share amounts) </td></tr><tr><td> Numerator:</td><td></td><td></td><td></td></tr><tr><td>Net income (loss) attributable to Ameriprise Financial</td><td>$722</td><td>$-38</td><td>$814</td></tr><tr><td> Denominator:</td><td></td><td></td><td></td></tr><tr><td>Basic: Weighted-average common shares outstanding</td><td>242.2</td><td>222.3</td><td>236.2</td></tr><tr><td>Effect of potentially dilutive nonqualified stock options and other share-based awards</td><td>2.2</td><td>2.6</td><td>3.7</td></tr><tr><td>Diluted: Weighted-average common shares outstanding</td><td>244.4</td><td>224.9</td><td>239.9</td></tr><tr><td> Earnings (loss) per share attributable to Ameriprise Financial common shareholders:</td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>$2.98</td><td>$-0.17</td><td>$3.45</td></tr><tr><td>Diluted</td><td>$2.95</td><td>$-0.17 (1)</td><td>$3.39</td></tr></table>
(1) Diluted shares used in this calculation represent basic shares due to the net loss. Using actual diluted shares would result in anti-dilution. Basic weighted average common shares for the years ended December 31, 2009, 2008 and 2007 included 3.4 million, 2.1 million and 1.6 million, respectively, of vested, nonforfeitable restricted stock units and 4.6 million, 3.1 million and 3.5 million, respectively, of non-vested restricted stock awards and restricted stock units that are forfeitable but receive nonforfeitable dividends. Potentially dilutive securities include nonqualified stock options and other share-based awards.25. Shareholders’ Equity The Company has a share repurchase program in place to return excess capital to shareholders. Since September 2008 through the date of this report, the Company has suspended its stock repurchase program; as a result there were no share repurchases during the year ended December 31, 2009. During the years ended December 31, 2008 and 2007, the Company repurchased a total of 12.7 million and 15.9 million shares, respectively, of its common stock at an average price of $48.26 and $59.59, respectively. As of December 31, 2009, the Company had approximately $1.3 billion remaining under a share repurchase authorization. The Company may also reacquire shares of its common stock under its 2005 ICP and 2008 Plan related to restricted stock awards. Restricted shares that are forfeited before the vesting period has lapsed are recorded as treasury shares. In addition, the holders of restricted shares may elect to surrender a portion of their shares on the vesting date to cover their income tax obligations. These vested restricted shares reacquired by the Company and the Company’s payment of the holders’ income tax obligations are recorded as a treasury share purchase. The restricted shares forfeited and recorded as treasury shares under the 2005 ICP and 2008 Plan were 0.3 million shares in each of the years ended December 31, 2009, 2008 and 2007. For each of the years ended December 31, 2009, 2008 and 2007, the Company reacquired 0.5 million of its common stock through the surrender of restricted shares upon vesting and paid in the aggregate $11 million, $24 million and $29 million, respectively, related to the holders’ income tax obligations on the vesting date. In 2009, the Company issued and sold 36 million shares of its common stock. The proceeds of $869 million will be used for general corporate purposes, including the Company’s pending acquisition of the long-term asset management business of Columbia, which is expected to close in the spring of 2010. See Note 5 for additional information on the Company’s pending acquisition of Columbia. In 2008, the Company reissued 1.8 million treasury shares for restricted stock award grants and the issuance of shares vested under the P2 Deferral Plan and the Transition and Opportunity Bonus (‘‘T&O Bonus’’) program. In 2005, the Company awarded bonuses to advisors General and administrative expense decreased $15 million, or 7%, to $192 million for the year ended December 31, 2009, primarily due to expense controls. Protection Our Protection segment offers a variety of protection products to address the protection and risk management needs of our retail clients including life, disability income and property-casualty insurance. Life and disability income products are primarily distributed through our branded advisors. Our property-casualty products are sold direct, primarily through affinity relationships. We issue insurance policies through our life insurance subsidiaries and the property casualty companies. The primary sources of revenues for this segment are premiums, fees, and charges that we receive to assume insurance-related risk. We earn net investment income on owned assets supporting insurance reserves and capital supporting the business. We also receive fees based on the level of assets supporting variable universal life separate account balances. This segment earns intersegment revenues from fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource VST Funds under the variable universal life contracts. Intersegment expenses for this segment include distribution expenses for services provided by the Advice & Wealth Management segment, as well as expenses for investment management services provided by the Asset Management segment. The following table presents the results of operations of our Protection segment:
<table><tr><td> </td><td colspan="2"> Years Ended December 31,</td><td></td><td></td></tr><tr><td> </td><td> 2009</td><td> 2008</td><td colspan="2">Change</td></tr><tr><td> </td><td colspan="4">(in millions, except percentages)</td></tr><tr><td> Revenues</td><td></td><td></td><td></td><td></td></tr><tr><td>Management and financial advice fees</td><td>$47</td><td>$56</td><td>$-9</td><td>-16%</td></tr><tr><td>Distribution fees</td><td>97</td><td>106</td><td>-9</td><td>-8</td></tr><tr><td>Net investment income</td><td>422</td><td>252</td><td>170</td><td>67</td></tr><tr><td>Premiums</td><td>1,020</td><td>994</td><td>26</td><td>3</td></tr><tr><td>Other revenues</td><td>386</td><td>547</td><td>-161</td><td>-29</td></tr><tr><td>Total revenues</td><td>1,972</td><td>1,955</td><td>17</td><td>1</td></tr><tr><td>Banking and deposit interest expense</td><td>1</td><td>1</td><td>—</td><td>—</td></tr><tr><td>Total net revenues</td><td>1,971</td><td>1,954</td><td>17</td><td>1</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td></tr><tr><td>Distribution expenses</td><td>22</td><td>18</td><td>4</td><td>22</td></tr><tr><td>Interest credited to fixed accounts</td><td>144</td><td>144</td><td>—</td><td>—</td></tr><tr><td>Benefits, claims, losses and settlement expenses</td><td>924</td><td>856</td><td>68</td><td>8</td></tr><tr><td>Amortization of deferred acquisition costs</td><td>159</td><td>333</td><td>-174</td><td>-52</td></tr><tr><td>General and administrative expense</td><td>226</td><td>251</td><td>-25</td><td>-10</td></tr><tr><td>Total expenses</td><td>1,475</td><td>1,602</td><td>-127</td><td>-8</td></tr><tr><td>Pretax income</td><td>$496</td><td>$352</td><td>$144</td><td>41%</td></tr></table>
Our Protection segment pretax income was $496 million for 2009, an increase of $144 million, or 41%, from $352 million in 2008. Net revenues Net revenues increased $17 million, or 1%, to $2.0 billion for the year ended December 31, 2009, due to an increase in net investment income and premiums, partially offset by a decrease in other revenues related to updating valuation assumptions. Net investment income increased $170 million, or 67%, to $422 million for the year ended December 31, 2009, primarily due to net realized investment gains of $27 million in 2009 compared to net realized investment losses of $92 million in the prior year primarily related to impairments of Available-for-Sale securities. In addition, investment income earned on fixed maturity securities increased $46 million compared to the prior year driven by higher yields on the longer-term investments in our fixed income investment portfolio. In December, our board of directors ratified its authorization of a stock repurchase program in the amount of 1.5 million shares of our common stock. As of December 31, 2010 no shares had been repurchased. We have paid dividends for 71 consecutive years with payments increasing each of the last 19 years. We paid total dividends of $.54 per share in 2010 compared with $.51 per share in 2009. Aggregate Contractual Obligations A summary of our contractual obligations as of December 31, 2010, is as follows:
<table><tr><td>(dollars in millions)</td><td>Payments due by period</td></tr><tr><td>Contractual Obligations</td><td>Total</td><td>Less Than1 year</td><td>1 - 3Years</td><td>3 - 5Years</td><td>More than5 years</td></tr><tr><td>Long-term Debt</td><td>$261.0</td><td>$18.6</td><td>$181.2</td><td>$29.2</td><td>$32.0</td></tr><tr><td>Fixed Rate Interest</td><td>22.4</td><td>6.1</td><td>9.0</td><td>5.1</td><td>2.2</td></tr><tr><td>Operating Leases</td><td>30.2</td><td>7.2</td><td>7.9</td><td>5.4</td><td>9.7</td></tr><tr><td>Purchase Obligations</td><td>45.5</td><td>45.5</td><td>-</td><td>-</td><td>-</td></tr><tr><td>Total</td><td>$359.1</td><td>$77.4</td><td>$198.1</td><td>$39.7</td><td>$43.9</td></tr></table>
As of December 31, 2010, the liability for uncertain income tax positions was $2.7 million. Due to the high degree of uncertainty regarding timing of potential future cash flows associated with these liabilities, we are unable to make a reasonably reliable estimate of the amount and period in which these liabilities might be paid. We utilize blanket purchase orders to communicate expected annual requirements to many of our suppliers. Requirements under blanket purchase orders generally do not become committed until several weeks prior to the company’s scheduled unit production. The purchase obligation amount presented above represents the value of commitments considered firm. RESULTS OF OPERATIONS Our sales from continuing operations in 2010 were $1,489.3 million surpassing 2009 sales of $1,375.0 million by 8.3 percent. The increase in sales was due mostly to significantly higher sales in our water heater operations in China resulting from geographic expansion, market share gains and new product introductions as well as additional sales from our water treatment business acquired in November, 2009. Our sales from continuing operations were $1,451.3 million in 2008. The $76.3 million decline in sales from 2008 to 2009 was due to lower residential and commercial volume in North America, reflecting softness in the domestic housing market and a slowdown in the commercial water heater business and was partially offset by strong growth in water heater sales in China and improved year over year pricing. On December 13, 2010 we entered into a definitive agreement to sell our Electrical Products Company to Regal Beloit Corporation for $700 million in cash and approximately 2.83 million shares of Regal Beloit common stock. The transaction, which has been approved by both companies' board of directors, is expected to close in the first half of 2011. Due to the pending sale, our Electrical Products segment has been accorded discontinued operations treatment in the accompanying financial statements. Sales in 2010, including sales of $701.8 million for our Electrical Products segment, were $2,191.1 million. Our gross profit margin for continuing operations in 2010 was 29.9 percent, compared with 28.7 percent in 2009 and 25.8 percent in 2008. The improvement in margin from 2009 to 2010 was due to increased volume, cost containment activities and lower warranty costs which more than offset certain inefficiencies resulting from the May flood in our Ashland City, TN water heater manufacturing facility. The increase in profit margin from 2008 to 2009 resulted from increased higher margin China water heater volume, aggressive cost reduction programs and lower material costs. Selling, general and administrative expense (SG&A) was $36.9 million higher in 2010 than in 2009. The increased SG&A, the majority of which was incurred in our China water heater operation, was associated with selling costs to support higher volume and new product lines. Additional SG&A associated with our 2009 water treatment acquisition also contributed to the increase. SG&A was $8.5 million higher in 2009 than 2008 resulting mostly from an $8.2 million increase in our China water heater operation in support of higher volumes. |
3,730.66667 | What's the average of US SBU in 2014, 2013, and 2012? (in million) | The contracts were valued as of April 1, 2002, and an asset and a corresponding gain of $127 million, net of income taxes, was recorded as a cumulative effect of a change in accounting principle in the second quarter of 2002. The majority of the gain recorded relates to the Warrior Run contract, as the asset value of the Deepwater contract on April 1, 2002, was less than $1 million. The Warrior Run contract qualifies and was designated as a cash flow hedge as defined by SFAS No.133 and hedge accounting is applied for this contract subsequent to April 1, 2002. The contract valuations were performed using current forward electricity and gas price quotes and current market data for other contract variables. The forward curves used to value the contracts include certain assumptions, including projections of future electricity and gas prices in periods where future prices are not quoted. Fluctuations in market prices and their impact on the assumptions will cause the value of these contracts to change. Such fluctuations will increase the volatility of the Company’s reported results of operations.11. COMMITMENTS, CONTINGENCIES AND RISKS OPERATING LEASES—As of December 31, 2002, the Company was obligated under long-term non-cancelable operating leases, primarily for office rental and site leases. Rental expense for operating leases, excluding amounts related to the sale/leaseback discussed below, was $31 million $32 million and $13 million in the years ended December 31, 2002, 2001and 2000, respectively, including commitments of businesses classified as discontinued amounting to $6 million in 2002, $16 million in 2001 and $6 million in 2000. The future minimum lease commitments under these leases are as follows (in millions):
<table><tr><td></td><td>Total</td><td>Discontinued Operations</td></tr><tr><td>2003</td><td>$30</td><td>$4</td></tr><tr><td>2004</td><td>20</td><td>4</td></tr><tr><td>2005</td><td>15</td><td>3</td></tr><tr><td>2006</td><td>11</td><td>1</td></tr><tr><td>2007</td><td>9</td><td>1</td></tr><tr><td>Thereafter</td><td>84</td><td>1</td></tr><tr><td>Total</td><td>$169</td><td>$14</td></tr></table>
SALE/LEASEBACK—In May 1999, a subsidiary of the Company acquired six electric generating stations from New York State Electric and Gas (‘‘NYSEG’’). Concurrently, the subsidiary sold two of the plants to an unrelated third party for $666 million and simultaneously entered into a leasing arrangement with the unrelated party. This transaction has been accounted for as a sale/leaseback with operating lease treatment. Rental expense was $54 million, $58 million and $54 million in 2002, 2001 and 2000, respectively. Future minimum lease commitments are as follows (in millions): In connection with the lease of the two power plants, the subsidiary is required to maintain a rent reserve account equal to the maximum semi-annual payment with respect to the sum of the basic rent (other then deferrable basic rent) and fixed charges expected to become due in the immediately succeeding three-year period. At December 31, 2002, 2001 and 2000, the amount deposited in the rent reserve account approximated The estimated fair values of the Company’s debt and derivative financial instruments as of December 31, 2002 and 2001 are as follows (in millions):
<table><tr><td> </td><td colspan="2"> December 31, 2002</td><td colspan="2"> December 31, 2001</td></tr><tr><td> </td><td> Carrying Amount</td><td> Fair Value</td><td> Carrying Amount</td><td> Fair Value</td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td></tr><tr><td>Foreign currency forwards and swaps, net</td><td>$17</td><td>$17</td><td>$14</td><td>$14</td></tr><tr><td>Energy derivatives, net</td><td>201</td><td>201</td><td>7</td><td>7</td></tr><tr><td> Liabilities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Non-recourse debt</td><td>17,658</td><td>20,447</td><td>16,857</td><td>17,064</td></tr><tr><td>Recourse debt</td><td>5,804</td><td>3,895</td><td>5,401</td><td>4,730</td></tr><tr><td>Tecons</td><td>978</td><td>284</td><td>978</td><td>626</td></tr><tr><td>Interest rate swaps</td><td>557</td><td>557</td><td>166</td><td>166</td></tr><tr><td>Interest rate caps and floors, net</td><td>115</td><td>115</td><td>72</td><td>72</td></tr></table>
Amounts in the table above include the carrying amount and fair value of financial instruments of discontinued operations and assets held for sale, except for preferred stock with mandatory redemption of one of our discontinued operations that has a carrying amount of $22 million. As of December 31, 2002, discontinued operations and assets held for sale had non-recourse debt with a carrying amount and fair value of $3,415 million and $4,994 million, respectively, foreign currency forwards and swaps, net (assets), with a carrying amount and fair value of $13 million, interest rate swaps (liabilities) with a carrying amount and fair value of $103 million and interest rate caps and floors, net (liabilities), with a carrying amount and fair value of $43 million. The fair value estimates presented herein are based on pertinent information as of December 31, 2002 and 2001. The Company is not aware of any factors that would significantly affect the estimated fair value amounts since December 31, 2002.21. NEW ACCOUNTING PRONOUNCEMENTS Asset retirement obligations. In June 2001, the Financial Accounting Standards Board issued SFAS No.143, ‘‘Accounting for Asset Retirement Obligations. ’’ SFAS No.143, which is effective January 1, 2003, requires entities to record the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred. When a new liability is recorded beginning in 2003, the entity will capitalize the costs of the liability by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The Company will adopt SFAS No.143 effective January 1, 2003. The Company has completed a detailed assessment of the specific applicability and implications of SFAS No.143. The scope of SFAS No.143 includes primarily active ash landfills, water treatment basins and the removal or dismantlement of certain plant and equipment. As of December 31, 2002, the Company had a recorded liability of approximately $15 million related to asset retirement obligations. Upon adoption of SFAS No.143, the Company will record an additional liability of approximately $13 million, a net asset of approximately $9 million, and a cumulative effect of a change in accounting principle of approximately $2 million, after income taxes. Proforma net (loss) income and (loss) earnings per share have not been presented for the years ended December 31, 2002, 2001 and 2000 because the proforma application of SFAS No.143 to prior periods would result in proforma net (loss) income and (loss) earnings per share not materially different from the actual amounts reported for those periods in the accompanying consolidated statements of operations. Review of Consolidated Results of Operations
<table><tr><td></td><td colspan="3">Years Ended December 31,</td><td></td><td></td></tr><tr><td>Results of operations</td><td>2014</td><td>2013</td><td>2012</td><td>% change 2014 vs. 2013</td><td>% change 2013 vs. 2012</td></tr><tr><td></td><td colspan="3">(in millions, except per share amounts)</td><td></td><td></td></tr><tr><td>Revenue:</td><td colspan="4"></td><td></td></tr><tr><td>US SBU</td><td>$3,826</td><td>$3,630</td><td>$3,736</td><td>5%</td><td>-3%</td></tr><tr><td>Andes SBU</td><td>2,642</td><td>2,639</td><td>3,020</td><td>—%</td><td>-13%</td></tr><tr><td>Brazil SBU</td><td>6,009</td><td>5,015</td><td>5,788</td><td>20%</td><td>-13%</td></tr><tr><td>MCAC SBU</td><td>2,682</td><td>2,713</td><td>2,573</td><td>-1%</td><td>5%</td></tr><tr><td>Europe SBU</td><td>1,439</td><td>1,347</td><td>1,344</td><td>7%</td><td>—%</td></tr><tr><td>Asia SBU</td><td>558</td><td>550</td><td>733</td><td>1%</td><td>-25%</td></tr><tr><td>Corporate and Other</td><td>15</td><td>7</td><td>9</td><td>114%</td><td>-22%</td></tr><tr><td>Intersegment eliminations</td><td>-25</td><td>-10</td><td>-39</td><td>-150%</td><td>74%</td></tr><tr><td>Total Revenue</td><td>17,146</td><td>15,891</td><td>17,164</td><td>8%</td><td>-7%</td></tr><tr><td>Operating Margin:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>US SBU</td><td>699</td><td>668</td><td>711</td><td>5%</td><td>-6%</td></tr><tr><td>Andes SBU</td><td>587</td><td>533</td><td>580</td><td>10%</td><td>-8%</td></tr><tr><td>Brazil SBU</td><td>742</td><td>871</td><td>969</td><td>-15%</td><td>-10%</td></tr><tr><td>MCAC SBU</td><td>541</td><td>543</td><td>560</td><td>—%</td><td>-3%</td></tr><tr><td>Europe SBU</td><td>403</td><td>415</td><td>504</td><td>-3%</td><td>-18%</td></tr><tr><td>Asia SBU</td><td>76</td><td>169</td><td>236</td><td>-55%</td><td>-28%</td></tr><tr><td>Corporate and Other</td><td>53</td><td>25</td><td>-15</td><td>112%</td><td>267%</td></tr><tr><td>Intersegment eliminations</td><td>-13</td><td>23</td><td>38</td><td>-157%</td><td>-39%</td></tr><tr><td>Total Operating Margin</td><td>3,088</td><td>3,247</td><td>3,583</td><td>-5%</td><td>-9%</td></tr><tr><td>General and administrative expenses</td><td>-187</td><td>-220</td><td>-274</td><td>15%</td><td>20%</td></tr><tr><td>Interest expense</td><td>-1,471</td><td>-1,482</td><td>-1,544</td><td>1%</td><td>4%</td></tr><tr><td>Interest income</td><td>365</td><td>275</td><td>348</td><td>33%</td><td>-21%</td></tr><tr><td>Loss on extinguishment of debt</td><td>-261</td><td>-229</td><td>-8</td><td>-14%</td><td>NM</td></tr><tr><td>Other expense</td><td>-68</td><td>-76</td><td>-82</td><td>11%</td><td>7%</td></tr><tr><td>Other income</td><td>124</td><td>125</td><td>98</td><td>-1%</td><td>28%</td></tr><tr><td>Gain on disposal and sale of investments</td><td>358</td><td>26</td><td>219</td><td>NM</td><td>-88%</td></tr><tr><td>Goodwill impairment expense</td><td>-164</td><td>-372</td><td>-1,817</td><td>56%</td><td>80%</td></tr><tr><td>Asset impairment expense</td><td>-91</td><td>-95</td><td>-73</td><td>4%</td><td>-30%</td></tr><tr><td>Foreign currency transaction gains (losses)</td><td>11</td><td>-22</td><td>-170</td><td>150%</td><td>87%</td></tr><tr><td>Other non-operating expense</td><td>-128</td><td>-129</td><td>-50</td><td>1%</td><td>-158%</td></tr><tr><td>Income tax expense</td><td>-419</td><td>-343</td><td>-685</td><td>-22%</td><td>50%</td></tr><tr><td>Net equity in earnings of affiliates</td><td>19</td><td>25</td><td>35</td><td>-24%</td><td>-29%</td></tr><tr><td>INCOME (LOSS) FROM CONTINUING OPERATIONS</td><td>1,176</td><td>730</td><td>-420</td><td>61%</td><td>274%</td></tr><tr><td>Income (loss) from operations of discontinued businesses</td><td>27</td><td>-27</td><td>47</td><td>200%</td><td>-157%</td></tr><tr><td>Net gain (loss) from disposal and impairments of discontinued operations</td><td>-56</td><td>-152</td><td>16</td><td>63%</td><td>NM</td></tr><tr><td>NET INCOME (LOSS)</td><td>1,147</td><td>551</td><td>-357</td><td>108%</td><td>254%</td></tr><tr><td>Noncontrolling interests:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>(Income) from continuing operations attributable to noncontrolling interests</td><td>-387</td><td>-446</td><td>-540</td><td>13%</td><td>17%</td></tr><tr><td>(Income) loss from discontinued operations attributable to noncontrolling interests</td><td>9</td><td>9</td><td>-15</td><td>—%</td><td>160%</td></tr><tr><td>Net income (loss) attributable to The AES Corporation</td><td>$769</td><td>$114</td><td>$-912</td><td>575%</td><td>113%</td></tr><tr><td>AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Income (loss) from continuing operations, net of tax</td><td>$789</td><td>$284</td><td>$-960</td><td>178%</td><td>130%</td></tr><tr><td>Income (loss) from discontinued operations, net of tax</td><td>-20</td><td>-170</td><td>48</td><td>88%</td><td>-454%</td></tr><tr><td>Net income (loss)</td><td>$769</td><td>$114</td><td>$-912</td><td>575%</td><td>113%</td></tr><tr><td>Net cash provided by operating activities</td><td>$1,791</td><td>$2,715</td><td>$2,901</td><td>-34%</td><td>-6%</td></tr><tr><td>DIVIDENDS DECLARED PER COMMON SHARE</td><td>$0.25</td><td>$0.17</td><td>$0.08</td><td>47%</td><td>113%</td></tr></table>
Components of Revenue, Cost of Sales and Operating Margin—Revenue includes revenue earned from the sale of energy from our utilities and the production of energy from our generation plants, which are classified as regulated and non-regulated on the Consolidated Statements of Operations, respectively. Revenue also includes the gains or losses on derivatives associated with the sale of electricity. Cost of sales includes costs incurred directly by the businesses in the ordinary course of business. Examples include electricity and fuel purchases, O&M costs, depreciation and amortization expense, bad debt expense and recoveries, general administrative and support costs (including employee-related costs directly associated with the operations of the business). Cost of sales also includes the gains or losses on derivatives (including embedded derivatives other than foreign currency embedded derivatives) associated with the purchase of electricity or fuel. Operating margin is defined as revenue less cost of sales. In March 2013, the Secretariat of Energy released Resolution 95/2013, which affects the remuneration of generators whose sales prices had been frozen since 2003. This regulation is applicable to generation companies with certain exceptions. It defined a compensation system based on compensating for fixed costs, non-fuel variable costs and an additional margin. Resolution 95/2013 converted the Argentine electric market to an "average cost" compensation scheme. Thermal units must achieve an availability target, which varies by technology, in order to receive full fixed cost revenues. The Resolution also established that all fuels, except coal, are to be provided by CAMMESA. Thermoelectric natural gas plants not affected by the Resolution, such as TermoAndes, are able to purchase gas directly from the producers for Energy Plus sales. In May 2014, the Argentine government passed Resolution No.529/214 ("Resolution 529") which retroactively updated the prices of Resolution 95/2013 to February 1, 2014, changed target availability and added a remuneration for non-periodic maintenance. This remuneration is aimed to cover the expenses that the generator incurs when performing major maintenances in its units. Since 2014, this resolution has been updated annually, the most recent of which was issued in March 2016. On February 2, 2017, the Ministry of Energy issued Resolution 19/2017 establishing changes to the Energia Base price framework. Effective in February 2017, the framework will maintain the current tolling agreement structure, as fuels will continue to be sourced by CAMMESA. A key change will be introduced to the tariff structure which will now have prices set in USD and also eliminates all future non-cash retention of margins. In December 2015, the finance minister lifted foreign currency controls, allowing the peso to float under the administration of Argentinean Central Bank. The newly freed currency fell by more than 30%. Over the course of 2016, the Argentinean Peso devalued by approximately 22%. At December 31, 2016, all transactions at our businesses in Argentina were translated using the official exchange rate published by the Argentine Central Bank. See Note 7—Financing Receivables in Item 8. —Financial Statements and Supplementary Data of this Form 10-K for further information on the long-term receivables. Further weakening of the Argentine Peso and local economic activity could cause significant volatility in our results of operations, cash flows, the ability to pay dividends to the Parent Company, and the value of our assets. Key Financial Drivers — Financial results are likely to be driven by many factors including, but not limited to: ? Forced outages may impact earnings ? FX exposure to fluctuations of the Argentine Peso ? Hydrology ? Timely collection of FONINVEMEM installment and outstanding receivables (See Note 7—Financing Receivables in Item 8. —Financial Statements and Supplementary Data for further discussion) ? Level of gas prices for contracted generation (Energy Plus) Brazil SBU Our Brazil SBU has generation and distribution businesses. Tietê and Eletropaulo are publicly listed companies in Brazil. AES has a 24% economic interest in Tietê and a 17% economic interest in Eletropaulo. These businesses are consolidated in our financial statements as we maintain control over their operations. Generation — Operating installed capacity of our Brazil SBU totals 2,658 MW in AES Tietê plants, located in the state of S?o Paulo. As of December 31, 2016, Tietê represents approximately 10% of the total generation capacity in the state of S?o Paulo and is one of the largest generation companies in Brazil. We also have another generation plant, AES Uruguaiana, located in southern Brazil with an installed capacity of 640 MW. The following table lists our Brazil SBU generation facilities: |
0.67951 | In the year with the most ALM strategy only, what is the growth rate of PDI? | Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 10 Other income (deductions) changed from $47.6 million in 2002 to ($36.0 million) in 2003 primarily due to a decrease in "miscellaneous - net" as a result of a $107.7 million accrual in the second quarter of 2003 for the loss that would be associated with a final, non-appealable decision disallowing abeyed River Bend plant costs. See Note 2 to the consolidated financial statements for more details regarding the River Bend abeyed plant costs. The decrease was partially offset by an increase in interest and dividend income as a result of the implementation of SFAS 143. Interest on long-term debt decreased from $462.0 million in 2002 to $433.5 million in 2003 primarily due to the redemption and refinancing of long-term debt. NON-UTILITY NUCLEAR Following are key performance measures for Non-Utility Nuclear:
<table><tr><td></td><td>2004</td><td>2003</td><td>2002</td></tr><tr><td>Net MW in operation at December 31</td><td>4,058</td><td>4,001</td><td>3,955</td></tr><tr><td>Average realized price per MWh</td><td>$41.26</td><td>$39.38</td><td>$40.07</td></tr><tr><td>Generation in GWh for the year</td><td>32,524</td><td>32,379</td><td>29,953</td></tr><tr><td>Capacity factor for the year</td><td>92%</td><td>92%</td><td>93%</td></tr></table>
2004 Compared to 2003 The decrease in earnings for Non-Utility Nuclear from $300.8 million to $245.0 million was primarily due to the $154.5 million net-of-tax cumulative effect of a change in accounting principle that increased earnings in the first quarter of 2003 upon implementation of SFAS 143. See "Critical Accounting Estimates - SFAS 143" below for discussion of the implementation of SFAS 143. Earnings before the cumulative effect of accounting change increased by $98.7 million primarily due to the following: ? lower operation and maintenance expenses, which decreased from $681.8 million in 2003 to $595.7 million in 2004, primarily resulting from charges recorded in 2003 in connection with the voluntary severance program; ? higher revenues, which increased from $1.275 billion in 2003 to $1.342 billion in 2004, primarily resulting from higher contract pricing. The addition of a support services contract for the Cooper Nuclear Station and increased generation in 2004 due to power uprates completed in 2003 and fewer planned and unplanned outages in 2004 also contributed to the higher revenues; and ? miscellaneous income resulting from a reduction in the decommissioning liability for a plant, as discussed in Note 8 to the consolidated financial statements. Partially offsetting this increase were the following: ? higher income taxes, which increased from $88.6 million in 2003 to $142.6 million in 2004; and ? higher depreciation expense, which increased from $34.3 million in 2003 to $48.9 million in 2004, due to additions to plant in service.2003 Compared to 2002 The increase in earnings for Non-Utility Nuclear from $200.5 million to $300.8 million was primarily due to the $154.5 million net-of-tax cumulative effect of a change in accounting principle recognized in the first quarter of 2003 upon implementation of SFAS 143. See "Critical Accounting Estimates - SFAS 143" below for discussion of the implementation of SFAS 143. Income before the cumulative effect of accounting change decreased by $54.2 million. The decrease was primarily due to $83.0 million ($50.6 million net-of-tax) of charges recorded in connection with the voluntary severance program. Except for the effect of the voluntary severance program, operation and maintenance expenses in 2003 per MWh of generation were in line with 2002 operation and maintenance expenses. Gains and Other Income The following table shows our gains and other income for the fiscal years ended December 31, 2004, January 2, 2004, and January 3, 2003.
<table><tr><td> <i>($ in millions)</i></td><td> 2004 </td><td> 2003 </td><td> 2002 </td></tr><tr><td>Timeshare note sale gains</td><td>$64</td><td>$64</td><td>$60</td></tr><tr><td>Synthetic fuel earn-out payments received, net</td><td>28</td><td>—</td><td>—</td></tr><tr><td>Gains on sales of real estate</td><td>44</td><td>21</td><td>28</td></tr><tr><td>Gains on sales of joint venture investments</td><td>19</td><td>21</td><td>44</td></tr><tr><td>Other</td><td>9</td><td>—</td><td>—</td></tr><tr><td></td><td>$164</td><td>$106</td><td>$132</td></tr></table>
Interest Expense 2004 COMPARED TO 2003 Interest expense decreased $11 million to $99 million, reflecting the repayment of $234 million of senior debt in the fourth quarter of 2003 and other subsequent debt reductions, partially offset by lower capitalized interest resulting from fewer projects under construction, primarily related to our Timeshare segment.2003 COMPARED TO 2002 Interest expense increased $24 million to $110 million, reflecting interest on the mortgage debt assumed in the fourth quarter of 2002 associated with the acquisition of 14 senior living communities, and lower capitalized interest resulting from fewer projects under construction, primarily related to our Timeshare segment. In the fourth quarter of 2003, $234 million of senior debt was repaid. The weighted average interest rate on the repaid debt was 7 percent. Interest Income, Provision for Loan Losses, and Income Tax 2004 COMPARED TO 2003 Interest income, before the provision for loan losses, increased $17 million (13 percent) to $146 million, reflecting higher loan balances, including the $200 million note collected in the third quarter of 2004 related to the acquisition by Cendant Corporation of our interest in the Two Flags joint venture and higher interest rates. We recognized $9 million of interest income associated with the $200 million note, which was issued early in the 2004 second quarter. Our provision for loan losses for 2004 was a benefit of $8 million and includes $3 million of reserves for loans deemed uncollectible at three hotels, offset by the reversal of $11 million of reserves no longer deemed necessary. Income from continuing operations before income taxes generated a tax provision of $100 million in 2004, compared to a tax benefit of $43 million in 2003. The difference is primarily attributable to the impact of the synthetic fuel joint ventures, which generated a tax benefit and tax credits of $165 million in 2004, compared to $245 million in 2003 and to higher pre-tax income. In the third quarter of 2003, we sold a 50 percent interest in our synthetic fuel joint ventures, and we currently consolidate the joint ventures.2003 COMPARED TO 2002 Interest income increased $7 million (6 percent) to $129 million. Our provision for loan losses for 2003 was $7 million and includes $15 million of reserves for loans deemed uncollectible at six hotels, offset by the reversal of $8 million of reserves no longer deemed necessary. Income from continuing operations before income taxes and minority interest generated a tax benefit of $43 million in 2003, compared to a tax provision of $32 million in 2002. The difference is primarily attributable to the impact of our synthetic fuel operation, which generated a tax benefit and tax credits of $245 million in 2003, compared to $208 million in 2002. Excluding the impact of the synthetic fuel operation, our pre-tax income was lower in 2003, which also contributed to the favorable tax impact. Our effective tax rate for discontinued operations increased from 15.7 percent to 39 percent due to the impact of the taxes in 2002 associated with the sale of stock in connection with the disposal of our Senior Living Services business. Minority Interest Minority interest increased from an expense of $55 million in 2003 to a benefit of $40 million in 2004, primarily as a result of the change in the ownership structure of the synthetic fuel joint ventures following our sale of 50 percent of our interest in the joint ventures. Due to the purchaser’s put option, which expired on November 6, 2003, minority interest for 2003 reflected our partner’s share of the synthetic fuel operating losses and its share of the associated tax benefit, along with its share of the tax credits from the June 21, 2003, sale date through the put option’s expiration date, when we began accounting for the ventures under the equity method of accounting. For 2004, minority interest reflects our partner’s share of the synthetic fuel losses from March 26, 2004 (when we began consolidating the ventures due to the adoption of FIN 46(R)), through year-end. For additional information, see the discussion relating to our “Synthetic Fuel” segment on page 19. Income from Continuing Operations 2004 COMPARED TO 2003 Income from continuing operations increased 25 percent to $594 million, and diluted earnings per share from continuing operations increased 27 percent to $2.47. The favorable results were primarily driven by strong hotel demand, new unit growth, strong timeshare results, higher interest income reflecting higher balances and rates, lower interest expense due to debt reductions, lower loan loss provisions, stronger synthetic fuel results and increased gains of $58 million, partially offset by higher income taxes excluding the synthetic fuel impact, and higher general and administrative expenses.2003 COMPARED TO 2002 Income from continuing operations increased 8 percent to $476 million, and diluted earnings per share from continuing operations advanced 11 percent to $1.94. Synthetic fuel operations contributed $96 million in 2003 compared to $74 million in 2002. Our lodging financial results declined $5 million to $702 million in 2003. The comparisons Product Specific Risks and Risk Mitigants For certain living benefits guarantees, claims will primarily represent the funding of contractholder lifetime withdrawals after the cumulative withdrawals have first exhausted the contractholder account value. Due to the age of the in force block, limited claim payments have occurred to date, and they are not expected to increase significantly within the next five years, based upon current assumptions. The timing and amount of future claims will depend on actual returns on contractholder account value and actual contractholder behavior relative to our assumptions. The majority of our current living benefits guarantees provide for guaranteed lifetime contractholder withdrawal payments inclusive of a “highest daily” contract value guarantee. Our PDI variable annuity complements our variable annuity products with the highest daily benefit and provides for guaranteed lifetime contractholder withdrawal payments, but restricts contractholder asset allocation to a single bond fund sub-account within the separate accounts. The majority of our variable annuity contracts with living benefits guarantees, and all new contracts sold with our highest daily living benefits feature, include risk mitigants in the form of an automatic rebalancing feature and/or inclusion in our ALM strategy. We may also utilize external reinsurance as a form of additional risk mitigation. The risks associated with the guaranteed benefits of certain legacy products that were sold prior to our development of the automatic rebalancing feature are also managed through our ALM strategy. Certain legacy GMAB products include the automatic rebalancing feature, but are not included in the ALM strategy. The PDI product and contracts with the GMIB feature have neither risk mitigant. Certain risks associated with PDI are managed through the limitation of contractholder asset allocations to a single bond fund sub-account. For our GMDBs, we provide a benefit payable in the event of death. Our base GMDB is generally equal to a return of cumulative deposits adjusted for any partial withdrawals. Certain products include an optional enhanced GMDB based on the greater of a minimum return on the contract value or an enhanced value. We have retained the risk that the total amount of death benefit payable may be greater than the contractholder account value. However, a substantial portion of the account values associated with GMDBs are subject to an automatic rebalancing feature because the contractholder also selected a living benefit guarantee which includes an automatic rebalancing feature. All of the variable annuity account values with living benefit guarantees also contain GMDBs. The living and death benefit features for these contracts cover the same insured life and, consequently, we have insured both the longevity and mortality risk on these contracts. The following table sets forth the risk management profile of our living benefit guarantees and GMDB features as of the periods indicated.
<table><tr><td></td><td colspan="6">December 31,</td></tr><tr><td></td><td colspan="2">2016</td><td colspan="2">2015</td><td colspan="2">2014</td></tr><tr><td></td><td>Account Value</td><td>% of Total</td><td>Account Value</td><td>% of Total</td><td>Account Value</td><td>% of Total</td></tr><tr><td></td><td colspan="6">(in millions)</td></tr><tr><td>Living benefit/GMDB features-1:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Both ALM strategy and automatic rebalancing-2</td><td>$106,585</td><td>69%</td><td>$106,018</td><td>71%</td><td>$110,953</td><td>72%</td></tr><tr><td>ALM strategy only</td><td>9,409</td><td>6%</td><td>9,994</td><td>7%</td><td>11,395</td><td>7%</td></tr><tr><td>Automatic rebalancing only</td><td>1,168</td><td>1%</td><td>1,393</td><td>1%</td><td>1,771</td><td>1%</td></tr><tr><td>External reinsurance-3</td><td>2,932</td><td>2%</td><td>1,513</td><td>1%</td><td>0</td><td>0%</td></tr><tr><td>PDI</td><td>7,926</td><td>5%</td><td>4,664</td><td>3%</td><td>2,777</td><td>2%</td></tr><tr><td>Other Products</td><td>2,730</td><td>2%</td><td>2,870</td><td>2%</td><td>3,324</td><td>2%</td></tr><tr><td>Total living benefit/GMDB features</td><td>$130,750</td><td></td><td>$126,452</td><td></td><td>$130,220</td><td></td></tr><tr><td>GMDB features and other-4</td><td>22,545</td><td>15%</td><td>22,989</td><td>15%</td><td>24,863</td><td>16%</td></tr><tr><td>Total variable annuity account value</td><td>$153,295</td><td></td><td>$149,441</td><td></td><td>$155,083</td><td></td></tr></table>
(1) All contracts with living benefit guarantees also contain GMDB features, covering the same insured contract. (2) Contracts with living benefits that are included in our ALM strategy, and have an automatic rebalancing feature. (3) Represents contracts subject to reinsurance transaction with external counterparty covering new business for the period April 1, 2015 through December 31, 2016. These contracts with living benefits also have an automatic rebalancing feature. (4) Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature. The risk profile of our variable annuity account values as of the periods above reflect our product risk diversification strategy and the runoff of legacy products over time. |
-0.10112 | what is the growth rate in advertising expense in 2003 relative to 2002? | Guarantees We adopted FASB Interpretation No.45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” at the beginning of our fiscal 2003. See “Recent Accounting Pronouncements” for further information regarding FIN 45. The lease agreements for our three office buildings in San Jose, California provide for residual value guarantees. These lease agreements were in place prior to December 31, 2002 and are disclosed in Note 14. In the normal course of business, we provide indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our products. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. We have commitments to make certain milestone and/or retention payments typically entered into in conjunction with various acquisitions, for which we have made accruals in our consolidated financial statements. In connection with our purchases of technology assets during fiscal 2003, we entered into employee retention agreements totaling $2.2 million. We are required to make payments upon satisfaction of certain conditions in the agreements. As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that limits our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. As part of our limited partnership interests in Adobe Ventures, we have provided a general indemnification to Granite Ventures, an independent venture capital firm and sole general partner of Adobe Ventures, for certain events or occurrences while Granite Ventures is, or was serving, at our request in such capacity provided that Granite Ventures acts in good faith on behalf of the partnerships. We are unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but believe the risk of having to make any payments under this general indemnification to be remote. We accrue for costs associated with future obligations which include costs for undetected bugs that are discovered only after the product is installed and used by customers. The accrual remaining at the end of fiscal 2003 primarily relates to new releases of our Creative Suites products during the fourth quarter of fiscal 2003. The table below summarizes the activity related to the accrual during fiscal 2003:
<table><tr><td>Balance at November 29, 2002</td><td>Accruals</td><td>Payments</td><td>Balance at November 28, 2003</td></tr><tr><td>$—</td><td>$5,554</td><td>$-2,369</td><td>$3,185</td></tr></table>
Advertising Expenses We expense all advertising costs as incurred and classify these costs under sales and marketing expense. Advertising expenses for fiscal years 2003, 2002, and 2001 were $24.0 million, $26.7 million and $30.5 million, respectively. Foreign Currency and Other Hedging Instruments Statement of Financial Accounting Standards No.133 (“SFAS No.133”), “Accounting for Derivative Instruments and Hedging Activities,” establishes accounting and reporting standards for derivative instruments and hedging activities and requires us to recognize these as either assets or liabilities on the balance sheet and measure them at fair value. As described in Note 15, gains and losses resulting from
<table><tr><td></td><td colspan="5">Year Ended</td></tr><tr><td></td><td>September 30, 2009</td><td>% Incr. (Decr.)</td><td>September 30, 2008</td><td>% Incr. (Decr.)</td><td>September 30, 2007</td></tr><tr><td></td><td colspan="5">($ in 000's)</td></tr><tr><td>Revenues</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Securities Commissions and</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Investment Banking Fees</td><td>$ 7,162</td><td>-78%</td><td>$ 32,292</td><td>-23%</td><td>$ 41,879</td></tr><tr><td>Investment Advisory Fees</td><td>1,355</td><td>-59%</td><td>3,326</td><td>30%</td><td>2,568</td></tr><tr><td>Interest Income</td><td>1,456</td><td>-63%</td><td>3,987</td><td>-4%</td><td>4,163</td></tr><tr><td>Trading Profits</td><td>4,531</td><td>341%</td><td>1,027</td><td>-80%</td><td>5,254</td></tr><tr><td>Other</td><td>387</td><td>-60%</td><td>975</td><td>-82%</td><td>5,340</td></tr><tr><td>Total Revenues</td><td>14,891</td><td>-64%</td><td>41,607</td><td>-30%</td><td>59,204</td></tr><tr><td>Interest Expense</td><td>421</td><td>-66%</td><td>1,235</td><td>3%</td><td>1,197</td></tr><tr><td>Net Revenues</td><td>14,470</td><td>-64%</td><td>40,372</td><td>-30%</td><td>58,007</td></tr><tr><td>Non-Interest Expense</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Compensation Expense</td><td>14,381</td><td>-44%</td><td>25,860</td><td>-8%</td><td>28,010</td></tr><tr><td>Other Expense</td><td>7,296</td><td>-60%</td><td>18,064</td><td>-23%</td><td>23,383</td></tr><tr><td>Total Non-Interest Expense</td><td>21,677</td><td>-51%</td><td>43,924</td><td>-15%</td><td>51,393</td></tr><tr><td>Income (Loss) Before Taxes</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>and Minority Interest</td><td>-7,207</td><td>103%</td><td>-3,552</td><td>-154%</td><td>6,614</td></tr><tr><td>Minority Interest in</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Pre-tax (Losses) Income Held by Others</td><td>-2,321</td><td>1,742%</td><td>-126</td><td>-104%</td><td>2,995</td></tr><tr><td>Pre-tax (Loss) Earnings</td><td>$ -4,886</td><td>-43%</td><td>$ -3,426</td><td>-195%</td><td>$ 3,619</td></tr></table>
Year ended September 30, 2009 Compared with the Year ended September 30, 2008 - Emerging Markets Emerging markets in fiscal 2009 consists of the results of our joint ventures in Latin America, including Argentina, Uruguay and Brazil. The global economic slowdown and credit crisis continued to significantly impact emerging markets in all business lines. The results in the emerging market segment declined to a $4.9 million loss from a $3.4 million loss in the prior year. This decline was a result of a $24 million, or 80%, decline in commission revenues which was almost entirely offset by a $3.5 million increase in trading profits and a $22 million decline in non-interest expenses. Our minority interest partners shared in $2.3 million of the fiscal 2009 loss before taxes. In December, our joint venture in Turkey ceased operations and subsequently filed for protection under Turkish bankruptcy laws. We have fully reserved for our equity interest in this joint venture. Year ended September 30, 2008 Compared with the Year ended September 30, 2007 - Emerging Markets Emerging markets consists of the results of our joint ventures in Argentina, Uruguay, Brazil and Turkey. The results in the emerging market segment declined from a $3.6 million profit in fiscal 2007 to a $3.4 million loss in fiscal 2008. This decline was a result of a greater decline in revenues than an increase in expenses. Expenses were impacted by our investment in Brazil. The global economic slowdown and credit crisis significantly impacted emerging markets in all business lines. Commission revenue declined 23% in fiscal 2008 as compared to the prior year as the economic slowdown and a series of political crises in Turkey and Argentina during 2008 severely undermined investors’ confidence in these countries. Trading profits declined due to losses taken in proprietary positions in Turkey. The commission expense portion of compensation expense declined in proportion to the decline in commission revenue. Other expenses in fiscal 2007 were unusually high due to the accrual of tax liabilities and the related legal expenses. As of September 30, 2008, we were still awaiting the final outcome of the litigation in Turkey, and in light of the suspension of the entity’s license, our ability to continue as a going concern in Turkey was uncertain. We had fully reserved for our investment in the Turkish joint venture as of September 30, 2008 and, accordingly, fiscal 2008 pre-tax earnings did not include any net impact of our Turkish joint venture. Index 64 Certain statistical disclosures by bank holding companies As a financial holding company, we are required to provide certain statistical disclosures by bank holding companies pursuant to the SEC’s Industry Guide 3. Certain of those disclosures are as follows for the fiscal year indicated:
<table><tr><td></td><td colspan="3">Year ended September 30,</td></tr><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>RJF return on average assets<sup>-1</sup></td><td>1.8%</td><td>2.0%</td><td>2.1%</td></tr><tr><td>RJF return on average equity<sup>-2</sup></td><td>11.3%</td><td>11.5%</td><td>12.3%</td></tr><tr><td>Average equity to average assets<sup>-3</sup></td><td>17.1%</td><td>18.5%</td><td>18.1%</td></tr><tr><td>Dividend payout ratio<sup>-4</sup></td><td>21.9%</td><td>21.0%</td><td>19.3%</td></tr></table>
(1) Computed as net income attributable to RJF for the year indicated, divided by average assets (the sum of total assets at the beginning and end of the year, divided by two). (2) Computed by utilizing the net income attributable to RJF for the year indicated, divided by the average equity attributable to RJF for each respective fiscal year. Average equity is computed by adding the total equity attributable to RJF as of each quarter-end date during the indicated fiscal year, plus the beginning of the year total, divided by five. (3) Computed as average equity (the sum of total equity at the beginning and end of the fiscal year, divided by two), divided by average assets (the sum of total assets at the beginning and end of the fiscal year, divided by two). (4) Computed as dividends declared per common share during the fiscal year as a percentage of diluted earnings per common share. Refer to the RJ Bank section of this MD&A, various sections within Item 7A in this report and the Notes to Consolidated Financial Statements in this Form 10-K for the other required disclosures. Liquidity and Capital Resources Liquidity is essential to our business. The primary goal of our liquidity management activities is to ensure adequate funding to conduct our business over a range of market environments. Senior management establishes our liquidity and capital policies. These policies include senior management’s review of shortand long-term cash flow forecasts, review of monthly capital expenditures, the monitoring of the availability of alternative sources of financing, and the daily monitoring of liquidity in our significant subsidiaries. Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk and impact on future liquidity needs. Our treasury department assists in evaluating, monitoring and controlling the impact that our business activities have on our financial condition, liquidity and capital structure as well as maintains our relationships with various lenders. The objectives of these policies are to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity. Liquidity is provided primarily through our business operations and financing activities. Financing activities could include bank borrowings, repurchase agreement transactions or additional capital raising activities under our “universal” shelf registration statement. Cash used in operating activities during the year ended September 30, 2016 was $518 million. Successful operating results generated a $650 million increase in cash. Increases in cash from operations include: ? An increase in brokerage client payables had a $1.82 billion favorable impact on cash. The increase largely results from two factors. First, many clients reacted to uncertainties in the equity markets by increasing the cash balances in their brokerage accounts. Second, our brokerage client account balances increased as a result of our fiscal year 2016 acquisitions of Alex. Brown and 3Macs. Cumulatively, these two factors result in the increase in brokerage client payables and a corresponding increase in assets segregated pursuant to regulations which is discussed below. ? Stock loaned, net of stock borrowed, increased $153 million. ? Accrued compensation, commissions and benefits increased $46 million as a result of the increased financial results we achieved in fiscal year 2016. Offsetting these, decreases in cash used in operations resulted from: ? A $1.95 billion increase in assets segregated pursuant to regulations and other segregated assets, primarily resulting from the increase in client cash balances described above. RALPH LAUREN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The weighted-average number of common shares outstanding used to calculate basic net income (loss) per common share is reconciled to shares used to calculate diluted net income (loss) per common share as follows: |
28 | what was the value in millions of non cash assets for the transaction in which opcity was acquired? | NEWS CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Contract liabilities and assets The Company’s deferred revenue balance primarily relates to amounts received from customers for subscriptions paid in advance of the services being provided. The following table presents changes in the deferred revenue balance for the fiscal year ended June 30, 2019:
<table><tr><td></td><td>For the fiscal year ended June 30, 2019 (in millions)</td></tr><tr><td>Balance as of July 1, 2018</td><td>$510</td></tr><tr><td>Deferral of revenue</td><td>3,008</td></tr><tr><td>Recognition of deferred revenue<sup>(a)</sup></td><td>-3,084</td></tr><tr><td>Other</td><td>-6</td></tr><tr><td>Balance as of June 30, 2019</td><td>$428</td></tr></table>
(a) For the fiscal year ended June 30, 2019, the Company recognized approximately $493 million of revenue which was included in the opening deferred revenue balance. Contract assets were immaterial for disclosure as of June 30, 2019. Practical expedients The Company typically expenses sales commissions incurred to obtain a customer contract as those amounts are incurred as the amortization period is 12 months or less. These costs are recorded within Selling, general and administrative in the Statements of Operations. The Company also applies the practical expedient for significant financing components when the transfer of the good or service is paid within 12 months or less, or the receipt of consideration is received within 12 months or less of the transfer of the good or service. Other revenue disclosures During the fiscal year ended June 30, 2019, the Company recognized approximately $316 million in revenues related to performance obligations that were satisfied or partially satisfied in a prior reporting period. The remaining transaction price related to unsatisfied performance obligations as of June 30, 2019 was approximately $354 million, of which approximately $182 million is expected to be recognized during fiscal 2020, approximately $129 million is expected to be recognized in fiscal 2021, $35 million is expected to be recognized in fiscal 2022, $5 million is expected to be recognized in fiscal 2023, with the remainder to be recognized thereafter. These amounts do not include (i) contracts with an expected duration of one year or less, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage and (iii) variable consideration allocated to performance obligations accounted for under the series guidance that meets the allocation objective under ASC 606. NOTE 4. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONS Fiscal 2019 Opcity In October 2018, the Company acquired Opcity, a market-leading real estate technology platform that matches qualified home buyers and sellers with real estate professionals in real time. The total transaction value was approximately $210 million, consisting of approximately $182 million in cash, net of $7 million of cash The following table provides information regarding key properties within News Corp Australia’s portfolio:
<table><tr><td></td><td> Average Daily Paid Print Circulation<sup>-1</sup></td><td> Total Paid Subscribers for Combined Masthead (Print and Digital)<sup>(2)</sup></td><td> Total Monthly Audience for Combined Masthead (Print and Digital)<sup>(3)</sup></td></tr><tr><td><i>The Australian (Mon – Fri)</i></td><td>83,684</td><td>164,968</td><td>3.7 million</td></tr><tr><td><i>The Weekend Australian (Sat)</i></td><td>207,837</td><td></td><td></td></tr><tr><td><i>The Daily Telegraph (Mon – Sat)</i></td><td>167,785</td><td>87,560</td><td>4.3 million</td></tr><tr><td><i>The Sunday Telegraph</i></td><td>299,352</td><td></td><td></td></tr><tr><td><i>Herald Sun (Mon – Sat)</i></td><td>245,255</td><td>107,816</td><td>4.1 million</td></tr><tr><td><i>Sunday Herald Sun</i></td><td>295,514</td><td></td><td></td></tr><tr><td><i>The Courier Mail (Mon – Sat)</i></td><td>104,879</td><td>81,949</td><td>2.5 million</td></tr><tr><td><i>The Sunday Mail</i></td><td>228,467</td><td></td><td></td></tr><tr><td><i>The Advertiser (Mon – Sat)</i></td><td>97,173</td><td>81,167</td><td>1.8 million</td></tr><tr><td><i>Sunday Mail</i></td><td>153,496</td><td></td><td></td></tr></table>
(1) For the year ended June 30, 2019, based on internal sources. (2) As of June 30, 2019, based on internal sources. (3) Based on Enhanced Media Metrics Australia (“EMMA”) average monthly print readership data for the year ended May 31, 2019 and Nielsen desktop, mobile and tablet audience data for May 2019. EMMA data incorporates more frequent sampling and combines both online usage derived from Nielsen data and print usage into a single metric that removes any audience overlap. News Corp Australia’s broad portfolio of digital properties also includes news. com. au, the leading general interest site in Australia that provides breaking news, finance, entertainment, lifestyle, technology and sports news and delivers an average monthly unique audience of approximately 9.9 million based on Nielsen monthly total audience ratings for the year ended June 30, 2019. In addition, News Corp Australia owns other premier properties such as taste. com. au, a leading food and recipe site, and kidspot. com. au, a leading parenting website, as well as various other digital media assets. As of June 30, 2019, News Corp Australia’s other assets included a 14.6% interest in HT&E Limited, which operates a portfolio of Australian radio and outdoor media assets, and a 30.2% interest in Hipages Group Pty Ltd. , which operates a leading on-demand home improvement services marketplace. News UK News UK publishes The Sun, The Sun on Sunday, The Times and The Sunday Times, which are leading newspapers in the U. K that together accounted for approximately one-third of all national newspaper sales as of June 30, 2019. The Sun is the most read national paid print news brand in the U. K. , and The Times and The Sunday Times are the most read national newspapers in the U. K. quality market. Together, across print and digital, these brands now reach two-thirds of adult news readers in the U. K. , or approximately 32 million people, based on PAMCo data for the year ended March 31, 2019. News UK’s newspapers (except some Saturday and Sunday supplements) are printed at News UK’s world-class printing facilities in England, Scotland and Ireland. In addition to revenue from advertising, circulation and subscription sales for its print and digital products, News UK generates revenue by providing third party printing services through these facilities and is one of the largest contract printers in the U. K. News UK also distributes content through its digital platforms, including its websites, thesun. co. uk, thetimes. co. uk and thesundaytimes. co. uk, as well as mobile and tablet apps. News UK’s online and mobile offerings during the year included the rights to show English Premier League Football match fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $99 million, or 7%, for the fiscal year ended June 30, 2019 as compared to fiscal 2018. Advertising revenues decreased $65 million, primarily due to the $56 million negative impact of foreign currency fluctuations and the $52 million impact of weakness in the print advertising market, partially offset by the $26 million increase due to digital advertising growth and a $20 million increase from the acquisition of an integrated content marketing agency. Circulation and subscription revenues decreased $21 million primarily due to the $32 million negative impact of foreign currency fluctuations and print volume declines, partially offset by the impact of the adoption of the new revenue recognition standard, cover price increases and digital subscriber growth. News UK Revenues were $1,032 million for the fiscal year ended June 30, 2019, a decrease of $44 million, or 4%, as compared to fiscal 2018 revenues of $1,076 million. The decrease was due in part to lower Advertising revenues of $28 million, primarily due to weakness in the print advertising market and the $12 million negative impact of foreign currency fluctuations. Circulation and subscription revenues decreased $27 million, primarily due to single-copy volume declines, mainly at The Sun, and the $22 million negative impact of foreign currency fluctuations, partially offset by the impact of cover price increases across mastheads. The decrease was partially offset by higher Other revenues of $11 million, mainly due to the $38 million net benefit related to the exit from the partnership for Sun Bets in the first quarter of fiscal 2019, partially offset by lower brand partnership revenues. The impact of foreign currency fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $40 million, or 4%, for the fiscal year ended June 30, 2019 as compared to fiscal 2018. News America Marketing Revenues at News America Marketing were $895 million for the fiscal year ended June 30, 2019, a decrease of $61 million, or 6%, as compared to fiscal 2018 revenues of $956 million. The decrease was primarily related to $67 million of lower home delivered revenues, which include free-standing insert products, mainly due to lower volume. Subscription Video Services (22% and 11% of the Company’s consolidated revenues in fiscal 2019 and 2018, respectively)
<table><tr><td></td><td colspan="4"> For the fiscal years ended June 30,</td></tr><tr><td></td><td>2019</td><td>2018</td><td>Change</td><td> % Change</td></tr><tr><td> (in millions, except %)</td><td></td><td></td><td colspan="2"> Better/(Worse)</td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td></tr><tr><td>Circulation and subscription</td><td>$1,926</td><td>$850</td><td>$1,076</td><td>**</td></tr><tr><td>Advertising</td><td>215</td><td>127</td><td>88</td><td>69%</td></tr><tr><td>Other</td><td>61</td><td>27</td><td>34</td><td>**</td></tr><tr><td> Total Revenues</td><td>2,202</td><td>1,004</td><td>1,198</td><td> **</td></tr><tr><td>Operating expenses</td><td>-1,476</td><td>-654</td><td>-822</td><td>**</td></tr><tr><td>Selling, general and administrative</td><td>-346</td><td>-177</td><td>-169</td><td>-95%</td></tr><tr><td> Segment EBITDA</td><td>$380</td><td>$173</td><td>$207</td><td> **</td></tr></table>
** not meaningful For the fiscal year ended June 30, 2019, revenues at the Subscription Video Services segment increased $1,198 million and Segment EBITDA increased $207 million, as compared to fiscal 2018. The revenue and Segment EBITDA increases were primarily due to the Transaction, which contributed $1,289 million of revenue and $236 million of Segment EBITDA during the fiscal year ended June 30, 2019. The impact of foreign currency fluctuations of the U. S. dollar against local currencies resulted in a revenue decrease of $74 million for the fiscal year ended June 30, 2019 as compared to fiscal 2018. See the “Results of Operations—Fiscal 2019 (as reported) versus Fiscal 2018 (pro forma)” section below for additional details. AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The 7.50% Notes mature on May 1, 2012 and interest is payable semi-annually in arrears on May 1 and November 1 each year beginning May 1, 2004. The Company may redeem the 7.50% Notes after May 1, 2008. The initial redemption price on the 7.50% Notes is 103.750% of the principal amount, subject to a ratable decline after May 1 of the following year to 100% of the principal amount in 2010 and thereafter. The Company may also redeem up to 35% of the 7.50% Notes any time prior to February 1, 2007 (at a price equal to 107.50% of the principal amount of the notes plus accrued and unpaid interest, if any), with the net cash proceeds of certain public equity offerings within sixty days after the closing of any such offering. The 7.50% Notes rank equally with the 5.0% convertible notes and its 93?8% Notes and are structurally and effectively junior to indebtedness outstanding under the credit facilities, the ATI 12.25% Notes and the ATI 7.25% Notes. The indenture for the 7.50% Notes contains certain covenants that restrict the Company’s ability to incur more debt; guarantee indebtedness; issue preferred stock; pay dividends; make certain investments; merge, consolidate or sell assets; enter into transactions with affiliates; and enter into sale leaseback transactions.6.25% Notes Redemption—In February 2004, the Company completed the redemption of all of its outstanding $212.7 million principal amount of 6.25% Notes. The 6.25% Notes were redeemed pursuant to the terms of the indenture at 102.083% of the principal amount plus unpaid and accrued interest. The total aggregate redemption price was $221.9 million, including $4.8 million in accrued interest. The Company will record a charge of $7.1 million in the first quarter of 2004 from the loss on redemption and write-off of deferred financing fees. Other Debt Repurchases—From January 1, 2004 to March 11, 2004, the Company repurchased $36.2 million principal amount of its 5.0% Notes for approximately $36.1 million in cash and made a $21.0 million voluntary prepayment of term loan A under its credit facilities. Giving effect to the issuance of the 7.50% Notes and the use of the net proceeds to redeem all of the outstanding 6.25% Notes; repurchases of $36.2 million principal amount of the 5.0% Notes; and a voluntary prepayment of $21.0 million of the term A loan under the credit facilities; the Company’s aggregate principal payments of longterm debt, including capital leases, for the next five years and thereafter are as follows (in thousands):
<table><tr><td>2004</td><td>$73,684</td></tr><tr><td>2005</td><td>109,435</td></tr><tr><td>2006</td><td>145,107</td></tr><tr><td>2007</td><td>688,077</td></tr><tr><td>2008</td><td>808,043</td></tr><tr><td>Thereafter</td><td>1,875,760</td></tr><tr><td>Total cash obligations</td><td>3,700,106</td></tr><tr><td>Accreted value of original issue discount of the ATI 12.25% Notes</td><td>-339,601</td></tr><tr><td>Accreted value of the related warrants</td><td>-44,247</td></tr><tr><td>Total</td><td>$3,316,258</td></tr></table>
ATC Mexico Holding—In January 2004, Mr. Gearon exercised his previously disclosed right to require the Company to purchase his 8.7% interest in ATC Mexico. Giving effect to the January 2004 exercise of options described below, the Company owns an 88% interest in ATC Mexico, which is the subsidiary through which the Company conducts its Mexico operations. The purchase price for Mr. Gearon’s interest in ATC Mexico is subject to review by an independent financial advisor, and is payable in cash or shares of the Company’s Class A common stock, at the Company’s option. The Company intends to pay the purchase price in shares of its Class A common stock, and closing is expected to occur in the second quarter of 2004. In addition, the Company expects that payment of a portion of the purchase price will be contingent upon ATC Mexico meeting certain performance objectives. Note Redemptions and Repurchases. During 2004, we repurchased and redeemed approximately $1.5 billion in debt securities as follows (in millions):
<table><tr><td> Debt Security</td><td> Date </td><td> Principal Amount </td><td> Aggregate Price </td></tr><tr><td> Redemptions</td><td></td><td></td><td></td></tr><tr><td>6.25% Convertible Notes due 2009</td><td>February 2004</td><td>$212.7</td><td>$217.2</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td>September 2004</td><td>337.0</td><td>360.8</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td>November 2004</td><td>276.0</td><td>293.2</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009 -1</td><td>January 2005</td><td>133.0</td><td>139.8</td></tr><tr><td> Repurchases</td><td></td><td></td><td></td></tr><tr><td>ATI 12.25% Senior Subordinated Discount Notes due 2008 -2</td><td></td><td>309.7</td><td>230.9</td></tr><tr><td>9<sup>3</sup>/8%Senior Notes due 2009</td><td></td><td>112.1</td><td>118.9</td></tr><tr><td>5.0% Convertible Notes due 2010</td><td></td><td>73.7</td><td>73.3</td></tr><tr><td>Total</td><td></td><td>$1,454.2</td><td>$1,434.1</td></tr></table>
(1) On December 6, 2004, we issued a notice for the partial redemption on January 5, 2005 of our 93?8% senior notes due 2009. Pursuant to the indenture for the 93?8% senior notes, once a notice to redeem is issued, notes called for redemption become irrevocably due and payable on the redemption date. (2) The repurchased amount of $309.7 million represents the face amount at maturity in 2008. On the date of repurchase, such amount had an accreted value of $179.4 million, net of $14.7 million fair value allocated to warrants. ?6.25% Convertible Notes Redemption. In February 2004, we used a portion of the net proceeds from our 7.50% senior notes offering to redeem all of our outstanding $212.7 million principal amount of 6.25% convertible notes. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 102.083% of the principal amount, plus accrued and unpaid interest. We redeemed these notes for $217.2 million, plus $4.8 million in accrued interest. ?93?8% Senior Notes Redemptions. In September 2004, November 2004 and January 2005, we completed the redemption of an aggregate of $746.0 million principal amount of our outstanding 93?8% senior notes due 2009, as follows. On September 20, 2004, we redeemed $337.0 million principal amount of our outstanding 93?8% senior notes using the net proceeds from our 3.00% convertible notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 107.07% of the principal amount, for $360.8 million, plus $4.3 million in accrued interest. On November 4, 2004, we redeemed $276.0 million principal amount of our outstanding 93?8% senior notes using the net proceeds from our October 2004 7.125% senior notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 106.23% of the principal amount, for $293.2 million, plus $6.7 million in accrued interest. On January 5, 2005, we redeemed $133.0 million principal amount of our outstanding 93?8% senior notes using a portion of net proceeds from our December 2004 7.125% senior notes offering, plus additional cash on hand. We redeemed these notes pursuant to the terms of the indenture at a purchase price equal to 105.11% of the principal amount, for $139.8 million, plus $5.3 million in accrued interest. ? Other Debt Repurchases. During the year ended December 31, 2004, in addition to the redemptions discussed above, we repurchased, in privately negotiated transactions, primarily using cash on hand (i) an aggregate of $309.7 million face amount of our ATI 12.25% senior subordinated discount notes ($179.4 million accreted value, net of $14.7 million fair value allocated to warrants) for approximately $230.9 million in cash; (ii) $112.1 million principal amount of our 93?8% senior notes for $118.9 million in cash; and (iii) $73.7 million principal amount of our 5.0% convertible notes for approximately $73.3 million in cash. From December 31, 2004 to March 25, 2005, we repurchased an aggregate of $37.0 million face amount of our ATI 12.25% senior subordinated discount notes ($22.6 million accreted value, net of $1.6 million fair value allocated to warrants) for approximately $27.9 million in cash. AMERICAN TOWER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) credit facilities which the Company has designated as cash flow hedges. The eight American Tower swaps have an aggregate notional amount of $450.0 million and fixed rates ranging between 4.63% and 4.88% and the two SpectraSite swaps have an aggregate notional amount of $100.0 million and a fixed rate of 4.95%. In August 2005, and as a result of the merger with SpectraSite, Inc. , the Company acquired three interest rate swap instruments and one interest rate cap instrument. The three interest rate swaps, which had a fair value of $6.7 million at the date of acquisition, have an aggregate notional amount of $300.0 million, a fixed rate of 3.88% and expire in December 2009. The interest rate cap had a notional amount of $175.0 million, a fixed rate of 7.0%, and expired in February 2006. The interest rate swaps and the interest rate cap were not designated as cash flow hedges. The Company recorded $(0.2) million and $3.0 million of (expense) income, representing changes in fair market value which were charged to other income (expense) in the consolidated statements of operations for the years ended December 31, 2006 and 2005, respectively. During the fourth quarter of 2006, the Company entered into four forward starting interest rate swap agreements to manage exposure to variability in cash flows relating to forecasted interest payments in connection with the likely issuance of new fixed rate debt that the Company expects to issue on or before July 31, 2007. The swaps have been designated as cash flow hedges, have an aggregate notional amount of $900.0 million, fixed rates ranging between 4.73% and 5.10% and will be terminated upon issuance of new fixed rate debt. The Company is exposed to market risk for decreases in interest rates until termination of the swap and if it fails to issue such new fixed rate debt on or before such date. As of December 31, 2006, the Company expected to receive the fair value of these swap agreements of approximately $3.8 million. As of December 31, 2006, the Company would be required to pay approximately $19.1 million in cash upon settlement of the swaps if a 10% decline, or approximately 50 basis points, in interest rates were to occur from the fixed rate of the swaps between the issuance date and the settlement date of the swaps. In February 2007, the Company entered into two additional forward starting interest rate swap agreements. (See note 19. ) As of December 31, 2006, the carrying amounts of the Company’s derivative financial instruments, along with the estimated fair values of the related assets reflected in notes receivable and other long-term assets and (liabilities) reflected in other long-term liabilities in the accompanying consolidated balance sheet, are as follows (in thousands):
<table><tr><td> Derivative</td><td> Notional Amount </td><td> Interest Range</td><td> Term </td><td> Carrying Amount and Fair Value </td></tr><tr><td>Interest rate swaps</td><td>$450,000</td><td>4.63%-4.88%</td><td>Expiring in 2010</td><td>$4,143</td></tr><tr><td>Interest rate swaps</td><td>100,000</td><td>4.95%</td><td>Expiring in 2010</td><td>213</td></tr><tr><td>Interest rate swaps</td><td>300,000</td><td>3.88%</td><td>Expiring in 2009</td><td>9,471</td></tr><tr><td>Forward starting interest rate swap agreements</td><td>900,000</td><td>4.73%-5.10%</td><td>Expiring in 2012</td><td>3,753</td></tr><tr><td>Interest rate cap</td><td>25,000</td><td>8.0%</td><td>Expiring in 2007</td><td></td></tr><tr><td>Total</td><td></td><td></td><td></td><td>$17,580</td></tr></table>
During the year ended December 31, 2006, the Company recorded a net unrealized gain of approximately $6.5 million (net of a tax provision of approximately $3.5 million) in other comprehensive loss for the change in fair value of interest rate swaps designated as cash flow hedges and reclassified $0.7 million (net of an income tax benefit of $0.2 million) into results of operations during the year ended December 31, 2006. During the year ended December 31, 2005, the Company recorded a net unrealized loss of approximately $0.8 million (net of a ITEM 6. SELECTED FINANCIAL DATA You should read the selected financial data in conjunction with our “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited consolidated financial statements and the related notes to those consolidated financial statements included in this Annual Report. Our continuing operations are reported in two segments: rental and management and network development services. In accordance with generally accepted accounting principles, the consolidated statements of operations for all periods presented in this “Selected Financial Data” have been adjusted to reflect certain businesses as discontinued operations (see note 1 to our consolidated financial statements included in this Annual Report). Year-over-year comparisons are significantly affected by our acquisitions, dispositions and, to a lesser extent, construction of towers. Our August 2005 merger with SpectraSite, Inc. significantly impacts the comparability of reported results between periods.
<table><tr><td></td><td colspan="5">Year Ended December 31,</td></tr><tr><td></td><td>2008</td><td>2007</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td></td><td colspan="5">(In thousands, except per share data)</td></tr><tr><td> Statements of Operations Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Revenues:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>$1,547,035</td><td>$1,425,975</td><td>$1,294,068</td><td>$929,762</td><td>$684,422</td></tr><tr><td>Network development services</td><td>46,469</td><td>30,619</td><td>23,317</td><td>15,024</td><td>22,238</td></tr><tr><td>Total operating revenues</td><td>1,593,504</td><td>1,456,594</td><td>1,317,385</td><td>944,786</td><td>706,660</td></tr><tr><td>Operating expenses:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Costs of operations (exclusive of items shown separately below)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Rental and management</td><td>363,024</td><td>343,450</td><td>332,246</td><td>247,781</td><td>195,242</td></tr><tr><td>Network development services</td><td>26,831</td><td>16,172</td><td>11,291</td><td>8,346</td><td>16,220</td></tr><tr><td>Depreciation, amortization and accretion</td><td>405,332</td><td>522,928</td><td>528,051</td><td>411,254</td><td>329,449</td></tr><tr><td>Selling, general, administrative and development expense</td><td>180,374</td><td>186,483</td><td>159,324</td><td>108,059</td><td>83,094</td></tr><tr><td>Impairments, net loss on sale of long-lived assets, restructuring and merger related expense</td><td>11,189</td><td>9,198</td><td>2,572</td><td>34,232</td><td>23,876</td></tr><tr><td>Total operating expenses</td><td>986,750</td><td>1,078,231</td><td>1,033,484</td><td>809,672</td><td>647,881</td></tr><tr><td>Operating income</td><td>606,754</td><td>378,363</td><td>283,901</td><td>135,114</td><td>58,779</td></tr><tr><td>Interest income, TV Azteca, net</td><td>14,253</td><td>14,207</td><td>14,208</td><td>14,232</td><td>14,316</td></tr><tr><td>Interest income</td><td>3,413</td><td>10,848</td><td>9,002</td><td>4,402</td><td>4,844</td></tr><tr><td>Interest expense</td><td>-253,584</td><td>-235,824</td><td>-215,643</td><td>-222,419</td><td>-262,237</td></tr><tr><td>Loss on retirement of long-term obligations</td><td>-4,904</td><td>-35,429</td><td>-27,223</td><td>-67,110</td><td>-138,016</td></tr><tr><td>Other income (expense)</td><td>5,988</td><td>20,675</td><td>6,619</td><td>227</td><td>-2,798</td></tr><tr><td>Income (loss) before income taxes, minority interest and income (loss) on equity method investments</td><td>371,920</td><td>152,840</td><td>70,864</td><td>-135,554</td><td>-325,112</td></tr><tr><td>Income tax (provision) benefit</td><td>-135,509</td><td>-59,809</td><td>-41,768</td><td>-5,714</td><td>83,338</td></tr><tr><td>Minority interest in net earnings of subsidiaries</td><td>-169</td><td>-338</td><td>-784</td><td>-575</td><td>-2,366</td></tr><tr><td>Income (loss) on equity method investments</td><td>22</td><td>19</td><td>26</td><td>-2,078</td><td>-2,915</td></tr><tr><td>Income (loss) from continuing operations before cumulative effect of change in accounting principle</td><td>$236,264</td><td>$92,712</td><td>$28,338</td><td>$-143,921</td><td>$-247,055</td></tr><tr><td>Basic income (loss) per common share from continuing operations before cumulative effect of change in accounting principle(1)</td><td>$0.60</td><td>$0.22</td><td>$0.06</td><td>$-0.47</td><td>$-1.10</td></tr><tr><td>Diluted income (loss) per common share from continuing operations before cumulative effect of change in accountingprinciple(1)</td><td>$0.58</td><td>$0.22</td><td>$0.06</td><td>$-0.47</td><td>$-1.10</td></tr><tr><td>Weighted average common shares outstanding-1</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>395,947</td><td>413,167</td><td>424,525</td><td>302,510</td><td>224,336</td></tr><tr><td>Diluted</td><td>418,357</td><td>426,079</td><td>436,217</td><td>302,510</td><td>224,336</td></tr><tr><td> Other Operating Data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ratio of earnings to fixed charges-2</td><td>2.12x</td><td>1.50x</td><td>1.25x</td><td>—</td><td>—</td></tr></table> |
-0.8 | In the section with lowest amount of Sales, what's the increasing rate of Fair Value ? (in %) | Management’s Discussion and Analysis of Financial Condition and Results of Operations assumed and actual policyholder behavior and between the performance of the actively managed funds underlying the separate accounts and their respective indices. While the Company actively manages this dynamic hedging program, increased U. S. GAAP earnings volatility may result from factors including, but not limited to: policyholder behavior, capital markets, divergence between the performance of the underlying funds and the hedging indices, changes in hedging positions and the relative emphasis placed on various risk management objectives. Macro Hedge Program The Company’s macro hedging program uses derivative instruments, such as options and futures on equities and interest rates, to provide protection against the statutory tail scenario risk arising from GMWB and GMDB liabilities on the Company’s statutory surplus. These macro hedges cover some of the residual risks not otherwise covered by the dynamic hedging program. Management assesses this residual risk under various scenarios in designing and executing the macro hedge program. The macro hedge program will result in additional U. S. GAAP earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory reserve and capital volatility, may not be closely aligned to changes in GAAP liabilities. Variable Annuity Hedging Program Sensitivities The underlying guaranteed withdrawal benefit liabilities (excluding the life contingent portion of GMWB contracts) and hedge assets within the GMWB hedge and Macro hedge programs are carried at fair value. The following table presents our estimates of the potential instantaneous impacts from sudden market stresses related to equity market prices, interest rates, and implied market volatilities. The following sensitivities represent: (1) the net estimated difference between the change in the fair value of GMWB liabilities and the underlying hedge instruments and (2) the estimated change in fair value of the hedge instruments for the macro program, before the impacts of amortization of DAC and taxes. As noted in the preceding discussion, certain hedge assets are used to hedge liabilities that are not carried at fair value and will not have a liability offset in the U. S. GAAP sensitivity analysis. All sensitivities are measured as of December 31, 2016 and are related to the fair value of liabilities and hedge instruments in place at that date for the Company’s variable annuity hedge programs. The impacts presented in the table that follows are estimated individually and measured without consideration of any correlation among market risk factors.
<table><tr><td></td><td colspan="3">GMWB</td><td colspan="3">Macro</td></tr><tr><td>Equity Market Return</td><td>-20%</td><td>-10%</td><td>10%</td><td>-20%</td><td>-10%</td><td>10%</td></tr><tr><td>Potential Net Fair Value Impact</td><td>$-3</td><td>$1</td><td>$-5</td><td>$265</td><td>$112</td><td>$-80</td></tr><tr><td>Interest Rates</td><td>-50bps</td><td>-25bps</td><td>+25bps</td><td>-50bps</td><td>-25bps</td><td>+25bps</td></tr><tr><td>Potential Net Fair Value Impact</td><td>$-3</td><td>$-1</td><td>$-1</td><td>$6</td><td>$3</td><td>$-2</td></tr><tr><td>Implied Volatilities</td><td>10%</td><td>2%</td><td>-10%</td><td>10%</td><td>2%</td><td>-10%</td></tr><tr><td>Potential Net Fair Value Impact</td><td>$-69</td><td>$-14</td><td>$67</td><td>$136</td><td>$27</td><td>$-125</td></tr></table>
[1] These sensitivities are based on the following key market levels as of December 31, 2016: 1) S&P of 2,239; 2) 10yr US swap rate of 2.38%; and 3) S&P 10yr volatility of 27.06%. The preceding sensitivity analysis is an estimate and should not be used to predict the future financial performance of the Company’s variable annuity hedge programs. The actual net changes in the fair value liability and the hedging assets illustrated in the preceding table may vary materially depending on a variety of factors which include but are not limited to: ? The sensitivity analysis is only valid as of the measurement date and assumes instantaneous changes in the capital market factors and no ability to rebalance hedge positions prior to the market changes; ? Changes to the underlying hedging program, policyholder behavior, and variation in underlying fund performance relative to the hedged index, which could materially impact the liability; and ? The impact of elapsed time on liabilities or hedge assets, any non-parallel shifts in capital market factors, or correlated moves across the sensitivities. Foreign Currency Exchange Risk Foreign currency exchange risk is the risk of financial loss due to changes in the relative value between currencies. Sources of currency risk The Company has foreign currency exchange risk in non-U. S. dollar denominated investments, which primarily consist of fixed maturity and equity investments, foreign denominated cash, a yen denominated fixed payout annuity and changes in equity of a P&C run-off entity in the United Kingdom. In addition, the Company’s Talcott Resolution segment formerly issued non-U. S. dollar denominated funding agreement liability contracts. Impact Changes in relative values between currencies can create variability in cash flows and realized or unrealized gains and losses on changes in the fair value of assets and liabilities. Based on the fair values of the Company’s non-U. S. dollar denominated securities and derivative instruments as of December 31, 2016 and 2015, management estimates that a hypothetical 10% unfavorable change in exchange rates would decrease the fair values by a before-tax total of $11 and $48, respectively, and as of December 31, 2016 excludes the impact of the assets that transferred to held for sale related to the U. K. property and casualty run-off subsidiaries . Actual results could differ materially due to the nature of the estimates and assumptions used in the analysis. CAPITAL RESOURCES AND LIQUIDITY 100 www. thehartford. com Off-balance Sheet Arrangements and Aggregate Contractual Obligations The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity, or capital resources of the Company, except for the contingent capital facility described above, as well as unfunded commitments to purchase investments in limited partnerships and other alternative investments, private placements, and mortgage loans as disclosed in Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.
<table><tr><td></td><td colspan="5">Payments due by period</td></tr><tr><td></td><td>Total</td><td>Less than1 year</td><td>1-3years</td><td>3-5years</td><td>More than5 years</td></tr><tr><td>Property and casualty obligations [1]</td><td>$22,316</td><td>$5,071</td><td>$5,294</td><td>$2,579</td><td>$9,372</td></tr><tr><td>Life, annuity and disability obligations [2]</td><td>249,730</td><td>17,318</td><td>30,398</td><td>24,466</td><td>177,548</td></tr><tr><td>Operating lease obligations [3]</td><td>163</td><td>42</td><td>63</td><td>30</td><td>28</td></tr><tr><td>Long-term debt obligations [4]</td><td>10,501</td><td>726</td><td>1,270</td><td>942</td><td>7,563</td></tr><tr><td>Purchase obligations [5]</td><td>3,188</td><td>2,379</td><td>576</td><td>208</td><td>25</td></tr><tr><td>Other liabilities reflected on the balance sheet [6]</td><td>1,687</td><td>1,297</td><td>389</td><td>1</td><td>—</td></tr><tr><td>Total</td><td>$287,585</td><td>$26,833</td><td>$37,990</td><td>$28,226</td><td>$194,536</td></tr></table>
[1] The following points are significant to understanding the cash flows estimated for obligations (gross of reinsurance) under property and casualty contracts: ? Reserves for Property & Casualty unpaid losses and loss adjustment expenses include IBNR and case reserves. While payments due on claim reserves are considered contractual obligations because they relate to insurance policies issued by the Company, the ultimate amount to be paid to settle both case reserves and IBNR is an estimate, subject to significant uncertainty. The actual amount to be paid is not finally determined until the Company reaches a settlement with the claimant. Final claim settlements may vary significantly from the present estimates, particularly since many claims will not be settled until well into the future. ? In estimating the timing of future payments by year, the Company has assumed that its historical payment patterns will continue. However, the actual timing of future payments could vary materially from these estimates due to, among other things, changes in claim reporting and payment patterns and large unanticipated settlements. In particular, there is significant uncertainty over the claim payment patterns of asbestos and environmental claims. In addition, the table does not include future cash flows related to the receipt of premiums that may be used, in part, to fund loss payments. ? Under U. S. GAAP, the Company is only permitted to discount reserves for losses and loss adjustment expenses in cases where the payment pattern and ultimate loss costs are fixed and determinable on an individual claim basis. For the Company, these include claim settlements with permanently disabled claimants. As of December 31, 2016, the total property and casualty reserves in the above table are gross of a reserve discount of $483. [2] Estimated life, annuity and disability obligations (gross of reinsurance) include death and disability claims, policy surrenders, policyholder dividends and trail commissions offset by expected future deposits and premiums on in-force contracts. Estimated life, annuity and disability obligations are based on mortality, morbidity and lapse assumptions comparable with the Company’s historical experience, modified for recent observed trends. The Company has also assumed market growth and interest crediting consistent with other assumptions. In contrast to this table, the majority of the Company’s obligations are recorded on the balance sheet at the current account values and do not incorporate an expectation of future market growth, interest crediting, or future deposits. Therefore, the estimated obligations presented in this table significantly exceed the liabilities recorded in reserve for future policy benefits and unpaid losses and loss adjustment expenses, other policyholder funds and benefits payable, and separate account liabilities. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. [3] Includes future minimum lease payments on operating lease agreements. See Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements for additional discussion on lease commitments. [4] Includes contractual principal and interest payments. See Note 13 - Debt of Notes to Consolidated Financial Statements for additional discussion of long-term debt obligations. [5] Includes $1.6 billion in commitments to purchase investments including approximately $1.2 billion of limited partnership and other alternative investments, $313 of private placements, and $95 of mortgage loans. Outstanding commitments under these limited partnerships and mortgage loans are included in payments due in less than 1 year since the timing of funding these commitments cannot be reliably estimated. The remaining commitments to purchase investments primarily represent payables for securities purchased which are reflected on the Company’s Consolidated Balance Sheets. Also included in purchase obligations is $962 relating to contractual commitments to purchase various goods and services such as maintenance, human resources, and information technology in the normal course of business. Purchase obligations exclude contracts that are cancelable without penalty or contracts that do not specify minimum levels of goods or services to be purchased. [6] Includes cash collateral of $387 which the Company has accepted in connection with the Company’s derivative instruments. Since the timing of the return of the collateral is uncertain, the return of the collateral has been included in the payments due in less than 1 year. Also included in other long-term liabilities are net unrecognized tax benefits of $12, retained yen denominated fixed payout annuity liabilities of $540, and consumer notes of $21. Consumer notes include principal payments and contractual interest for fixed rate notes and interest based on current rates for floating rate notes. THE HARTFORD FINANCIAL SERVICES GROUP, INC. Notes to Consolidated Financial Statements (continued) 18. Employee Benefit Plans (CONTINUED) Pension Plan Assets at Fair Value as of December 31, 2015
<table><tr><td>Assets</td><td>Corporate</td><td>RMBS</td><td>Foreign government</td><td>Mortgage loans</td><td>Other [1]</td><td>Totals</td></tr><tr><td>Fair Value as of January 1, 2016</td><td>$19</td><td>$24</td><td>$5</td><td>$54</td><td>$5</td><td>$107</td></tr><tr><td>Realized gains (losses), net</td><td>—</td><td>—</td><td>—</td><td>—</td><td>1</td><td>1</td></tr><tr><td>Changes in unrealized gains (losses), net</td><td>—</td><td>—</td><td>—</td><td>-3</td><td>—</td><td>-3</td></tr><tr><td>Purchases</td><td>15</td><td>—</td><td>—</td><td>70</td><td>24</td><td>109</td></tr><tr><td>Settlements</td><td>—</td><td>-14</td><td>—</td><td>—</td><td>-1</td><td>-15</td></tr><tr><td>Sales</td><td>-10</td><td>—</td><td>-4</td><td>—</td><td>-9</td><td>-23</td></tr><tr><td>Transfers into Level 3</td><td>—</td><td>2</td><td>—</td><td>—</td><td>3</td><td>5</td></tr><tr><td>Transfers out of Level 3</td><td>-11</td><td>-2</td><td>—</td><td>—</td><td>-1</td><td>-14</td></tr><tr><td>Fair Value as of December 31, 2016</td><td>$13</td><td>$10</td><td>$1</td><td>$121</td><td>$22</td><td>$167</td></tr></table>
[1] Includes ABS,municipal bonds, and CDOs. [2] Excludes approximately $67 of investment payables net of investment receivables that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Also excludes approximately $27 of interest receivable. [3] Represents investments that calculate net asset value per share or an equivalent measurement. The tables below provide fair value level 3 roll-forwards for the Pension Plan Assets for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. The Plan classifies the fair value of financial instruments within Level 3 if there are no observable markets for the instruments or, in the absence of active markets, if one or more of the significant inputs used to determine fair value are based on the Plan’s own assumptions. Therefore, the gains and losses in the tables below include changes in fair value due to both observable and unobservable factors.2016 Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
<table><tr><td>Asset Category</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>Total</td></tr><tr><td>Short-term investments:</td><td>$7</td><td>$274</td><td>$—</td><td>$281</td></tr><tr><td>Fixed Income Securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Corporate</td><td>—</td><td>922</td><td>19</td><td>941</td></tr><tr><td>RMBS</td><td>—</td><td>242</td><td>24</td><td>266</td></tr><tr><td>U.S. Treasuries</td><td>16</td><td>1,029</td><td>3</td><td>1,048</td></tr><tr><td>Foreign government</td><td>—</td><td>49</td><td>5</td><td>54</td></tr><tr><td>CMBS</td><td>—</td><td>183</td><td>—</td><td>183</td></tr><tr><td>Other fixed income [1]</td><td>—</td><td>105</td><td>1</td><td>106</td></tr><tr><td>Mortgage Loans</td><td>—</td><td>—</td><td>54</td><td>54</td></tr><tr><td>Equity Securities:</td><td></td><td></td><td></td><td></td></tr><tr><td>Large-cap domestic</td><td>500</td><td>11</td><td>1</td><td>512</td></tr><tr><td>International</td><td>298</td><td>87</td><td>—</td><td>385</td></tr><tr><td>Total pension plan assets at fair value [2]</td><td>$821</td><td>$2,902</td><td>$107</td><td>$3,830</td></tr><tr><td>Other Investments [3]:</td><td></td><td></td><td></td><td></td></tr><tr><td>Private Market Alternatives</td><td>$—</td><td>$—</td><td>$—</td><td>$20</td></tr><tr><td>Hedge funds</td><td>$—</td><td>$—</td><td>$—</td><td>$620</td></tr><tr><td>Total pension plan assets</td><td>$821</td><td>$2,902</td><td>$107</td><td>$4,470</td></tr></table>
[1] “Other” includes U. S. Treasuries, Other fixed income and Large-cap domestic equities investments. During the year ended December 31, 2016, transfers into and (out) of Level 3 are primarily attributable to the appearance of or lack thereof of market observable information and the re-evaluation of the observability of pricing inputs. Other expense, net, decreased $6.2 million, or 50.0%, for the year ended December 31, 2004 compared to the year ended December 31, 2003. The decrease was primarily due to a reductionin charges on disposal and transfer costs of fixed assets and facility closure costs of $3.3 million, reduced legal charges of $1.5 million, and a reduction in expenses of $1.4 million consisting of individually insignificant items. Interest Expense and Income Taxes Interest expense decreased in2004by $92.2 million, or 75.7%, from 2003. This decrease included $73.3 millionof expenses related to the Company’s debt refinancing, which was completed in July 2003. The$73.3 million of expenses consisted of$55.9 millionpaid in premiums for the tender of the95?8% senior subordinated notes, and a $17.4 million non-cashcharge for the write-off of deferred financing fees related to the 95?8% notes and PCA’s original revolving credit facility. Excluding the $73.3 million charge, interest expense was $18.9 million lower thanin 2003 as a result of lower interest rates attributable to the Company’s July 2003 refinancing and lower debt levels. PCA’s effective tax rate was 38.0% for the year ended December 31, 2004 and 42.3% for the year ended December 31, 2003. The higher tax rate in 2003 is due to stable permanent items over lower book income (loss). For both years 2004 and 2003 tax rates are higher than the federal statutory rate of 35.0% due to state income taxes. YearEnded December31, 2003 Compared to Year Ended December31, 2002The historical results of operations of PCA for the years ended December 31, 2003 and 2002 are set forth below: |
1.4 | What's the total amount of the Gas utility operations in the years where lectric utility operations is greater than 1? | In recent years, the Michigan legislature has conducted hearings on the subject of energy competition. If the ROA limit were increased or if electric generation service in Michigan were deregulated, Consumers’ financial results and operations could be materially adversely affected. Electric Transmission: In 2012, ReliabilityFirst Corporation informed Consumers that Consumers may not be properly registered to meet certain NERC electric reliability standards. Consumers assessed its registration status, taking into consideration FERC’s December 2012 order on the definition of a bulk electric system, and in 2013 notified ReliabilityFirst Corporation that it was preparing to register as a transmission owner, transmission planner, and transmission operator. In light of this order, Consumers reviewed the classification of certain electric distribution assets and, in April 2014, filed an application for reclassification with the MPSC. In October 2014, the MPSC approved a settlement agreement that will allow Consumers to reclassify $34 million of net plant assets from distribution to transmission, subject to FERC approval. In January 2015, Consumers filed an application for reclassification with FERC. Electric Rate Matters: Rate matters are critical to Consumers’ electric utility business. For additional details on rate matters, see Note 3, Regulatory Matters. Electric Rate Design: In June 2014, Michigan’s governor signed legislation requiring the MPSC to explore alternative cost allocation and rate design methods that would promote affordable and competitive rates for all electric customers. In conjunction with this legislation, Consumers submitted to the MPSC a proposal for a new electric rate design in October 2014. This proposed new design will better ensure that rates are equal to the cost of service and will have the effect of making rates for energyintensive industrial customers more competitive, while keeping residential bills affordable. Consumers incorporated its proposed new rate design into the rate case it filed in December 2014. Electric Rate Case: In December 2014, Consumers filed an application with the MPSC seeking an annual rate increase of $163 million, based on a 10.7 percent authorized return on equity. The filing requested authority to recover new investment in system reliability, environmental compliance, and technology enhancements. Presented in the following table are the components of the requested increase in revenue:
<table><tr><td></td><td>In Millions</td></tr><tr><td>Components of the rate increase</td><td></td></tr><tr><td>Investment in rate base</td><td>$ 185</td></tr><tr><td>Addition of new gas plant</td><td>35</td></tr><tr><td>Operating and maintenance costs</td><td>26</td></tr><tr><td>Cost of capital</td><td>21</td></tr><tr><td>Working capital</td><td>6</td></tr><tr><td>Cost-reduction initiatives</td><td>-80</td></tr><tr><td>Gross margin</td><td>-30</td></tr><tr><td>Total</td><td>$ 163</td></tr></table>
The filing also seeks approval of an investment recovery mechanism that would allow recovery of an additional $163 million in total for incremental investments that Consumers plans to make in 2016 and 2017 and $78 million for incremental investments planned in 2018, subject to reconciliation. Depreciation Rate Case: In June 2014, Consumers filed a depreciation case related to its electric and common utility property. In this case, Consumers requested an increase in depreciation expense, and its recovery of that expense, of $28 million annually. PSCR Plan: Consumers submitted its 2015 PSCR plan to the MPSC in September 2014 and, in accordance with its proposed plan, self-implemented the 2015 PSCR charge beginning in January 2015. In 2013, the U. S. Court of Appeals for the Ninth Circuit reversed the district court decision. The appellate court found that FERC preemption does not apply under the facts of these cases. The appellate court affirmed the district court’s denial of leave to amend to add federal antitrust claims. The matter was appealed to the U. S. Supreme Court, which in 2015 upheld the Ninth Circuit’s decision. The cases were remanded back to the federal district court. In May 2016, the federal district court granted the defendants’ motion for summary judgment in the individual lawsuit based on a release in a prior settlement involving similar allegations and reinstated CMS Energy as a defendant in one of the class action lawsuits. The order of summary judgment has been appealed. In December 2016, CMS Energy entities reached a tentative settlement with the plaintiffs in the three Kansas and Missouri cases for an amount that was not material to CMS Energy. Notice of the tentative settlement has been filed in the federal district court. The settlement will be subject to court approval. Other CMS Energy entities remain as defendants in the two Wisconsin class action lawsuits. These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions. Presently, any estimate of liability would be highly speculative; the amount of CMS Energy’s reasonably possible loss would be based on widely varying models previously untested in this context. If the outcome after appeals is unfavorable, these cases could negatively affect CMS Energy’s liquidity, financial condition, and results of operations. Bay Harbor: CMS Land retained environmental remediation obligations for the collection and treatment of leachate, a liquid consisting of water and other substances, at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and the MDEQ finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit issued in 2010 and renewed in October 2016. The renewed NPDES permit is valid through September 2020. Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters. CMS Land and other parties have received a demand for payment from the EPA in the amount of $8 million, plus interest. The EPA is seeking recovery under CERCLA of response costs allegedly incurred at Bay Harbor. These costs exceed what was agreed to in a 2005 order between CMS Land and the EPA, and CMS Land has communicated to the EPA that it does not believe that this is a valid claim. The EPA has filed a lawsuit to collect these costs. At December 31, 2016, CMS Energy had a recorded liability of $51 million for its remaining obligations for environmental remediation. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $65 million. CMS Energy expects to pay the following amounts for long-term liquid disposal and operating and maintenance in each of the next five years:
<table><tr><td></td><td></td><td></td><td></td><td colspan="2"><i>In Millions</i></td></tr><tr><td></td><td>2017</td><td>2018</td><td>2019</td><td>2020</td><td>2021</td></tr><tr><td> CMS Energy</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Long-term liquid disposal and operating and maintenance costs</td><td>$5</td><td>$4</td><td>$4</td><td>$4</td><td>$4</td></tr></table>
CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter. CMS Energy and Consumers also have recognized non-current liabilities for which the timing of payments cannot be reasonably estimated. These items, which are excluded from the table above, include regulatory liabilities, deferred income taxes, workers compensation liabilities, accrued liabilities under renewable energy programs, and other liabilities. Retirement benefits are also excluded from the table above. For details related to benefit payments, see Note 12, Retirement Benefits. Off-Balance-Sheet Arrangements: CMS Energy, Consumers, and certain of their subsidiaries enter into various arrangements in the normal course of business to facilitate commercial transactions with third parties. These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees. Indemnities are usually agreements to reimburse a counterparty that may incur losses due to outside claims or breach of contract terms. The maximum payment that could be required under a number of these indemnity obligations is not estimable; the maximum obligation under indemnities for which such amounts were estimable was $153 million at December 31, 2016. While CMS Energy and Consumers believe it is unlikely that they will incur any material losses related to indemnities they have not recorded as liabilities, they cannot predict the impact of these contingent obligations on their liquidity and financial condition. For additional details on these and other guarantee arrangements, see Note 4, Contingencies and Commitments—Guarantees. For additional details on operating leases, see Note 10, Leases and Palisades Financing. Capital Expenditures: Over the next five years, CMS Energy and Consumers expect to make substantial capital investments. CMS Energy and Consumers may revise their forecasts of capital expenditures periodically due to a number of factors, including environmental regulations, business opportunities, market volatility, economic trends, and the ability to access capital. Presented in the following table are CMS Energy’s and Consumers’ estimated capital expenditures, including lease commitments, for 2017 through 2021:
<table><tr><td></td><td>2017</td><td>2018</td><td>2019</td><td>2020</td><td>2021</td><td>Total</td></tr><tr><td colspan="2"> CMS Energy, including Consumers</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Consumers</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$9.0</td></tr><tr><td>Enterprises</td><td>-</td><td>0.1</td><td>0.1</td><td>-</td><td>-</td><td>0.2</td></tr><tr><td>Total CMS Energy</td><td>$1.8</td><td>$1.9</td><td>$1.9</td><td>$1.8</td><td>$1.8</td><td>$9.2</td></tr><tr><td> Consumers</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Electric utility operations</td><td>$1.0</td><td>$0.8</td><td>$1.1</td><td>$1.1</td><td>$1.0</td><td>$5.0</td></tr><tr><td>Gas utility operations</td><td>0.8</td><td>1.0</td><td>0.7</td><td>0.7</td><td>0.8</td><td>4.0</td></tr><tr><td>Total Consumers</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$1.8</td><td>$9.0</td></tr></table>
OUTLOOK Several business trends and uncertainties may affect CMS Energy’s and Consumers’ financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy’s and Consumers’ consolidated income, cash flows, or financial position. For additional details regarding these and other uncertainties, see Forward-Looking Statements and Information; Item 1A. Risk Factors; Note 3, Regulatory Matters; and Note 4, Contingencies and Commitments. Table of Contents The following table discloses purchases of shares of our common stock made by us or on our behalf during the fourth quarter of 2017.
<table><tr><td>Period</td><td>Total Numberof SharesPurchased</td><td>AveragePrice Paidper Share</td><td>Total Number ofShares NotPurchased as Part ofPublicly AnnouncedPlans or Programs (a)</td><td>Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms</td><td>Approximate DollarValue of Shares thatMay Yet Be PurchasedUnder the Plans orPrograms (b)</td></tr><tr><td>October 2017</td><td>515,762</td><td>$77.15</td><td>292,145</td><td>223,617</td><td>$1.6 billion</td></tr><tr><td>November 2017</td><td>2,186,889</td><td>$81.21</td><td>216,415</td><td>1,970,474</td><td>$1.4 billion</td></tr><tr><td>December 2017</td><td>2,330,263</td><td>$87.76</td><td>798</td><td>2,329,465</td><td>$1.2 billion</td></tr><tr><td>Total</td><td>5,032,914</td><td>$83.83</td><td>509,358</td><td>4,523,556</td><td>$1.2 billion</td></tr></table>
(a) The shares reported in this column represent purchases settled in the fourth quarter of 2017 relating to (i) our purchases of shares in open-market transactions to meet our obligations under stock-based compensation plans, and (ii) our purchases of shares from our employees and non-employee directors in connection with the exercise of stock options, the vesting of restricted stock, and other stock compensation transactions in accordance with the terms of our stock-based compensation plans. (b) On September 21, 2016, we announced that our board of directors authorized our purchase of up to $2.5 billion of our outstanding common stock (the 2016 program) with no expiration date. As of December 31, 2017, we had $1.2 billion remaining available for purchase under the 2016 program. On January 23, 2018, we announced that our board of directors authorized our purchase of up to an additional $2.5 billion of our outstanding common stock with no expiration date. |
1,553.24 | If China develops with the same growth rate in 2013, what will it reach in 2014? (in million) | APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 102 Employee Stock Purchase Plans Under the ESPP, substantially all employees may purchase Applied common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of Applied common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Based on the Black-Scholes option pricing model, the weighted average estimated fair value of purchase rights under the ESPP was $3.08 per share for the year ended October 27, 2013, $2.73 per share for the year ended October 28, 2012 and $3.03 per share for the year ended October 30, 2011. The number of shares issued under the ESPP during fiscal 2013, 2012 and 2011 was 7 million, 7 million and 6 million, respectively. At October 27, 2013, there were 40 million available for future issuance under the ESPP. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model for fiscal 2013, 2012 and 2011 are outlined in the following table:
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>ESPP:</td><td></td><td></td><td></td></tr><tr><td>Dividend yield</td><td>2.80%</td><td>3.01%</td><td>2.53%</td></tr><tr><td>Expected volatility</td><td>24.8%</td><td>29.6%</td><td>31.1%</td></tr><tr><td>Risk-free interest rate</td><td>0.09%</td><td>0.13%</td><td>0.09%</td></tr><tr><td>Expected life (in years)</td><td>0.5</td><td>0.5</td><td>0.5</td></tr></table>
Note 13 Employee Benefit Plans Employee Bonus Plans Applied has various employee bonus plans. A discretionary bonus plan provides for the distribution of a percentage of pretax income to Applied employees who are not participants in other performance-based incentive plans, up to a maximum percentage of eligible compensation. Other plans provide for bonuses to Applied’s executives and other key contributors based on the achievement of profitability and/or other specified performance criteria. Charges under these plans were $269 million for fiscal 2013, $271 million for fiscal 2012, and $319 million charges for fiscal 2011. Employee Savings and Retirement Plan Applied’s Employee Savings and Retirement Plan (the 401(k) Plan) is qualified under Sections 401(a) and (k) of the Internal Revenue Code (the Code). Effective as of the close of the stock market on December 31, 2012, the Varian-sponsored 401(k) plan was merged with and into the 401(k) Plan, with the 401(k) Plan being the surviving plan. Eligible employees may make salary deferral and catch-up contributions under the 401(k) Plan on a pre-tax basis and/or (effective as of the first payroll period beginning on or after December 22, 2012) on a Roth basis, subject to an annual dollar limit established by the Code. Applied matches 100% of participant salary and/or Roth deferral contributions up to the first 3% of eligible contribution and then 50% of every dollar between 4% and 6% of eligible contribution. Applied does not make matching contributions on any catch-up contributions made by participants. Plan participants who were employed by Applied or any of its affiliates on or after January 1, 2010 became 100% vested in their Applied matching contribution account balances. Applied’s matching contributions under the 401(k) Plan were approximately $29 million, net of $1 million in forfeitures for fiscal 2013, $37 million for fiscal 2012 and $27 million for fiscal 2011. PART I Item 1: Business Incorporated in 1967, Applied, a Delaware corporation, provides manufacturing equipment, services and software to the global semiconductor, flat panel display, solar photovoltaic (PV) and related industries. Applied’s customers include manufacturers of semiconductor wafers and chips, flat panel liquid crystal and other displays, solar PV cells and modules, and other electronic devices. These customers may use what they manufacture in their own end products or sell the items to other companies for use in advanced electronic components. Applied’s fiscal year ends on the last Sunday in October. Applied operates in four reportable segments: Silicon Systems Group, Applied Global Services, Display, and Energy and Environmental Solutions. Applied manages its business based upon these segments. A summary of financial information for each reportable segment is found in Note 16 of Notes to Consolidated Financial Statements. A discussion of factors that could affect operations is set forth under “Risk Factors” in Item 1A, which is incorporated herein by reference. Net sales by reportable segment for the past three fiscal years were as follows:
<table><tr><td></td><td colspan="2">2014</td><td colspan="2">2013</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="6">(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$5,978</td><td>66%</td><td>$4,775</td><td>64%</td><td>$5,536</td><td>64%</td></tr><tr><td>Applied Global Services</td><td>2,200</td><td>24%</td><td>2,023</td><td>27%</td><td>2,285</td><td>26%</td></tr><tr><td>Display</td><td>615</td><td>7%</td><td>538</td><td>7%</td><td>473</td><td>5%</td></tr><tr><td>Energy and Environmental Solutions</td><td>279</td><td>3%</td><td>173</td><td>2%</td><td>425</td><td>5%</td></tr><tr><td>Total</td><td>$9,072</td><td>100%</td><td>$7,509</td><td>100%</td><td>$8,719</td><td>100%</td></tr></table>
Silicon Systems Group Segment The Silicon Systems Group segment develops, manufactures and sells manufacturing equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs). Most chips are built on a silicon wafer base and include a variety of circuit components, such as transistors and other devices, that are connected by multiple layers of wiring (interconnects). Applied offers systems that perform various processes used in chip fabrication, including chemical vapor deposition (CVD), physical vapor deposition (PVD), etch, electrochemical deposition (ECD), rapid thermal processing (RTP), ion implantation, chemical mechanical planarization (CMP), epitaxy (Epi), wet cleaning, atomic layer deposition (ALD), wafer metrology and inspection, and systems that etch or inspect circuit patterns on masks used in the photolithography process. Applied’s semiconductor manufacturing systems are used by integrated device manufacturers and foundries to build and package memory, logic and other types of chips. The majority of the Company's new equipment sales are for leading-edge technology for advanced 2X nanometer (nm) nodes and smaller dimensions. To build a chip, the transistors, capacitors and other circuit components are first created on the surface of the wafer by performing a series of processes to deposit and selectively remove portions of successive film layers. Similar processes are then used to build the layers of wiring structures on the wafer. As the density of the circuit components increases to enable greater computing capability in the same or smaller physical area, the complexity of building the chip also increases, necessitating more process steps to form smaller transistor structures and more intricate wiring schemes. Advanced chip designs require more than 500 steps involving these and other processes to complete the manufacturing cycle. APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following table summarizes information with respect to options outstanding and exercisable at October 26, 2014:
<table><tr><td></td><td colspan="4">Options Outstanding</td><td colspan="3">Options Exercisable</td></tr><tr><td>Range ofExercise Prices</td><td>Number ofShares (In millions)</td><td>WeightedAverageExercisePrice</td><td>WeightedAverageRemainingContractualLife (In years)</td><td>AggregateIntrinsicValue (In millions)</td><td>Number ofShares (In millions)</td><td>WeightedAverageExercisePrice</td><td>AggregateIntrinsicValue (In millions)</td></tr><tr><td>$3.36 — $9.99</td><td>1</td><td>$5.31</td><td>1.81</td><td>$12</td><td>1</td><td>$5.30</td><td>$12</td></tr><tr><td>$10.00 — $15.06</td><td>1</td><td>$14.96</td><td>5.59</td><td>7</td><td>—</td><td>$14.71</td><td>2</td></tr><tr><td></td><td>2</td><td>$10.87</td><td>3.99</td><td>$19</td><td>1</td><td>$7.97</td><td>$14</td></tr><tr><td>Options exercisable and expected to become exercisable</td><td>2</td><td>$10.87</td><td>3.99</td><td>$19</td><td></td><td></td><td></td></tr></table>
Option prices at the lower end of the range were principally attributable to stock options assumed in connection with the Varian acquisition in fiscal year 2012. Restricted Stock Units, Restricted Stock, Performance Shares and Performance Units Restricted stock units are converted into shares of Applied common stock upon vesting on a one-for-one basis. Restricted stock has the same rights as other issued and outstanding shares of Applied common stock except these shares generally have no right to dividends and are held in escrow until the award vests. Performance shares and performance units are awards that result in a payment to a grantee, generally in shares of Applied common stock on a one-for-one basis if performance goals and/or other vesting criteria established by the Human Resources and Compensation Committee of Applied's Board of Directors (the Committee) are achieved or the awards otherwise vest. Restricted stock units, restricted stock, performance shares and performance units typically vest over four years and vesting is usually subject to the grantee’s continued service with Applied and, in some cases, achievement of specified performance goals. The compensation expense related to the service-based awards is determined using the fair market value of Applied common stock on the date of the grant, and the compensation expense is recognized over the vesting period. Restricted stock, performance shares and performance units granted to certain executive officers are subject to the achievement of specified performance goals (performance-based awards). These performance-based awards become eligible to vest only if performance goals are achieved and then actually will vest only if the grantee remains employed by Applied through each applicable vesting date. These performance-based awards require the achievement of targeted levels of adjusted annual operating profit margin. For the fiscal 2013 performance-based awards, additional shares become eligible for time-based vesting if Applied achieves certain levels of total shareholder return (TSR) relative to a peer group, comprised of companies in the Standard & Poor's 500 Information Technology Index, measured at the end of a two-year period. The fair value of these performance-based awards is estimated on the date of grant and assumes that the specified performance goals will be achieved. If the goals are achieved, these awards vest over a specified remaining service period of generally three or four years, provided that the grantee remains employed by Applied through each scheduled vesting date. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost of each award is reflected over the service period and is reduced for estimated forfeitures. Fiscal 2012 was characterized by significant fluctuations in demand for semiconductor equipment, coupled with an extremely weak market environment for display and solar equipment. Applied completed its acquisition of Varian Semiconductor Equipment Associates, Inc. (Varian) in the first quarter of fiscal 2012. Mobility was the greatest influence on semiconductor industry spending in fiscal 2012. Investment levels for display equipment were low in fiscal 2012 due to decreased capacity requirements for larger flat panel televisions, while demand for mobility products, such as smartphones and tablets, significantly influenced equipment spending. In the solar industry, fiscal 2012 was characterized by excess manufacturing capacity, which led to significantly reduced demand for crystalline-silicon (c-Si) equipment, as well as weak operating performance and outlook. New Orders New orders by reportable segment for the past three fiscal years were as follows:
<table><tr><td></td><td colspan="2">2014</td><td>Change2014 over 2013</td><td colspan="2">2013</td><td>Change2013 over 2012</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="8">(In millions, except percentages)</td></tr><tr><td>Silicon Systems Group</td><td>$6,132</td><td>64%</td><td>11%</td><td>$5,507</td><td>65%</td><td>4%</td><td>$5,294</td><td>66%</td></tr><tr><td>Applied Global Services</td><td>2,433</td><td>25%</td><td>16%</td><td>2,090</td><td>25%</td><td>-8%</td><td>2,274</td><td>28%</td></tr><tr><td>Display</td><td>845</td><td>9%</td><td>20%</td><td>703</td><td>8%</td><td>157%</td><td>274</td><td>4%</td></tr><tr><td>Energy and Environmental Solutions</td><td>238</td><td>2%</td><td>43%</td><td>166</td><td>2%</td><td>-15%</td><td>195</td><td>2%</td></tr><tr><td>Total</td><td>$9,648</td><td>100%</td><td>14%</td><td>$8,466</td><td>100%</td><td>5%</td><td>$8,037</td><td>100%</td></tr></table>
New orders increased in fiscal 2014 from fiscal 2013 across all segments, primarily due to higher demand for semiconductor equipment, semiconductor spares and services, and display equipment. New orders for the Silicon Systems Group and Applied Global Services continued to comprise a majority of Applied's consolidated total new orders. New orders for fiscal 2013 increased compared to fiscal 2012, primarily due to a recovery in demand for display manufacturing equipment and increased demand in semiconductor equipment, partially offset by lower demand for service products, as well as depressed demand for c-Si solar equipment due to excess manufacturing capacity in the solar industry. New orders by geographic region, determined by the product shipment destination specified by the customer, were as follows:
<table><tr><td></td><td colspan="2">2014</td><td>Change2014 over 2013</td><td colspan="2">2013</td><td>Change2013 over 2012</td><td colspan="2">2012</td></tr><tr><td></td><td colspan="8">(In millions, except percentages)</td></tr><tr><td>Taiwan</td><td>$2,740</td><td>28%</td><td>-5%</td><td>$2,885</td><td>34%</td><td>34%</td><td>$2,155</td><td>27%</td></tr><tr><td>China</td><td>1,517</td><td>16%</td><td>13%</td><td>1,339</td><td>16%</td><td>232%</td><td>403</td><td>5%</td></tr><tr><td>Korea</td><td>1,086</td><td>11%</td><td>19%</td><td>915</td><td>11%</td><td>-49%</td><td>1,784</td><td>22%</td></tr><tr><td>Japan</td><td>1,031</td><td>11%</td><td>25%</td><td>822</td><td>10%</td><td>37%</td><td>600</td><td>7%</td></tr><tr><td>Southeast Asia</td><td>412</td><td>4%</td><td>17%</td><td>351</td><td>4%</td><td>24%</td><td>283</td><td>4%</td></tr><tr><td>Asia Pacific</td><td>6,786</td><td>70%</td><td>8%</td><td>6,312</td><td>75%</td><td>21%</td><td>5,225</td><td>65%</td></tr><tr><td>United States</td><td>2,200</td><td>23%</td><td>55%</td><td>1,419</td><td>17%</td><td>-29%</td><td>1,995</td><td>25%</td></tr><tr><td>Europe</td><td>662</td><td>7%</td><td>-10%</td><td>735</td><td>8%</td><td>-10%</td><td>817</td><td>10%</td></tr><tr><td>Total</td><td>$9,648</td><td>100%</td><td>14%</td><td>$8,466</td><td>100%</td><td>5%</td><td>$8,037</td><td>100%</td></tr></table>
The changes in new orders from customers in the United States, Japan, Taiwan and Korea for fiscal 2014 compared to fiscal 2013 primarily reflected changes in customers mix in the Silicon Systems Group, while the increase in new orders from China resulted from increased demand from display manufacturing equipment. The recovery in demand for display manufacturing equipment in fiscal 2013 led to the increase in new orders from customers in China. The change in the composition of new orders from customers in Taiwan, Korea, Japan and the United States was primarily related to changes in customer demand for semiconductor equipment. New Term Loan A Facility, with the remaining unpaid principal amount of loans under the New Term Loan A Facility due and payable in full at maturity on June 6, 2021. Principal amounts outstanding under the New Revolving Loan Facility are due and payable in full at maturity on June 6, 2021, subject to earlier repayment pursuant to the springing maturity date described above. In addition to paying interest on outstanding principal under the borrowings, we are obligated to pay a quarterly commitment fee at a rate determined by reference to a total leverage ratio, with a maximum commitment fee of 40% of the applicable margin for Eurocurrency loans. In July 2016, Breakaway Four, Ltd. , as borrower, and NCLC, as guarantor, entered into a Supplemental Agreement, which amended the Breakaway four loan to, among other things, increase the aggregate principal amount of commitments under the multi-draw term loan credit facility from €590.5 million to €729.9 million. In June 2016, we took delivery of Seven Seas Explorer. To finance the payment due upon delivery, we had export credit financing in place for 80% of the contract price. The associated $373.6 million term loan bears interest at 3.43% with a maturity date of June 30, 2028. Principal and interest payments shall be paid semiannually. In December 2016, NCLC issued $700.0 million aggregate principal amount of 4.750% senior unsecured notes due December 2021 (the ¡°Notes¡±) in a private offering (the ¡°Offering¡±) at par. NCLC used the net proceeds from the Offering, after deducting the initial purchasers¡¯ discount and estimated fees and expenses, together with cash on hand, to purchase its outstanding 5.25% senior notes due 2019 having an aggregate outstanding principal amount of $680 million. The redemption of the 5.25% senior notes due 2019 was completed in January 2017. NCLC will pay interest on the Notes at 4.750% per annum, semiannually on June 15 and December 15 of each year, commencing on June 15, 2017, to holders of record at the close of business on the immediately preceding June 1 and December 1, respectively. NCLC may redeem the Notes, in whole or part, at any time prior to December 15, 2018, at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest to, but not including, the redemption date and a ¡°make-whole premium. ¡± NCLC may redeem the Notes, in whole or in part, on or after December 15, 2018, at the redemption prices set forth in the indenture governing the Notes. At any time (which may be more than once) on or prior to December 15, 2018, NCLC may choose to redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 104.750% of the face amount thereof with an amount equal to the net proceeds of one or more equity offerings, so long as at least 60% of the aggregate principal amount of the Notes issued remains outstanding following such redemption. The indenture governing the Notes contains covenants that limit NCLC¡¯s ability (and its restricted subsidiaries¡¯ ability) to, among other things: (i) incur or guarantee additional indebtedness or issue certain preferred shares; (ii) pay dividends and make certain other restricted payments; (iii) create restrictions on the payment of dividends or other distributions to NCLC from its restricted subsidiaries; (iv) create liens on certain assets to secure debt; (v) make certain investments; (vi) engage in transactions with affiliates; (vii) engage in sales of assets and subsidiary stock; and (viii) transfer all or substantially all of its assets or enter into merger or consolidation transactions. The indenture governing the Notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium (if any), interest and other monetary obligations on all of the then-outstanding Notes to become due and payable immediately. Interest expense, net for the year ended December 31, 2016 was $276.9 million which included $34.7 million of amortization of deferred financing fees and a $27.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2015 was $221.9 million which included $36.7 million of amortization of deferred financing fees and a $12.7 million loss on extinguishment of debt. Interest expense, net for the year ended December 31, 2014 was $151.8 million which included $32.3 million of amortization of deferred financing fees and $15.4 million of expenses related to financing transactions in connection with the Acquisition of Prestige. Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of liquidity, as well as limit our net funded debt-to-capital ratio, maintain certain other ratios and restrict our ability to pay dividends. Substantially all of our ships and other property and equipment are pledged as collateral for certain of our debt. We believe we were in compliance with these covenants as of December 31, 2016. The following are scheduled principal repayments on long-term debt including capital lease obligations as of December 31, 2016 for each of the next five years (in thousands): |
-0.11091 | what is the growth rate in net reserves in 2005? | Development of prior year incurred losses was $135.6 million unfavorable in 2006, $26.4 million favorable in 2005 and $249.4 million unfavorable in 2004. Such losses were the result of the reserve development noted above, as well as inherent uncertainty in establishing loss and LAE reserves. Reserves for Asbestos and Environmental Losses and Loss Adjustment Expenses As of year end 2006, 7.4% of reserves reflect an estimate for the Company’s ultimate liability for A&E claims for which ultimate value cannot be estimated using traditional reserving techniques. The Company’s A&E liabilities stem from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. There are significant uncertainties in estimating the amount of the Company’s potential losses from A&E claims. See ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asbestos and Environmental Exposures” and Note 3 of Notes to Consolidated Financial Statements. Mt. McKinley’s book of direct A&E exposed insurance is relatively small and homogenous. It also arises from a limited period, effective 1978 to 1984. The book is based principally on excess liability policies, thereby limiting exposure analysis to a limited number of policies and forms. As a result of this focused structure, the Company believes that it is able to comprehensively analyze its exposures, allowing it to identify, analyze and actively monitor those claims which have unusual exposure, including policies in which it may be exposed to pay expenses in addition to policy limits or non-products asbestos claims. The Company endeavors to be actively engaged with every insured account posing significant potential asbestos exposure to Mt. McKinley. Such engagement can take the form of pursuing a final settlement, negotiation, litigation, or the monitoring of claim activity under Settlement in Place (“SIP”) agreements. SIP agreements generally condition an insurer’s payment upon the actual claim experience of the insured and may have annual payment caps or other measures to control the insurer’s payments. The Company’s Mt. McKinley operation is currently managing eight SIP agreements, three of which were executed prior to the acquisition of Mt. McKinley in 2000. The Company’s preference with respect to coverage settlements is to execute settlements that call for a fixed schedule of payments, because such settlements eliminate future uncertainty. The Company has significantly enhanced its classification of insureds by exposure characteristics over time, as well as its analysis by insured for those it considers to be more exposed or active. Those insureds identified as relatively less exposed or active are subject to less rigorous, but still active management, with an emphasis on monitoring those characteristics, which may indicate an increasing exposure or levels of activity. The Company continually focuses on further enhancement of the detailed estimation processes used to evaluate potential exposure of policyholders, including those that may not have reported significant A&E losses. Everest Re’s book of assumed reinsurance is relatively concentrated within a modest number of A&E exposed relationships. It also arises from a limited period, effectively 1977 to 1984. Because the book of business is relatively concentrated and the Company has been managing the A&E exposures for many years, its claim staff is familiar with the ceding companies that have generated most of these liabilities in the past and which are therefore most likely to generate future liabilities. The Company’s claim staff has developed familiarity both with the nature of the business written by its ceding companies and the claims handling and reserving practices of those companies. This level of familiarity enhances the quality of the Company’s analysis of its exposure through those companies. As a result, the Company believes that it can identify those claims on which it has unusual exposure, such as non-products asbestos claims, for concentrated attention. However, in setting reserves for its reinsurance liabilities, the Company relies on claims data supplied, both formally and informally by its ceding companies and brokers. This furnished information is not always timely or accurate and can impact the accuracy and timeliness of the Company’s ultimate loss projections. The following table summarizes the composition of the Company’s total reserves for A&E losses, gross and net of reinsurance, for the years ended December 31:
<table><tr><td>(Dollars in millions)</td><td>2006</td><td>2005</td><td>2004</td></tr><tr><td>Case reserves reported by ceding companies</td><td>$135.6</td><td>$125.2</td><td>$148.5</td></tr><tr><td>Additional case reserves established by the Company (assumed reinsurance) (1)</td><td>152.1</td><td>157.6</td><td>151.3</td></tr><tr><td>Case reserves established by the Company (direct insurance)</td><td>213.7</td><td>243.5</td><td>272.1</td></tr><tr><td>Incurred but not reported reserves</td><td>148.7</td><td>123.3</td><td>156.4</td></tr><tr><td>Gross reserves</td><td>650.1</td><td>649.6</td><td>728.3</td></tr><tr><td>Reinsurance receivable</td><td>-138.7</td><td>-199.1</td><td>-221.6</td></tr><tr><td>Net reserves</td><td>$511.4</td><td>$450.5</td><td>$506.7</td></tr></table>
(1) Additional reserves are case specific reserves determined by the Company to be needed over and above those reported by the ceding company Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated.
<table><tr><td></td><td colspan="9">Years Ended December 31,</td></tr><tr><td>(Dollars in millions)</td><td>Current Year</td><td colspan="2">Ratio %/ Pt Change</td><td>Prior Years</td><td colspan="2">Ratio %/ Pt Change</td><td>Total Incurred</td><td colspan="2">Ratio %/ Pt Change</td></tr><tr><td>2016</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$899.9</td><td>69.7%</td><td></td><td>$173.6</td><td>13.4%</td><td></td><td>$1,073.5</td><td>83.1%</td><td></td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8%</td><td></td><td>-0.2</td><td>0.0%</td><td></td><td>49.2</td><td>3.8%</td><td></td></tr><tr><td>Total segment</td><td>$949.3</td><td>73.5%</td><td></td><td>$173.4</td><td>13.4%</td><td></td><td>$1,122.7</td><td>86.9%</td><td></td></tr><tr><td>2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.1</td><td>12.0%</td><td></td><td>$1,033.2</td><td>81.6%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$881.2</td><td>69.6%</td><td></td><td>$152.2</td><td>12.0%</td><td></td><td>$1,033.3</td><td>81.6%</td><td></td></tr><tr><td>2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$786.5</td><td>76.4%</td><td></td><td>$24.9</td><td>2.4%</td><td></td><td>$811.3</td><td>78.8%</td><td></td></tr><tr><td>Catastrophes</td><td>-</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td><td>0.1</td><td>0.0%</td><td></td></tr><tr><td>Total segment</td><td>$786.5</td><td>76.4%</td><td></td><td>$25.0</td><td>2.4%</td><td></td><td>$811.4</td><td>78.8%</td><td></td></tr><tr><td>Variance 2016/2015</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$18.7</td><td>0.1</td><td>pts</td><td>$21.5</td><td>1.4</td><td>pts</td><td>$40.3</td><td>1.5</td><td>pts</td></tr><tr><td>Catastrophes</td><td>49.4</td><td>3.8</td><td>pts</td><td>-0.3</td><td>-</td><td>pts</td><td>$49.1</td><td>3.8</td><td>pts</td></tr><tr><td>Total segment</td><td>$68.1</td><td>3.9</td><td>pts</td><td>$21.2</td><td>1.4</td><td>pts</td><td>$89.4</td><td>5.3</td><td>pts</td></tr><tr><td>Variance 2015/2014</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Attritional</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td>Catastrophes</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td><td>-</td><td>-</td><td>pts</td></tr><tr><td>Total segment</td><td>$94.7</td><td>-6.8</td><td>pts</td><td>$127.2</td><td>9.6</td><td>pts</td><td>$221.9</td><td>2.8</td><td>pts</td></tr><tr><td colspan="2">(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Incurred losses and LAE increased by 8.7% to $1,122.7 million in 2016 compared to $1,033.3 million in 2015 mainly due to an increase of $49.4 million in current year catastrophe losses, an increase of $21.5 million in prior years’ attritional losses mainly related to run-off construction liability and umbrella program business and an increase of $18.7 million in current year attritional losses primarily related to the impact of the increase in premiums earned. The $49.4 million of current year catastrophe losses in 2016 were due to the 2016 U. S. storms ($30.0 million), Hurricane Matthew ($11.0 million) and the Fort McMurray Canada wildfire ($8.4 million). There were no current year catastrophe losses in 2015. Incurred losses and LAE increased by 27.3% to $1,033.3 million in 2015 compared to $811.4 million in 2014, mainly due to an increase of $127.2 million in prior years’ attritional losses related to run-off umbrella program and construction liability business and an increase of $94.7 million in current year attritional losses related primarily to the impact of the increase in premiums earned. There were no current year catastrophe losses in 2015 and 2014. Segment Expenses. Commission and brokerage increased by 16.5% to $205.3 million in 2016 compared to $176.2 million in 2015. The increase was mainly due to the impact of the increase in premiums earned and changes in the mix of business. Segment other underwriting expenses increased to $176.8 million in 2016 compared to $136.7 million in 2015. The increase was primarily due to increased expenses due to the build out of our insurance platform. Commission and brokerage increased by 17.7% to $176.2 million in 2015 compared to $149.8 million in 2014. The increase was primarily driven by the impact of the increase in premiums earned and the change in the mix of business. Segment other underwriting expenses increased to $136.7 million in 2015 compared to $118.0 million in 2014. The increase was primarily due to the impact of the increase in premiums earned and increased focus on insurance operations resulting in increased operating expenses, including new hires. properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure. Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves and such variation could have a material adverse effect on our financial condition, results of operations and/or cash flows. See also ITEM 8, “Financial Statements and Supplementary Data” - Notes 1 and 3 of Notes to the Consolidated Financial Statements. Reinsurance Receivables. We have purchased reinsurance to reduce our exposure to adverse claim experience, large claims and catastrophic loss occurrences. Our ceded reinsurance provides for recovery from reinsurers of a portion of losses and loss expenses under certain circumstances. Such reinsurance does not relieve us of our obligation to our policyholders. In the event our reinsurers are unable to meet their obligations under these agreements or are able to successfully challenge losses ceded by us under the contracts, we will not be able to realize the full value of the reinsurance receivable balance. To minimize exposure from uncollectible reinsurance receivables, we have a reinsurance security committee that evaluates the financial strength of each reinsurer prior to our entering into a reinsurance arrangement. In some cases, we may hold full or partial collateral for the receivable, including letters of credit, trust assets and cash. Additionally, creditworthy foreign reinsurers of business written in the U. S. , as well as capital markets’ reinsurance mechanisms, are generally required to secure their obligations. We have established reserves for uncollectible balances based on our assessment of the collectability of the outstanding balances. As of December 31, 2016 and 2015, the reserve for uncollectible balances was $15.0 million. Actual uncollectible amounts may vary, perhaps substantially, from such reserves, impacting income (loss) in the period in which the change in reserves is made. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 11 of Notes to the Consolidated Financial Statements and “Financial Condition – Reinsurance Receivables” below. Premiums Written and Earned. Premiums written by us are earned ratably over the coverage periods of the related insurance and reinsurance contracts. We establish unearned premium reserves to cover the unexpired portion of each contract. Such reserves, for assumed reinsurance, are computed using pro rata methods based on statistical data received from ceding companies. Premiums earned, and the related costs, which have not yet been reported to us, are estimated and accrued. Because of the inherent lag in the reporting of written and earned premiums by our ceding companies, we use standard accepted actuarial methodologies to estimate earned but not reported premium at each financial reporting date. These earned but not reported premiums are combined with reported earned premiums to comprise our total premiums earned for determination of our incurred losses and loss and LAE reserves. Commission expense and incurred losses related to the change in earned but not reported premium are included in current period company and segment financial results. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements. The following table displays the estimated components of net earned but not reported premiums by segment for the periods indicated.
<table><tr><td></td><td colspan="3">At December 31,</td></tr><tr><td>(Dollars in millions)</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>U.S. Reinsurance</td><td>$385.5</td><td>$372.5</td><td>$388.3</td></tr><tr><td>International</td><td>235.4</td><td>243.9</td><td>239.8</td></tr><tr><td>Bermuda</td><td>258.4</td><td>253.4</td><td>208.4</td></tr><tr><td>Total</td><td>$879.3</td><td>$869.8</td><td>$836.5</td></tr><tr><td>(Some amounts may not reconcile due to rounding.)</td><td></td><td></td><td></td></tr></table> |
0.13043 | by how much did the allowance for doubtful accounts increase from 2005 to 2006? | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 93 Note 3—Financial Instruments (Continued) Accounts Receivable Trade Receivables The Company distributes its products through third-party distributors and resellers and directly to certain education, consumer, and commercial customers. The Company generally does not require collateral from its customers; however, the Company will require collateral in certain instances to limit credit risk. In addition, when possible, the Company does attempt to limit credit risk on trade receivables with credit insurance for certain customers in Latin America, Europe, Asia, and Australia and by arranging with third- party financing companies to provide flooring arrangements and other loan and lease programs to the Company’s direct customers. These credit-financing arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements. However, considerable trade receivables that are not covered by collateral, third-party flooring arrangements, or credit insurance are outstanding with the Company’s distribution and retail channel partners. No customer accounted for more than 10% of trade receivables as of September 30, 2006 or September 24, 2005. The following table summarizes the activity in the allowance for doubtful accounts (in millions):
<table><tr><td></td><td>September 30, 2006</td><td>September 24, 2005</td><td>September 25, 2004</td></tr><tr><td>Beginning allowance balance</td><td>$46</td><td>$47</td><td>$49</td></tr><tr><td>Charged to costs and expenses</td><td>17</td><td>8</td><td>3</td></tr><tr><td>Deductions(a)</td><td>-11</td><td>-9</td><td>-5</td></tr><tr><td>Ending allowance balance</td><td>$52</td><td>$46</td><td>$47</td></tr></table>
(a) Represents amounts written off against the allowance, net of recoveries. Vendor Non-Trade Receivables The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of raw material components to these manufacturing vendors who manufacture sub-assemblies or assemble final products for the Company. The Company purchases these raw material components directly from suppliers. These non-trade receivables, which are included in the consolidated balance sheets in other current assets, totaled $1.6 billion and $417 million as of September 30, 2006 and September 24, 2005, respectively. The Company does not reflect the sale of these components in net sales and does not recognize any profits on these sales until the products are sold through to the end customer at which time the profit is recognized as a reduction of cost of sales. Derivative Financial Instruments The Company uses derivatives to partially offset its business exposure to foreign exchange risk. Foreign currency forward and option contracts are used to offset the foreign exchange risk on certain existing assets and liabilities and to hedge the foreign exchange risk on expected future cash flows on certain forecasted revenue and cost of sales. From time to time, the Company enters into interest rate derivative agreements to modify the interest rate profile of certain investments and debt. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments. The Company records all derivatives on the balance sheet at fair value. CBRE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) outstanding according to their terms, and we will continue to issue shares to the extent required under the terms of such outstanding awards. Shares underlying awards that expire, terminate or lapse under the 2004 stock incentive plan will become available for grant under the 2012 equity incentive plan.2012 Equity Incentive Plan. Our 2012 equity incentive plan was adopted by our board of directors and approved by our stockholders on May 8, 2012. The 2012 equity incentive plan authorizes the grant of stockbased awards to our employees, directors or independent contractors. Unless terminated earlier, the 2012 equity incentive plan will terminate on February 13, 2022. A total of 16,000,000 shares of our Class A common stock plus 2,205,887 unissued shares that remained under the 2004 stock incentive plan were reserved for issuance under the 2012 equity incentive plan. Additionally, shares underlying awards that expire, terminate or lapse under the 2012 equity incentive plan or under the 2004 stock incentive plan will become available for issuance under the 2012 equity incentive plan. No person is eligible to be granted performance-based awards in the aggregate covering more than 3,300,000 shares during any fiscal year or cash awards in excess of $5,000,000 for any fiscal year. The number of shares issued or reserved pursuant to the 2012 equity incentive plan, or pursuant to outstanding awards, is subject to adjustment on account of a stock split of our outstanding shares, stock dividend, dividend payable in a form other than shares in an amount that has a material effect on the price of the shares, consolidation, combination or reclassification of the shares, recapitalization, spin-off, or other similar occurrence. Stock options and stock appreciation rights granted under the 2012 equity incentive plan are subject to a maximum term of ten years from the date of grant. Restricted share and restricted stock unit awards that have only time-based service vesting conditions are generally subject to a minimum three year vesting schedule. Restricted share and restricted stock unit awards that have performance-based vesting conditions are generally subject to a minimum one year vesting schedule. As of December 31, 2014, assuming the maximum number of shares under our performance-based awards will later be issued (as further described under “Equity Compensation Plan Information” below), 12,163,174 shares remained available for future grants under this plan. Stock Options As of December 31, 2014, no shares were subject to options issued under our 2012 equity incentive plan. No options were granted during the years ended December 31, 2014, 2013 and 2012. All options that have been granted under the 2004 stock incentive plan have a term of five or seven years from the date of grant. A summary of the status of our outstanding stock options is presented in the tables below:
<table><tr><td></td><td>Shares</td><td> Weighted Average Exercise Price</td></tr><tr><td>Outstanding at December 31, 2011</td><td>4,792,409</td><td>$8.95</td></tr><tr><td>Exercised</td><td>-1,930,092</td><td>10.31</td></tr><tr><td>Forfeited</td><td>-33,381</td><td>10.73</td></tr><tr><td>Expired</td><td>-17,997</td><td>14.36</td></tr><tr><td>Outstanding at December 31, 2012</td><td>2,810,939</td><td>$7.93</td></tr><tr><td>Exercised</td><td>-1,620,515</td><td>3.45</td></tr><tr><td>Forfeited</td><td>-2,009</td><td>13.85</td></tr><tr><td>Expired</td><td>-39,666</td><td>23.08</td></tr><tr><td>Outstanding at December 31, 2013</td><td>1,148,749</td><td>$13.60</td></tr><tr><td>Exercised</td><td>-458,505</td><td>13.81</td></tr><tr><td>Expired</td><td>-11,906</td><td>33.03</td></tr><tr><td>Outstanding at December 31, 2014</td><td>678,338</td><td>$13.21</td></tr><tr><td>Vested and expected to vest at December 31, 2014</td><td>678,338</td><td>$13.21</td></tr><tr><td>Exercisable at December 31, 2014</td><td>678,338</td><td>$13.21</td></tr></table>
Due to the constantly changing currency exposures to which we are subject and the volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations upon future operating results. In addition, fluctuations in currencies relative to the U. S. dollar may make it more difficult to perform period-to-period comparisons of our reported results of operations. Our international operations also are subject to, among other things, political instability and changing regulatory environments, which affects the currency markets and which as a result may adversely affect our future financial condition and results of operations. We routinely monitor these risks and related costs and evaluate the appropriate amount of oversight to allocate towards business activities in foreign countries where such risks and costs are particularly significant. Results of Operations The following table sets forth items derived from our consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 (dollars in thousands):
<table><tr><td></td><td colspan="6"> Year Ended December 31,</td></tr><tr><td></td><td colspan="2">2016</td><td colspan="2">2015</td><td colspan="2"> 2014</td></tr><tr><td>Revenue:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fee revenue</td><td>$8,717,126</td><td>66.7%</td><td>$7,730,337</td><td>71.2%</td><td>$6,791,292</td><td>75.0%</td></tr><tr><td>Pass through costs also recognized as revenue</td><td>4,354,463</td><td>33.3%</td><td>3,125,473</td><td>28.8%</td><td>2,258,626</td><td>25.0%</td></tr><tr><td>Total revenue</td><td>13,071,589</td><td>100.0%</td><td>10,855,810</td><td>100.0%</td><td>9,049,918</td><td>100.0%</td></tr><tr><td>Costs and expenses:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cost of services</td><td>9,123,727</td><td>69.8%</td><td>7,082,932</td><td>65.2%</td><td>5,611,262</td><td>62.0%</td></tr><tr><td>Operating, administrative and other</td><td>2,781,310</td><td>21.3%</td><td>2,633,609</td><td>24.3%</td><td>2,438,960</td><td>27.0%</td></tr><tr><td>Depreciation and amortization</td><td>366,927</td><td>2.8%</td><td>314,096</td><td>2.9%</td><td>265,101</td><td>2.9%</td></tr><tr><td>Total costs and expenses</td><td>12,271,964</td><td>93.9%</td><td>10,030,637</td><td>92.4%</td><td>8,315,323</td><td>91.9%</td></tr><tr><td>Gain on disposition of real estate</td><td>15,862</td><td>0.1%</td><td>10,771</td><td>0.1%</td><td>57,659</td><td>0.7%</td></tr><tr><td>Operating income</td><td>815,487</td><td>6.2%</td><td>835,944</td><td>7.7%</td><td>792,254</td><td>8.8%</td></tr><tr><td>Equity income from unconsolidated subsidiaries</td><td>197,351</td><td>1.5%</td><td>162,849</td><td>1.5%</td><td>101,714</td><td>1.1%</td></tr><tr><td>Other income (loss)</td><td>4,688</td><td>—</td><td>-3,809</td><td>—</td><td>12,183</td><td>0.1%</td></tr><tr><td>Interest income</td><td>8,051</td><td>0.1%</td><td>6,311</td><td>—</td><td>6,233</td><td>0.1%</td></tr><tr><td>Interest expense</td><td>144,851</td><td>1.1%</td><td>118,880</td><td>1.1%</td><td>112,035</td><td>1.2%</td></tr><tr><td>Write-offof financing costs on extinguished debt</td><td>—</td><td>—</td><td>2,685</td><td>—</td><td>23,087</td><td>0.3%</td></tr><tr><td>Income before provision for income taxes</td><td>880,726</td><td>6.7%</td><td>879,730</td><td>8.1%</td><td>777,262</td><td>8.6%</td></tr><tr><td>Provision for income taxes</td><td>296,662</td><td>2.2%</td><td>320,853</td><td>3.0%</td><td>263,759</td><td>2.9%</td></tr><tr><td>Net income</td><td>584,064</td><td>4.5%</td><td>558,877</td><td>5.1%</td><td>513,503</td><td>5.7%</td></tr><tr><td>Less: Net income attributable tonon-controllinginterests</td><td>12,091</td><td>0.1%</td><td>11,745</td><td>0.1%</td><td>29,000</td><td>0.3%</td></tr><tr><td>Net income attributable to CBRE Group, Inc.</td><td>$571,973</td><td>4.4%</td><td>$547,132</td><td>5.0%</td><td>$484,503</td><td>5.4%</td></tr><tr><td>EBITDA</td><td>$1,372,362</td><td>10.5%</td><td>$1,297,335</td><td>12.0%</td><td>$1,142,252</td><td>12.6%</td></tr><tr><td>Adjusted EBITDA</td><td>$1,561,003</td><td>11.9%</td><td>$1,412,724</td><td>13.0%</td><td>$1,166,125</td><td>12.9%</td></tr></table>
Fee revenue, EBITDA and adjusted EBITDA are not recognized measurements under GAAP. When analyzing our operating performance, investors should use these measures in addition to, and not as an alternative for, their most directly comparable financial measure calculated and presented in accordance with GAAP. We CBRE GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 82 In March 2011, we entered into five interest rate swap agreements, all with effective dates in October 2011, and immediately designated them as cash flow hedges in accordance with FASB ASC Topic 815. The purpose of these interest rate swap agreements is to attempt to hedge potential changes to our cash flows due to the variable interest nature of our senior term loan facilities. The total notional amount of these interest rate swap agreements is $400.0 million, with $200.0 million having expired in October 2017 and $200.0 million expiring in September 2019. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. There was no significant hedge ineffectiveness for the years ended December 31, 2017, 2016 and 2015. The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive loss on the balance sheet and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. We reclassified $7.4 million, $10.7 million and $11.9 million for the years ended December 31, 2017, 2016, and 2015, respectively, from accumulated other comprehensive loss to interest expense. During the next twelve months, we estimate that $3.1 million will be reclassified from accumulated other comprehensive loss to interest expense. In addition, we recorded a net gain of $0.9 million, and net losses of $2.4 million and $6.5 million for the years ended December 31, 2017, 2016 and 2015, respectively, to other comprehensive loss in relation to such interest rate swap agreements. As of December 31, 2017 and 2016, the fair values of such interest rate swap agreements were reflected as a $4.8 million liability and a $13.2 million liability, respectively, and were included in other liabilities in the accompanying consolidated balance sheets. Additionally, our foreign operations expose us to fluctuations in foreign exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional (reporting) currency, which is U. S. dollars. We enter into derivative financial instruments to attempt to protect the value or fix the amount of certain obligations in terms of our reporting currency, the U. S. dollar. In March 2014, we began a foreign currency exchange forward hedging program by entering into foreign currency exchange forward contracts, including agreements to buy U. S. dollars and sell Australian dollars, British pound sterling, Canadian dollars, euros and Japanese yen. The purpose of these forward contracts was to attempt to mitigate the risk of fluctuations in foreign currency exchange rates that would adversely impact some of our foreign currency denominated EBITDA. Hedge accounting was not elected for any of these contracts. As such, changes in the fair values of these contracts were recorded directly in earnings. As of December 31, 2017 and 2016, we had no foreign currency exchange forward contracts outstanding as the program expired in December 2016. Included in the consolidated statement of operations were net gains of $7.7 million and $24.2 million for the years ended December 31, 2016 and 2015, respectively, resulting from net gains on foreign currency exchange forward contracts. We also routinely monitor our exposure to currency exchange rate changes in connection with certain transactions and sometimes enter into foreign currency exchange option and forward contracts to limit our exposure to such transactions, as appropriate. In the ordinary course of business, we also sometimes utilize derivative financial instruments in the form of foreign currency exchange contracts to attempt to mitigate foreign currency exchange exposure resulting from intercompany loans. The net impact on our financial position and earnings resulting from these foreign currency exchange forward and options contracts has not been significant.8. Property and Equipment Property and equipment consists of the following (dollars in thousands) |
1,190 | What's the sum of the Municipal bonds for Available-for-sale debt securities for TotalFair Value in the years where Total segment revenu is greater than 1700? (in million) | higher in the fiscal 2013 period, including about $100 million for higher staffing expenses, about $60 million for higher advertising and other marketing program expenses, and about $23 million for higher share-based compensation expenses. See “Cost of Revenue” and “Operating Expenses” later in this Item 7 for more information. Net income from continuing operations increased 8% in fiscal 2013 compared with fiscal 2012 due to higher operating income and lower interest expense due to the repayment of debt in March 2012. Diluted net income per share from continuing operations for fiscal 2013 increased 8% to $2.72, in line with the increase in net income compared with fiscal 2012. Segment Results The information below is organized in accordance with our three reportable segments. All of our segments operate primarily in the United States and sell primarily to customers in the United States. International total net revenue was approximately 5% of consolidated total net revenue for all periods presented. Segment operating income is segment net revenue less segment cost of revenue and operating expenses. Segment expenses do not include certain costs, such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses, which are not allocated to specific segments. These unallocated costs totaled $890 million in fiscal 2014, $809 million in fiscal 2013, and $724 million in fiscal 2012. Unallocated costs increased in fiscal 2014 compared with fiscal 2013 and in fiscal 2013 compared with fiscal 2012 due to increases in corporate product development and selling and marketing expenses in support of the growth of our businesses and to a lesser extent due to increases in share-based compensation expenses. Segment expenses also do not include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges. See Note 14 to the financial statements in Item 8 of this Annual Report for reconciliations of total segment operating income to consolidated operating income from continuing operations for each fiscal year presented. We calculate revenue growth rates and segment operating margin figures using dollars in thousands. Those results may vary slightly from figures calculated using the dollars in millions presented. Small Business
<table><tr><td>(Dollars in millions)</td><td>Fiscal2014</td><td>Fiscal2013</td><td>Fiscal2012</td><td>2014-2013% Change</td><td>2013-2012% Change</td></tr><tr><td>Product revenue</td><td>$851</td><td>$849</td><td>$811</td><td></td><td></td></tr><tr><td>Service and other revenue</td><td>1,402</td><td>1,208</td><td>968</td><td></td><td></td></tr><tr><td>Total segment revenue</td><td>$2,253</td><td>$2,057</td><td>$1,779</td><td>10%</td><td>16%</td></tr><tr><td>% of total revenue</td><td>50%</td><td>49%</td><td>47%</td><td></td><td></td></tr><tr><td>Segment operating income</td><td>$843</td><td>$800</td><td>$712</td><td>5%</td><td>13%</td></tr><tr><td>% of related revenue</td><td>37%</td><td>39%</td><td>40%</td><td></td><td></td></tr></table>
Service and other revenue in our Small Business segment is derived primarily from QuickBooks Online and QuickBooks Online Accountant, our hosted financial and business management offerings; QuickBooks Pro Plus, QuickBooks Premier Plus, and QuickBooks Accountant Plus, our subscription offerings; QuickBooks technical support plans; small business payroll services, including Quickbooks Online Payroll, Intuit Online Payroll, Intuit Full Service Payroll, and QuickBooks Assisted Payroll; payment processing services for small businesses; Demandforce; and QuickBase. Product revenue in our Small Business segment is derived primarily from QuickBooks desktop software products, including QuickBooks Pro, QuickBooks Premier, QuickBooks Accountant, and QuickBooks Enterprise Solutions; QuickBooks Basic Payroll and QuickBooks Enhanced Payroll; QuickBooks Point of Sale solutions; ProAdvisor Program subscriptions for the accounting professionals who serve small businesses; and financial supplies. As part of our connected services strategy, over the past several quarters we have been focusing Small Business segment resources on the enhancement and marketing of our QuickBooks Online and QuickBooks desktop subscription offerings. As a result, QuickBooks desktop license units and revenue have been declining as more customers choose our hosted and subscription offerings and we expect this trend to continue. In our payments business we have recently begun focusing resources on core offerings for QuickBooks merchants in support of our small business ecosystem approach. Over the next few quarters we anticipate declining revenue for certain non-QuickBooks payments offerings that may slow overall revenue growth in our payments business. Fiscal 2014 Compared with Fiscal 2013 Small Business segment total net revenue increased $196 million or 10% in fiscal 2014 compared with fiscal 2013. Customer acquisition in our Small Business Online Ecosystem continued to drive Small Business segment revenue growth in fiscal 2014. QuickBooks Online customers grew 40%, online payroll customers grew 25%, and active online payments customers grew 4%. Online payments charge volume was 24% higher in fiscal 2014 compared with fiscal 2013. Annualized recurring revenue (ARR) for our Small Business Online Ecosystem grew 34% in fiscal 2014 compared with fiscal 2013. In our Small Business Desktop Ecosystem, revenue from QuickBooks desktop software licenses declined 9% on 10% lower unit sales while revenue from QuickBooks Enterprise Solutions grew 25% and revenue from QuickBooks Plus subscriptions grew 16% in fiscal 2014. Revenue for certain non-core payments offerings was lower in fiscal 2014. Small Business segment operating income as a percentage of related revenue decreased in fiscal 2014 compared with fiscal 2013. The increase in segment revenue described above was partially offset by $73 million in higher staffing expenses due to an increase in headcount and $35 million in higher advertising and other marketing program expenses. Fiscal 2013 Compared with Fiscal 2012 Small Business segment total net revenue increased $278 million or 16% in fiscal 2013 compared with fiscal 2012. When adjusted to exclude revenue from Demandforce, which we acquired in May 2012, Small Business segment revenue was 12% higher in fiscal 2013. Customer acquisition in our Small Business Online Ecosystem drove organic Small Business segment revenue growth in fiscal 2013. QuickBooks Online customers grew 28%, online payroll customers grew 18%, and active online payments customers grew 21%. Online payments charge volume was 37% higher in fiscal 2013 compared with fiscal 2012. In our Small Business Desktop Ecosystem, revenue from QuickBooks desktop software licenses was flat on 6% lower unit sales while revenue from QuickBooks Enterprise Solutions grew 10% and revenue from QuickBooks Plus subscriptions more than doubled in fiscal 2013. Small Business segment operating income as a percentage of related revenue decreased slightly in fiscal 2013 compared with fiscal 2012. The increase in segment revenue described above was partially offset by higher segment costs and expenses that included costs and expenses for Demandforce. Fiscal 2013 staffing expenses were about $100 million higher, driven by an increase in headcount. Advertising and other marketing program expenses also increased. Consumer
<table><tr><td>(Dollars in millions)</td><td>Fiscal2014</td><td>Fiscal2013</td><td>Fiscal2012</td><td>2014-2013% Change</td><td>2013-2012% Change</td></tr><tr><td>Product revenue</td><td>$309</td><td>$324</td><td>$334</td><td></td><td></td></tr><tr><td>Service and other revenue</td><td>1,522</td><td>1,384</td><td>1,307</td><td></td><td></td></tr><tr><td>Total segment revenue</td><td>$1,831</td><td>$1,708</td><td>$1,641</td><td>7%</td><td>4%</td></tr><tr><td>% of total revenue</td><td>41%</td><td>41%</td><td>43%</td><td></td><td></td></tr><tr><td>Segment operating income</td><td>$1,139</td><td>$1,035</td><td>$965</td><td>10%</td><td>7%</td></tr><tr><td>% of related revenue</td><td>62%</td><td>61%</td><td>59%</td><td></td><td></td></tr></table>
Our Consumer segment includes our Consumer Tax and Consumer Ecosystem product lines. Consumer Tax service and other revenue is derived primarily from TurboTax Online tax return preparation services and electronic tax filing services. Consumer Tax product revenue is derived primarily from TurboTax desktop tax return preparation software. Consumer Ecosystem product revenue is derived primarily from Quicken desktop personal finance software products. Consumer Ecosystem service and other revenue is derived primarily from mobile and online consumer finance offerings as well as from online lead generation fees from our Mint personal finance offerings. 2. Fair Value Measurements Fair Value Hierarchy The authoritative guidance defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market for an asset or liability and assumptions that market participants would use when pricing the asset or liability. In addition, we consider and use all valuation methods that are appropriate in estimating the fair value of an asset or liability. The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows: ? Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. ? Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices in active markets for similar assets or liabilities: quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities. ? Level 3 uses one or more unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above.
<table><tr><td></td><td colspan="4">At July 31, 2014</td><td colspan="4">At July 31, 2013</td></tr><tr><td>(In millions)</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>TotalFair Value</td><td>Level 1</td><td>Level 2</td><td>Level 3</td><td>TotalFair Value</td></tr><tr><td>Assets:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash equivalents, primarily money market funds</td><td>$652</td><td>$—</td><td>$—</td><td>$652</td><td>$917</td><td>$—</td><td>$—</td><td>$917</td></tr><tr><td>Available-for-sale debt securities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Municipal bonds</td><td>—</td><td>701</td><td>—</td><td>701</td><td>—</td><td>489</td><td>—</td><td>489</td></tr><tr><td>Municipal auction rate securities</td><td>—</td><td>—</td><td>21</td><td>21</td><td>—</td><td>—</td><td>33</td><td>33</td></tr><tr><td>Corporate notes</td><td>—</td><td>466</td><td>—</td><td>466</td><td>—</td><td>269</td><td>—</td><td>269</td></tr><tr><td>U.S. agency securities</td><td>—</td><td>42</td><td>—</td><td>42</td><td>—</td><td>69</td><td>—</td><td>69</td></tr><tr><td>Available-for-sale corporate equity securities</td><td>—</td><td>—</td><td>—</td><td>—</td><td>33</td><td>—</td><td>—</td><td>33</td></tr><tr><td>Total available-for-sale securities</td><td>—</td><td>1,209</td><td>21</td><td>1,230</td><td>33</td><td>827</td><td>33</td><td>893</td></tr><tr><td>Total assets measured at fair value on a recurring basis</td><td>$652</td><td>$1,209</td><td>$21</td><td>$1,882</td><td>$950</td><td>$827</td><td>$33</td><td>$1,810</td></tr><tr><td>Liabilities:</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Senior notes -1</td><td>$—</td><td>$556</td><td>$—</td><td>$556</td><td>$—</td><td>$560</td><td>$—</td><td>$560</td></tr></table>
(1) Carrying value on our balance sheets at July 31, 2014 was $499 million and at July 31, 2013 was $499 million. See Note 9. Table of Contents VALERO ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Commodity Price Risk We are exposed to market risks related to the volatility in the price of crude oil, refined products (primarily gasoline and distillate), grain (primarily corn), and natural gas used in our operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, including futures, swaps, and options. We use the futures markets for the available liquidity, which provides greater flexibility in transacting our hedging and trading operations. We use swaps primarily to manage our price exposure. Our positions in commodity derivative instruments are monitored and managed on a daily basis by a risk control group to ensure compliance with our stated risk management policy that has been approved by our board of directors. For risk management purposes, we use fair value hedges, cash flow hedges, and economic hedges. In addition to the use of derivative instruments to manage commodity price risk, we also enter into certain commodity derivative instruments for trading purposes. Our objective for entering into each type of hedge or trading derivative is described below. Fair Value Hedges Fair value hedges are used to hedge price volatility in certain refining inventories and firm commitments to purchase inventories. The level of activity for our fair value hedges is based on the level of our operating inventories, and generally represents the amount by which our inventories differ from our previous year-end LIFO inventory levels. As of December 31, 2012, we had the following outstanding commodity derivative instruments that were entered into to hedge crude oil and refined product inventories and commodity derivative instruments related to the physical purchase of crude oil and refined products at a fixed price. The information presents the notional volume of outstanding contracts by type of instrument and year of maturity (volumes in thousands of barrels). |
100.5 | what was the average for "other" loans held in 2012 and 2011? | Financial derivatives involve, to varying degrees, interest rate, market and credit risk. For interest rate swaps and total return swaps, options and futures contracts, only periodic cash payments and, with respect to options, premiums are exchanged. Therefore, cash requirements and exposure to credit risk are significantly less than the notional amount on these instruments. Further information on our financial derivatives is presented in Note 1 Accounting Policies and Note 17 Financial Derivatives in the Notes To Consolidated Financial Statements in Item 8 of this Report, which is incorporated here by reference. Not all elements of interest rate, market and credit risk are addressed through the use of financial or other derivatives, and such instruments may be ineffective for their intended purposes due to unanticipated market changes, among other reasons. The following table summarizes the notional or contractual amounts and net fair value of financial derivatives at December 31, 2012 and December 31, 2011. Table 54: Financial Derivatives Summary
<table><tr><td></td><td colspan="2">December 31, 2012</td><td colspan="2">December 31, 2011</td></tr><tr><td>In millions</td><td>Notional/ ContractualAmount</td><td>Net Fair Value (a)</td><td>Notional/ Contractual Amount</td><td>Net Fair Value (a)</td></tr><tr><td> Derivatives designated as hedging instruments under GAAP</td><td></td><td></td><td></td><td></td></tr><tr><td>Total derivatives designated as hedging instruments</td><td>$29,270</td><td>$1,720</td><td>$29,234</td><td>$1,772</td></tr><tr><td> Derivatives not designated as hedging instruments under GAAP</td><td></td><td></td><td></td><td></td></tr><tr><td>Total derivatives used for residential mortgage banking activities</td><td>$166,819</td><td>$588</td><td>$196,991</td><td>$565</td></tr><tr><td>Total derivatives used for commercial mortgage banking activities</td><td>4,606</td><td>-23</td><td>2,720</td><td>-21</td></tr><tr><td>Total derivatives used for customer-related activities</td><td>163,848</td><td>30</td><td>158,095</td><td>-132</td></tr><tr><td>Total derivatives used for other risk management activities</td><td>1,813</td><td>-357</td><td>4,289</td><td>-327</td></tr><tr><td>Total derivatives not designated as hedging instruments</td><td>$337,086</td><td>$238</td><td>$362,095</td><td>$85</td></tr><tr><td>Total Derivatives</td><td>$366,356</td><td>$1,958</td><td>$391,329</td><td>$1,857</td></tr></table>
(a) Represents the net fair value of assets and liabilities.2011 VERSUS 2010 CONSOLIDATED INCOME STATEMENT REVIEW Summary Results Net income for 2011 was $3.1 billion, or $5.64 per diluted common share, compared with $3.4 billion, or $5.74 per diluted common share, for 2010. The decrease from 2010 was primarily due to an $850 million, or 6%, reduction in total revenue, a $492 million, or 6%, increase in noninterest expense and the impact of the $328 million after-tax gain on the sale of GIS recognized in 2010, partially offset by a $1.3 billion, or 54%, decrease in the provision for credit losses in 2011. In addition, 2010 net income attributable to common shareholders was also impacted by a noncash reduction of $250 million in connection with the redemption of TARP preferred stock. Net Interest Income Net interest income was $8.7 billion for 2011 down from $9.2 billion in 2010. The net interest margin decreased to 3.92% in 2011 compared with 4.14% for 2010, primarily due to the impact of lower purchase accounting accretion, a decline in the rate on average loan balances and the low interest rate environment partially offset by lower funding costs. Noninterest Income Noninterest income was $5.6 billion for 2011 and $5.9 billion for 2010. Noninterest income for 2011 reflected higher asset management fees and other income, higher residential mortgage banking revenue, and lower net other-thantemporary impairments (OTTI), that were offset by a decrease in corporate service fees primarily due to a reduction in the value of commercial mortgage servicing rights, lower service charges on deposits from the impact of Regulation E rules pertaining to overdraft fees, a decrease in net gains on sales of securities and lower consumer services fees due, in part, to a decline in interchange fees on individual debit card transactions in the fourth quarter partially offset by higher transaction volumes throughout 2011. Asset management revenue, including BlackRock, increased $34 million to $1.1 billion in 2011 compared to 2010. The increase was driven by strong sales performance by our Asset Management Group and somewhat higher equity earnings from our BlackRock investment. Discretionary assets under management at December 31, 2011 totaled $107 billion compared with $108 billion at December 31, 2010.
<table><tr><td></td><td colspan="5">At or for the year ended December 31</td></tr><tr><td>Dollars in millions, except as noted</td><td>2012 (a) (b)</td><td>2011 (b)</td><td>2010 (b)</td><td>2009 (b)</td><td>2008 (c)</td></tr><tr><td> BALANCESHEETHIGHLIGHTS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Assets</td><td>$305,107</td><td>$271,205</td><td>$264,284</td><td>$269,863</td><td>$291,081</td></tr><tr><td>Loans</td><td>185,856</td><td>159,014</td><td>150,595</td><td>157,543</td><td>175,489</td></tr><tr><td>Allowance for loan and lease losses</td><td>4,036</td><td>4,347</td><td>4,887</td><td>5,072</td><td>3,917</td></tr><tr><td>Interest-earning deposits with banks</td><td>3,984</td><td>1,169</td><td>1,610</td><td>4,488</td><td>14,859</td></tr><tr><td>Investment securities</td><td>61,406</td><td>60,634</td><td>64,262</td><td>56,027</td><td>43,473</td></tr><tr><td>Loans held for sale</td><td>3,693</td><td>2,936</td><td>3,492</td><td>2,539</td><td>4,366</td></tr><tr><td>Goodwill and other intangible assets</td><td>10,869</td><td>10,144</td><td>10,753</td><td>12,909</td><td>11,688</td></tr><tr><td>Equity investments</td><td>10,877</td><td>10,134</td><td>9,220</td><td>10,254</td><td>8,554</td></tr><tr><td>Noninterest-bearing deposits</td><td>69,980</td><td>59,048</td><td>50,019</td><td>44,384</td><td>37,148</td></tr><tr><td>Interest-bearing deposits</td><td>143,162</td><td>128,918</td><td>133,371</td><td>142,538</td><td>155,717</td></tr><tr><td>Total deposits</td><td>213,142</td><td>187,966</td><td>183,390</td><td>186,922</td><td>192,865</td></tr><tr><td>Transaction deposits (d)</td><td>176,705</td><td>147,637</td><td>134,654</td><td>126,244</td><td>110,997</td></tr><tr><td>Borrowed funds (e)</td><td>40,907</td><td>36,704</td><td>39,488</td><td>39,261</td><td>52,240</td></tr><tr><td>Total shareholders’ equity</td><td>39,003</td><td>34,053</td><td>30,242</td><td>29,942</td><td>25,422</td></tr><tr><td>Common shareholders’ equity</td><td>35,413</td><td>32,417</td><td>29,596</td><td>22,011</td><td>17,490</td></tr><tr><td> CLIENTASSETS(billions)</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Discretionary assets under management</td><td>$112</td><td>$107</td><td>$108</td><td>$103</td><td>$103</td></tr><tr><td>Nondiscretionary assets under management</td><td>112</td><td>103</td><td>104</td><td>102</td><td>125</td></tr><tr><td>Total assets under administration</td><td>224</td><td>210</td><td>212</td><td>205</td><td>228</td></tr><tr><td>Brokerage account assets (f)</td><td>38</td><td>34</td><td>34</td><td>32</td><td>29</td></tr><tr><td>Total client assets</td><td>$262</td><td>$244</td><td>$246</td><td>$237</td><td>$257</td></tr><tr><td> SELECTEDRATIOS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Net interest margin (g)</td><td>3.94%</td><td>3.92%</td><td>4.14%</td><td>3.82%</td><td>3.37%</td></tr><tr><td>Noninterest income to total revenue</td><td>38</td><td>39</td><td>39</td><td>44</td><td>39</td></tr><tr><td>Efficiency</td><td>68</td><td>64</td><td>57</td><td>56</td><td>59</td></tr><tr><td>Return on</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Average common shareholders’ equity</td><td>8.31</td><td>9.56</td><td>10.88</td><td>9.78</td><td>6.52</td></tr><tr><td>Average assets</td><td>1.02</td><td>1.16</td><td>1.28</td><td>.87</td><td>.64</td></tr><tr><td>Loans to deposits</td><td>87</td><td>85</td><td>82</td><td>84</td><td>91</td></tr><tr><td>Dividend payout</td><td>29.0</td><td>20.2</td><td>6.8</td><td>21.4</td><td>104.6</td></tr><tr><td>Tier 1 common</td><td>9.6</td><td>10.3</td><td>9.8</td><td>6.0</td><td>4.8</td></tr><tr><td>Tier 1 risk-based</td><td>11.6</td><td>12.6</td><td>12.1</td><td>11.4</td><td>9.7</td></tr><tr><td>Common shareholders’ equity to total assets</td><td>11.6</td><td>12.0</td><td>11.2</td><td>8.2</td><td>6.0</td></tr><tr><td>Average common shareholders’ equity to average assets</td><td>11.5</td><td>11.9</td><td>10.4</td><td>7.2</td><td>9.6</td></tr><tr><td> SELECTEDSTATISTICS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Employees</td><td>56,285</td><td>51,891</td><td>50,769</td><td>55,820</td><td>59,595</td></tr><tr><td>Retail Banking branches</td><td>2,881</td><td>2,511</td><td>2,470</td><td>2,513</td><td>2,581</td></tr><tr><td>ATMs</td><td>7,282</td><td>6,806</td><td>6,673</td><td>6,473</td><td>6,233</td></tr><tr><td>Residential mortgage servicing portfolio (billions)</td><td>$135</td><td>$131</td><td>$139</td><td>$158</td><td>$187</td></tr><tr><td>Commercial mortgage servicing portfolio (billions)</td><td>$282</td><td>$267</td><td>$266</td><td>$287</td><td>$270</td></tr></table>
(a) Includes the impact of RBC Bank (USA), which we acquired on March 2, 2012. (b) Includes the impact of National City, which we acquired on December 31, 2008. (c) Includes the impact of National City except for the following Selected Ratios: Net interest margin, Noninterest income to total revenue, Efficiency, Return on Average common shareholders’ equity, Return on Average assets, Dividend payout and Average common shareholders’ equity to average assets. (d) Represents the sum of interest-bearing money market deposits, interest-bearing demand deposits, and noninterest-bearing deposits. (e) Includes long-term borrowings of $19.3 billion, $20.9 billion, $24.8 billion, $26.3 billion and $33.6 billion for 2012, 2011, 2010, 2009 and 2008, respectively. Borrowings which mature more than one year after December 31, 2012 are considered to be long-term. (f) Amounts for 2012, 2011 and 2010 include cash and money market balances. (g) Calculated as taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under accounting principles generally accepted in the United States of America (GAAP) on the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the years 2012, 2011, 2010, 2009 and 2008 were $144 million, $104 million, $81 million, $65 million and $36 million, respectively. RESIDENTIAL MORTGAGE-BACKED SECURITIES At December 31, 2012, our residential mortgage-backed securities portfolio was comprised of $31.4 billion fair value of US government agency-backed securities and $6.1 billion fair value of non-agency (private issuer) securities. The agency securities are generally collateralized by 1-4 family, conforming, fixed-rate residential mortgages. The non-agency securities are also generally collateralized by 1-4 family residential mortgages. The mortgage loans underlying the non-agency securities are generally non-conforming (i. e. , original balances in excess of the amount qualifying for agency securities) and predominately have interest rates that are fixed for a period of time, after which the rate adjusts to a floating rate based upon a contractual spread that is indexed to a market rate (i. e. , a “hybrid ARM”), or interest rates that are fixed for the term of the loan. Substantially all of the non-agency securities are senior tranches in the securitization structure and at origination had credit protection in the form of credit enhancement, overcollateralization and/or excess spread accounts. During 2012, we recorded OTTI credit losses of $99 million on non-agency residential mortgage-backed securities. All of the losses were associated with securities rated below investment grade. As of December 31, 2012, the noncredit portion of impairment recorded in Accumulated other comprehensive income for non-agency residential mortgagebacked securities for which we have recorded an OTTI credit loss totaled $150 million and the related securities had a fair value of $3.7 billion. The fair value of sub-investment grade investment securities for which we have not recorded an OTTI credit loss as of December 31, 2012 totaled $1.9 billion, with unrealized net gains of $114 million. COMMERCIAL MORTGAGE-BACKED SECURITIES The fair value of the non-agency commercial mortgagebacked securities portfolio was $5.9 billion at December 31, 2012 and consisted of fixed-rate, private-issuer securities collateralized by non-residential properties, primarily retail properties, office buildings, and multi-family housing. The agency commercial mortgage-backed securities portfolio was $2.0 billion fair value at December 31, 2012 consisting of multi-family housing. Substantially all of the securities are the most senior tranches in the subordination structure. There were no OTTI credit losses on commercial mortgagebacked securities during 2012. ASSET-BACKED SECURITIES The fair value of the asset-backed securities portfolio was $6.5 billion at December 31, 2012 and consisted of fixed-rate and floating-rate, private-issuer securities collateralized primarily by various consumer credit products, including residential mortgage loans, credit cards, automobile loans, and student loans. Substantially all of the securities are senior tranches in the securitization structure and have credit protection in the form of credit enhancement, over-collateralization and/or excess spread accounts. We recorded OTTI credit losses of $11 million on assetbacked securities during 2012. All of the securities are collateralized by first lien and second lien residential mortgage loans and are rated below investment grade. As of December 31, 2012, the noncredit portion of impairment recorded in Accumulated other comprehensive income for asset-backed securities for which we have recorded an OTTI credit loss totaled $52 million and the related securities had a fair value of $603 million. For the sub-investment grade investment securities (available for sale and held to maturity) for which we have not recorded an OTTI loss through December 31, 2012, the fair value was $47 million, with unrealized net losses of $3 million. The results of our security-level assessments indicate that we will recover the cost basis of these securities. Note 8 Investment Securities in the Notes To Consolidated Financial Statements in Item 8 of this Report provides additional information on OTTI losses and further detail regarding our process for assessing OTTI. If current housing and economic conditions were to worsen, and if market volatility and illiquidity were to worsen, or if market interest rates were to increase appreciably, the valuation of our investment securities portfolio could be adversely affected and we could incur additional OTTI credit losses that would impact our Consolidated Income Statement. LOANS HELD FOR SALE Table 15: Loans Held For Sale
<table><tr><td>In millions</td><td>December 312012</td><td>December 312011</td></tr><tr><td>Commercial mortgages at fair value</td><td>$772</td><td>$843</td></tr><tr><td>Commercial mortgages at lower of cost or market</td><td>620</td><td>451</td></tr><tr><td>Total commercial mortgages</td><td>1,392</td><td>1,294</td></tr><tr><td>Residential mortgages at fair value</td><td>2,096</td><td>1,415</td></tr><tr><td>Residential mortgages at lower of cost or market</td><td>124</td><td>107</td></tr><tr><td>Total residential mortgages</td><td>2,220</td><td>1,522</td></tr><tr><td>Other</td><td>81</td><td>120</td></tr><tr><td>Total</td><td>$3,693</td><td>$2,936</td></tr></table>
We stopped originating commercial mortgage loans held for sale designated at fair value in 2008 and continue pursuing opportunities to reduce these positions at appropriate prices. At December 31, 2012, the balance relating to these loans was $772 million, compared to $843 million at December 31, 2011. We sold $32 million in unpaid principal balances of these commercial mortgage loans held for sale carried at fair value in 2012 and sold $25 million in 2011. |
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